Late November and early December often isn’t a notable time in cattle markets, but there are some indications a strong counter-seasonal year-end is in store for the cattle markets.
In a letter to Extension agents published by the Livestock Marketing Information Center, Colorado State University Agricultural Economist Stephen Koontz said some events of the last week or two are worth emphasizing.
FEEDER CATTLE MARKETS STRONG
Feeder cattle and calf movements were light Thanksgiving week, Koontz said. But prices were strong, and buyer interest was moderate to good.
The summary for Colorado revealed trade of 2,200 head down from the 2,600 for the same week last year, he said. Prices for medium and large No. 1 calves weighing less than 400 pounds were greater than $200 per cwt while animals ranging from 500 to 700 pounds were $165 to $190 per cwt. The heaviest animals were about $165.
Trading in western Nebraska and Wyoming was similar with volumes even to down about 10% while buyer interest and prices were strong, especially for lighter animals, Koontz said.
HAY, FORAGE MARKETS ALSO FIRM
Hay and forage markets were similar, he said. Modest volumes with strong interest.
Much of the hay trade in Colorado, Nebraska and Wyoming that is not horse hay is headed out of state and mainly south, Koontz said. Weather from mid-November resulted in the need to increase hay feeding in the northern and southern plains.
Fair quality hay in Colorado was firmly $300 per short ton, he said. And there were some reports of trade in corn stalks, mainly in Nebraska, that was $100 a ton, or more.
Cheaper cow-hay was sought and not found, Koontz said. The price received for all hay in the entire US as reported by the USDA’s National Agricultural Statistics Service weakened some in September from August ($242 versus $246) but not much.
FED CATTLE MARCHING HIGHER
And the cash fed cattle market continues its march higher, Koontz added. Much of 2022 was spent ranging from $135 to $142 per cwt, and since August cash prices have pushed to $150 and higher. Futures for all of 2023 are well above $150 per cwt and approaches $160 at the seasonal peaks.
The market is pushing past the supply and demand situation that has been the issue since 2017, he said. Fed cattle numbers have exceeded packing capacity for the past six years. Substantial Saturday operations have been a necessity. And the situation was made worse by COVID.
But this looks to change in 2023 and 2024, Koontz said, complicated by the extent and persistence of drought, and prospects for a slower world economy.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $156.91 to $157.72 per cwt, compared with last week’s range of $149.09 to $159.50. FOB dressed steers, and heifers went for $245.53 to $246.37 per cwt, versus $237.81 to $250.98.
The USDA choice cutout Monday day was down $6.62 per cwt at $243.31 while select was down $3.45 at $221.11. The choice/select spread narrowed to $22.20 from $25.37 with 102 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were at $1.90 to $2.10 a bushel over the Mar futures and for southwest Kansas were unchanged at $1.00 over Mar, which settled at $6.40 1/2, down $0.06 1/4.
No cattle contracts were tendered for delivery Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $178.14 per cwt down $0.89. This compares with Monday’s Jan contract settlement of $183.77, up $1.32.