The dwindling supply of true yearling feeder cattle continues to support a fall price rally that added another $2 per hundredweight last week. Cattle feeders, however, struggle to find a scenario where those cattle are likely to turn a modest profit a few months down the road.

Cash fed cattle markets traded mostly steady last week. Cattle sold out of southern feedyards at $127 per hundredweight, while cattle out of the northern feedyards sold at $127 to $128. Dressed sales were quoted at $196 to $198. Trade volumes were called light to moderate. Supplies of market-ready cattle remain tight, and early ideas for this week’s trade puts the market steady again.

Boxed beef prices saw the week’s largest volatility, with the market moving sharply higher early in the week before a $2-plus decline on Friday left the week’s value nearly steady. Choice boxed beef traded Friday at $196.82, which represented a drop of $2.55 from the day before, but a 14 cent gain from the previous Friday. Select boxed beef declined $2.85 on Friday to $179.70, but the week-to-week comparison showed a decline of just 75 cents per hundredweight. The Choice-Select spread finished the week at $17.12 per hundredweight, an increase of 89 cents from the previous week. 

With yearling feeder cattle in short supply, cattle feeders are looking at lighter, weaned calves. Prices for calves at auction last week were called uneven, with a range from $3 lower to $3 higher, and demand inconsistent.

“Most cattle feeders are being forced to settle for longtime-weaned calves over 650 pounds, and the market for those calves has closed-in on yearling prices in recent weeks,” said USDA Market News reporter Corbitt Wall. “However, unweaned calves over 550 pounds continue to incur severe discounts and buyers do not seem much closer to embracing these types any time soon.”

That’s because of the potential health problems those younger cattle can experience, especially when fall temperatures fluctuate dramatically. Wall says a “50-degree temperature swing in less than 12 hours” on a recently purchased calf suffering from “separation anxiety” can quickly destroy the profit potential of a pen of cattle.

“Tight numbers of feeders will continue to support cash feeder cattle prices,” Wall said, “while high feed costs and the fed market’s inability to push beyond record levels near 130.00 will continue to keep those feeder cattle markets at bay.”

Last week’s auction receipts totaled 302,700, compared to 285,500 the previous week and 326,700 last year. Direct sales of stocker and feeder cattle totaled 49,800 with video/Internet sales at 28,600. The weekly total was 381,100, compared to 361,700 last year.

Slaughter cows and bulls sold unevenly steady for the week. USDA's Cutter cow carcass cut-out value Friday morning was $160.31, up $0.25 from the previous Friday. Omaha cash corn was 17 cents per bushel lower for the week at $7.65 per bushel.