Light Feeder Cattle Prices Moving Higher

Prices for lighter-weight feeder cattle continue to move higher while those of heavier calves move sideways, as buyers seek younger cattle to put on pasture.

Spring-like temperatures have pastures showing a bit of green, and the opportunity to have calves growing on the new grass is hard for stockers to pass up.

For the uninitiated, stockers are those producers who stock calves into pastures for growth with an eye toward selling them for a profit on the cheap gains later.  This works best for younger, smaller calves as there are more marketing options to sell them later as the pasture gives out.  Plus, they grow fast.




Although weekly average prices for 400- to 500-pound medium and large, No. 1 steer calves in the Southern Plains continue to rise, they remain below last year and the 2011-2015 average.  However, they are closing the gap, according to USDA/Agricultural Marketing Service data.

AMS data show average steer prices last week at $178.91 per cwt, $34.57, or 16.91%, below last year’s $213.48.  Compared with the five-year average, last week’s average price was down $40.68, or 18.5%, from $219.59.

However, those differences were narrower than in the first week of the year when this year’s price of $164.56 was $58.96, or 26.4%, below last year’s $223.52.  It also was $49.92, or 23.3%, below the 2011-2015 average of $214.48.




In contrast to the strength seen in Southern Plains lighter-weight calf prices, weekly averages for medium and large, No. 1 feeder steers are following the trend sideways to lower but at a lower level.

But the market is rapidly approaching a time when prices will almost certainly make a move up or down.

USDA/AMS data show the average price last week at $131.78 per cwt, $27.94, or 17.5%, below last year’s $159.72.  This is close to the difference between last week and the 2011-2015 average of $161.87.

Last year, prices for feeder cattle declined beginning in late March as more of these cattle became available to the market.  This supply growth continues and seems to point toward continued price weakness.

That is, unless demand for fat cattle improves and erases at least some of the discounts seen in successive live cattle futures delivery months through Oct.




Market sources say there is growing concern in the markets for export beef demand under President Donald Trump.  His withdrawal from the Trans Pacific Partnership trade negotiations and his insistence that the North American Free Trade Agreement be renegotiated, sparked by his America-first agenda, call into question the demand for US beef from these markets in coming months or even years.

Some of these markets, like Mexico, Canada, Japan and China, are strong, growing markets for US beef.  He says individual trade agreements will follow, but they take time.