Cattle prices continue higher

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Shrinking supplies of feeder cattle and finished cattle, coupled with lower grain prices and the psychological impact of cattle death losses due to the October blizzard likely will be supportive to prices over the coming months.

Purdue University Extension economist Chris Hurt, PhD, says finished-cattle prices fell to summer lows below $120 per hundredweight in early August. Prices recovered somewhat into the low $120s in August and September, and recently moved toward $130.

Hurt adds that per-capita beef supplies will likely be down about 5 percent for the rest of this year and well into 2014.

As for the losses in South Dakota and neighboring states, Hurt says national media attention could help drive market sentiment based on perceptions of further shortages. He says though that in terms of actual numbers, the reduction likely is not large enough to significantly affect national supplies or beef production. Even if 100,000 cattle died in the storm, which is the upper end of estimates so far, that would account for one-tenth of 1 percent of the nation’s 89 million head of cattle. “If half of the animals were beef cows, that still represents less than two-tenths of 1 percent of the nation’s beef cow herd. Losses of this magnitude are huge for individuals but not highly significant for beef supplies on a national basis,” he says. Hurt expects the blizzard losses to increase finished cattle prices by only 20 to 35 cents per hundredweight over the coming year.

Fed-cattle prices, Hurt says, likely will move into the low $130s in November and average about $130 for the October to December quarter. First-quarter 2014 averages are expected to be about $133 and the second quarter near $132. “On an annual basis, cattle prices should set new record highs this year near $126 and break that record once again in 2014 with an average near $130 for the entire year,” Hurt says.

Prices for finished cattle showed some strength last week as market data slowly becomes available in the wake of the government shutdown. The Texas Cattle Feeders Association last week reported finished steer and heifer prices at $129 per hundredweight, up a dollar from the previous week. That average is up $1.56 per hundredweight from a year ago and nearly $24 higher than the five-year average for the date.

As for feeder cattle, last week’s National Feeder and Stocker Cattle Summary from USDA notes a shortage of data, but indicates the week’s available regional weighted average feeder cattle prices were 2.00-5.00 higher than the last available from the last full week of September.  The full advance was noted in the Southern Plains on true yearling feeders and on 5 weight calves for wheat pasture.

The report also notes that 500- to 600-pound replacement-quality heifer calves in Kearney, Neb. on Wednesday brought $201.00 to $208.25 per hundredweight. In a Valentine, Neb. sale on Thursday, a 243 head string of fancy 492-pound steer calves sold for $220.25, while a 100-head load weighing 553 pounds sold at $198.75. 

Wholesale beef prices also have moved higher, adding support to cattle markets. On Monday, USDA reported the Choice beef cutout averaged $198.29 per hundredweight, up $2.00 from Friday’s average. The Select cutout moved $1.67 higher to $181.65. The Choice-Select spread on Monday was $16.64. A week earlier, on Oct. 14, the Choice cutout stood at $193.28 and Select at $179.73, for a Choice-Select spread of $13.55



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