Compared to last week, the bulk of available feeder offerings were spring-born calves weighing from 500-700 lbs which sold steady to 4.00 higher. The calf demand was by far the best for lighter-weights where trading activity exploded and prices ranged 6.00-12.00 higher with many instances as much as 20.00 higher than already record levels. True yearling feeder cattle were lightly tested but sold with a much higher undertone. Many cattlemen are guilty of not staying fully abreast of markets until they are ready to buy or sell, however in this day and time the town drunk is fully aware that cattle are getting pretty high.
The current price levels are extremely satisfying to cow/calf producers that have persevered through historically challenging droughts and wintry weather over the last few years, not to mention the temptation to plow-up their grass or totally devote their land to recreation. Many of these calf producers and yearling backgrounders have experienced a more profitable year than they could have ever imagined, but not even last week’s all-time record fed cattle trade was enough to pull some feedlot closeouts out of the red ink.
Cattle feeding has mostly become a game of small margins oneconomies of scale mired in risk management that many times offers more opportunities than the cash position itself. Most feedlots refuse to operate with empty pens and their desire to maintain inventories causes an accumulation of feeder cattle that have unrealistic breakevens. Thursday at the Pratt, KS Livestock Auction an outstanding offering of nearly extinct grass yearlings was on hand. The famed Gardiner Ranch sold a string of top quality black-hided “green” yearlings full of carcass-driven genetics and complete with an attractive weighing condition. One light load of steers weighed 704 lbs at 157.10; with accompanying straight loads of 804 lbs at 155.10 and 870 lbs at 149.25. These will be some of the last grass yearling sales of the fall as offerings have been liquidated at prices hundreds of dollars per head higher than their owners could have hoped for.
Now, as these backgrounders look for future opportunities to profit, they have become extremely aggressive for lightweight calves to dry winter and get the early jump on next spring’s grass. Steers are preferred, which has stretched the steer/heifer spread wider than Choice/Select or even Diesel/Gasoline. Now, the majority of male calves under 500 lbs sell at prices greater than 150.00. Feedlots were unable to maintain last week’s record breaking fed cattle market (a live steer weighted average price of 125.49 for the five major feeding areas) and sold 2.00-4.00 lower from 122.00-123.50. Friday’s cattle-on-feed report was well forecasted with only October marketings wavering from analysts’ expectations by falling slightly on the cattle market’s friendly side. November 1st inventories were 4 percent larger than a year ago (18th straight larger year over year figure) while October placements were 99 percent of last year and marketings were 3 percent larger than 2010. This week’s auction volume had 32 percent over 600 lbs and 40 percent heifers.