Compared to last week, calves pretty much dominating receipts this week as prices for calves in the Northern Plains sold mostly 5.00-10.00 lower. Calves in the Southern Plains and the Southeast traded unevenly steady to 5.00 higher as calf values increased for winter wheat grazing demand. True yearling supplies have become tight and values have remained constant as yearling prices this week traded steady to firm with instances 5.00 higher.
Price levels remain very attractive for yearlings coming off grass with good weighing conditions and strings of long timed weaned fancy calves. The other side of the coin is extreme prejudice against unweaned fleshy bawlers (high risk) in many cases selling in small consignments of mixed quality and color. Many of these calves sell far behind the former and for good reason, it may seem unfair that there’s such a disparaging difference in demand for calves that don’t appear that much different. But to the trained eye of an order buyer or a seasoned rancher/farmer feeder there can be quite a difference in quality of these calves.
With prices at record levels for calves and anxiety separation setting in from missing its mother can cause health issues adding to the discounts. With sick pens getting full in many areas of the Southern and Northern Plains which is typical for October and the feeder cattle markets to feel the pressure and challenges these calves bring. However, producers can add value to their calves by pre-conditioning with a full vaccination program and weaning them for at least 45 days.
One of the widest price gaps in the feeder market is on a long-timed weaned/thin 650 lb old crop yearling and an unweaned/fleshy 650 lb bawling calf which can easily be 25.00-30.00 cwt. Corn prices caught some enthusiasm this week with harvest at a slower pace with 46 percent completed compared to the 5-year average of 65 percent complete.
Farmers are harvesting soybeans ahead of corn mostly due to the price relationship. But, if grain traders return to trading strictly corn fundamentals corn could see a downturn with sufficient amount of corn on hand. Once farmer/feeders get through corn harvest they should return with an aggressive attitude to buy calves with the amount of hay and cheaper corn in their bins.
The big question this week is whether there is additional upside to the fed cattle market after last week’s record high of 170.00. Depending on inventory from now till Thanksgiving and the “pairing off” between packers for the inventory to cover their needs can they still push prices higher?
On Friday early live sales in Kansas traded 2.00 lower at 168.00. Packers have been chasing inventory needs and may have paid all their willing to pay to regain their margins. A pull back after last week’s record high seems to be in place. With the big question, how much can cash break and is there another cash rally left for 2014?
The American consumer has a great variety of competing meats to choose from and is quick to notice when budgets are tight, but with the price of gas at its lowest average cost in near four years should help consumers budget for competing meats. Good markets all need constant buying and favorable news. This week’s auction volume included 37 percent over 600 lbs and 37 percent heifers.