Compared to last week, feeder cattle prices were firm to 5.00 higher (mostly 2.00-5.00 higher) with the full advance on the 650-850 lb short-yearling types. Much of this week’s offering will soon be celebrating their first birthday and possess a long-weaned condition that will allow them to perform like true yearlings, which have been scarce for the last few months. The unbelievably mild winter throughout the central portion of the country has been ideal for cattle growing with efficient weight gains posted at every level of production.
Stocker and feeder prices continue to reach new milestones each week as buyers of these cattle reach deeper into their pockets. The purchasing of grass stockers is in full bloom even though the first signs of green grass are at least 60-90 days out. Fact is, most stocker buyers admit that they would be even more aggressive for turnout cattle if they were assured that the balance of the winter would continue mild. The market has already surpassed most lofty predictions and the trajectory of the gains has cattlemen hoping that we are currently climbing a plateau rather than a mountain peak. But, there still seems to be enough fundamental support to reasonably hold price levels once the feeder cattle market reaches its full potential.
The semi-annual cattle inventory report on Friday showed that the total number of cattle in the US is down a full 2 percent from a year ago (lowest since 1952) and headcounts of beef cows are down 3 percent. For once, these data add up as the number of beef cows harvested in 2011 was 8.2 percent more than the previous 3 year average, 13.7 percent more than the previous 5 year average, and 21.7 percent more than the previous 10 year average. The Southern Plains drought definitely had an impact with Texas beef cow inventories down over 13 percent and Oklahoma down over 14 percent from a year earlier.
Demand outweighs supply and now that our exports have fully regained pre-BSE levels, cow/calf producers are finally sitting in the driver’s seat. Naturally, the demand for replacement quality heifers is spiking with over 400 head selling through the regular feeder cattle auction in Bassett, NE with an average weight of 692 lbs and an average price of 183.59 or over 1270.00 per head. Many of these fancy open girls are going out of state and a fair amount are leaving the country with destinations as far away as Russia (which will not benefit our domestic inventories).
This week’s high steer quotes were also found in upstate Nebraska with two loads of drug-free source and age verified 650 lb steers at 187.75, and another load weighing 730 lbs at 176.50. By late Friday, the direct fed cattle trade had yet to materialize with packers tired of working with negative margins and feedlots determined to hold steady money. This week’s reported auction volume included 52 percent over 600 lbs and 41 percent heifers.