Feeder Cattle Review: Winter freeze can’t stop calf prices

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Compared to last week, calf prices were higher across the nation although inclement weather hampered marketing in many areas of the United States.  Frigid temperatures have persisted throughout much of the country with winter still officially a week away. 

Demand was best for lightweight calves (under 550 lbs) where prices were $2-$5 higher, while heavier calves traded mostly steady to $3 higher with most gains only seen on weights from 550-650 lbs.  There are no longer enough true yearlings offered for a good market test. 

A major ice storm across the lower Midwest severely curbed feeder cattle sales through the heavy marketing area along Interstate-44.  From El Reno, OK northeastward through Oklahoma City, Tulsa, and into Missouri at Joplin and Springfield, these five major feeder cattle auctions posted only 3700 head of receipts compared to over 24,400 head the same week a year ago. 

Farther south into Arkansas, most auctions were closed due to hazardous road conditions and some power outages.  Wintry weather also affected marketing up in Montana where blowing snow and wind chills well below zero prompted most producers to wait for a better day.  However, sales were brisk in the central portion of the US and across much of the Northern Plains. 

Farmer feeders and backgrounders only have a small window to invest in cattle before the end of the year, while diversified sellers are deferring payment until 2014 at many trustworthy salebarns.  Many buyers have moved down to 4 weight calves as the cost per pound of gain on these lightweights is only a fraction of their cost per pound. 

Cattle growers need as long as they can get to cheapen feeder cattle into a profit by utilizing plentiful hay stockpiles and commodity feeds that are much more reasonably priced than in recent years.  From Kansas up to North Dakota, top quality 450 lb steer calves are routinely hitting $225-$230 cwt with a flat 600 lb hard-weaned steer pushing $2/lb.  That’s $1200 first cost for something that still requires freight, feed, medicine, and time – then likely the animal will only be worth less than $1600 at twice its weight. 

The well-known secret is to make the steer weigh over 1500 lbs in which it could bring over $2000 and help recover some of that exorbitant expense.  It’s the same thing they’ve always done, it just takes as much money for one as it used to for three.  This week’s reported auction volume included 48 percent over 600 lbs and 39 percent heifers.  



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