Prices typically peak during late August and early September for yearlings coming off northern grazing programs. That pattern seems to be holding true this year as prices have improved from spring lows, but the peak likely will be around $10 lower than one year ago, says North Dakota State University Extension livestock economist Tim Petry.
He notes that many summer-grazed yearlings are sold by the end of September when grazing conditions deteriorate and cattle reach weights for placement on feed. Grazing conditions have generally been good, and probably the best in several years for some areas of the Northern Plains. So there is no rush to remove cattle from rangeland and few forced sales of feeder cattle due to dry conditions have occurred.
The seasonal price pattern for feeder cattle is usually favorable for marketing these summer grazed steers and heifers, Petry says. The Chicago Mercantile Exchange Feeder Cattle Index Price (CME Index) is a good barometer for 750-800 pound steer prices. The CME Index increases after February/March lows and typically peaks in the late August, early September time period.
Since March, the Index prices have increased about the same as last year on a percentage basis. But prices are about $10/cwt. lower than last year at this time. The CME Index has been in a tight range between $101 and $102 for the last three weeks, and current fundamentals suggest that further seasonal strength will be limited.
Declining corn prices from mid-June to mid-July were supportive to feeder cattle prices, but corn futures prices have increased sharply in the last two weeks. And fed cattle prices continue to struggle with stagnant domestic demand and a disappointing beef export market.
Lower corn prices and a higher fed cattle market would be key to higher feeder cattle prices.