Stocker and feeder cattle weaken as drought persists

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Demand for stocker cattle continues to weaken across the Central Plains as the ongoing drought forces cattlemen to reduce inventories and readjust business strategies.

Heavy calves at last week’s auctions were called unevenly steady to weak, with trends ranging from $2 per hundredweight higher to $3 lower. Stocker calves under 600 pounds traded steady to $3 lower. USDA Market News reports that not enough “true yearlings” were available for an adequate market test last week.

“Persistently dry conditions over the last two years have caused unprecedented liquidation of breeding stock, movement of stocker cattle into confined feeding operations, and early marketing of home-raised calves in an effort to preserve cow herds,” says USDA Market News Reporter Corbitt Wall. “Virtually no green or strictly grass feeders are available and the majority of the new-crop calves on offer are right off the cow.”

The drought affects cattle operations beyond the obvious lack of forage. Purchased calves and stocker cattle are walking off the truck in poorer condition that normal, which increases the risk of disease outbreak and the cattle’s ability to respond to treatment.

“Traditional winter backgrounders have been slow to enter the market, despite the smallest calf crop in 60 years,” Wall says. “Most believe there is still plenty of demand out there but prospective buyers are conserving their feed, water, and medicine until later in the season.”

Last week’s auction receipts totaled 291,500, compared to 265,200 the previous week and 325,200 last year. Direct sales of stocker and feeder cattle totaled 35,500 with video/Internet sales at 33,200. The weekly total was 360,200, compared to 416,800 last year.

Cash fed cattle markets traded $1 lower last week with cattle in the South at $125 to $126 per hundredweight. Cattle sold on a dressed basis $2 lower at $195. Supplies of market-ready cattle are likely to show an increase over the next few weeks, and holiday turkey demand is likely to prevent increased beef sales.

Boxed beef prices declined for the week. Choice boxed beef traded Friday at $191.37, a decline of $1.37 per hundredweight from the previous Friday. Select boxed beef declined $1.98 for the week to $173.56. The Choice-Select spread finished the week at $18.31 per hundredweight, an increase of $1.11from the previous week.

Slaughter cows and bulls sold unevenly steady. USDA's Cutter cow carcass cut-out value Friday morning was $159.96, up 19 cents from the previous Friday. Omaha cash corn was 12 cents per bushel lower for the week at $7.62 per bushel.

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Tony N    
powell butte oregon  |  November, 12, 2012 at 09:04 AM

We sure as heck should not be making ethanol out of 40 % of our Corn NOW don’t ya think ? “ In the midst of a crop-killing drought, we are diverting about 40 percent of our shrinking corn crop to produce high-cost ethanol fuels”.

Nebraska  |  November, 12, 2012 at 09:16 AM

Ignorance is rampant on this issue of ethanol in the long view. Short sighted reactionary comments like this serve no one. The market will balance itself out. Small moves in any Government action toward our feed supply will maintain a system that has served and will serve farmer and feeder well. Look at other factors that have sent Corn prices into the 8 dollar range. Devaluation of the dollar? Strong exports? Soybean price strength? Ethanol adds value to corn in a way that helps rural communities. Exports do not.

Missouri  |  November, 12, 2012 at 09:21 AM

Well if ethanol is being made at $ 1.20 per gallon less than gasoline with no government subsidy, doesn't that look like a pretty good use for corn ? It truly is renewable, since you can make ethanol year after year from corn.

Missouri  |  November, 12, 2012 at 07:29 PM

If you are raising corn for a income, you must love ethanol. But if you are me, who has raised beef cattle and depend on corn as a part of winter feed, it's not a good thing. The price of corn is too much for me buy for feed. I am like the thousands of cattle producers who are forced to reduce our herds and take the losses. The drougt has such a negative effect on cattle farming in Missouri that it has changed our landscape for ever. After 40 years, I am throwing in the towel. Also, the Farm Bill that still has not passed so that funds are on hold has been the icing on the cake.

Missouri  |  November, 12, 2012 at 07:36 PM

I think you imply that a comment is made from ignorance which is insulting and condenscending on your part. I think the comment has value and he makes a good point to be considered.

November, 14, 2012 at 06:58 PM

Mary & Tony, Ethanol aside, the cash price for soybean oil is about $0.50/lb which is about $3.80/gal. Low sulfur diesel here is $4.30/gal with about 30 cents of federal and state tax making it $4.00/gal. Should a soybean farmer be required to sell his oil for food but not fuel and get less money? Last spring before the drought I calculated that my corn was worth $3/bu as beef but $6/bu as ethanol without subsidy or the work & risk of feeding the cattle. The question is, "Should food be worth less than motor fuel?"

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