Q4 Fed, Feeder Cattle Price Performance

Fourth-quarter slaughter steer prices posted the biggest increase of any year in the last eleven, say USDA data.

Based on the five-market choice steer price monthly average (reported by the USDA’s Agricultural Marketing Service and reported by the Livestock Marketing Information Center’s “Livestock Monitor”), October prices were up $5.35 per cwt from September.  In 2013, the September-to-October increase was $5.13, and in 2014 the rise was $4.44.

Over the last 10 years, the average September-to-October price change was a decline of $0.16, in no small part because of drops in 2015 and 2016 of $4.45 and $5.03, respectively.

Comparisons of fed cattle price increases in 2017 from September to November were even more dramatic.  The average change for this span during the prior 11 years was up $1.42 per cwt.  This time, the price increase was $14.26.

The next biggest September-November price change since 2005 was in 2014, which posted a gain of $9.82.  In 2015, fed steer prices recorded the biggest September-November price drop in the last 11 years of $8.21.  In 2016, November cattle markets started a rebound that continued into 2017.

During the fourth quarter of 2017, the lowest fed steer price (five-market average) occurred in the first week (week ending Oct. 7) at $109.45 per cwt.  The quarterly high was for the week ended Nov. 4 at $123.53.  For the quarter, fed steers were projected to have averaged a little more than $117.50 per cwt, more than 9% more than 2016.




In light of the fed cattle price performance, fourth-quarter feeder cattle prices also increased but kept within the bounds of recent-year gains.  The Oklahoma City auction price for 750- to 800-pound feeder steers moved up in October and November.

September-October price increases in 2017 were $3.61 per cwt followed by a $3.09 gain in November.  Prices then declined in December.

On a weekly basis, fourth-quarter feeder steers peaked at $166.28 per cwt the week ending Nov. 10 and then generally eroded, averaging $149.87 for the last auction of the calendar year.

In 2017’s final quarter, 750- to 800-pound steers at Oklahoma City averaged $155.10 per cwt, a year-over-year surge of $26.48 per cwt, or 21%.

The year-over-year gains in fourth-quarter-2017 yearling prices was directionally consistent with the demand for yearling steers caused by rising fed cattle prices.  Additionally, the increase was supported by supplies of feeder cattle.

The supply driver for the fall yearling market is the calves that were born in the prior year.  In 2016, the US calf crop expanded 3%, according to the USDA’s National Agricultural Statistics Service.  Calves born in Oklahoma during 2016 surpassed the 2015 tally by 8%.

Oklahoma City auction receipts for 750- to 800-pound feeder steers in October were up 7% from the previous October.  November market receipts fell short of the prior November by 7%.




Cash cattle traded Tuesday at $118 to mostly $120 per cwt on a live basis, about steady with the bulk of last week’s action, and at $192 to $193 on a dressed basis, steady to up $1.

Only 108 cattle traded Wednesday on the Livestock Exchange video auction at $119.75 per cwt, up $0.75 from the previous week.

The USDA’s choice cutout Wednesday was down $0.28 per cwt at $205.30, while select was off $0.28 at $199.61.  The choice/select spread held steady at $5.69 with 100 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $145.01 per cwt, down $0.31.  This compares with Wednesday’s Jan settlement of $147.87, up $2.27.