Feeder Cattle Review: All-time record high prices defy gravity

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Compared to last week, feeder and stocker cattle sold 2.00-5.00 higher with instances from 8.00-10.00 higher throughout the United States.  Some of the sharpest advances were noted on heavy feeders weighing over 800 lbs in response to sharp gains seen this week on the CME cattle futures, following last Friday’s bullish cattle-on-feed report.

Every weight and class of feeders is fully entrenched into all-time record highs as price levels defy gravity and mock anyone expecting a correction when turn-out dates came and went and the weather cleared-up.  Early-week auction markets did not realize the full increase of the market and direct trade areas saw sellers raise their asking prices which slowed late trade volume.  The stars continue to line-up for the feeder market including; tight supplies, good demand (including the continued expansion of foreign customers), and affordable inputs. 

The clouds also appear to be lining-up for the feeder market as spring rains have mostly fallen on crop ground and most major grazing areas remain dry, especially west of the Rockies where most pastures won’t support grazing.  Enough moisture has been seen through the bulk of the Plains to get grass started, but wind has prevailed and hot temperatures are already on the way.  Every level of cattle producer is currently finding big dividends which are also helping to keep demand inflated for calf and yearling markets.

Empty pens continue to be backfilled by commercial feedlots who need a steady supply, but also by farmer-feeders who need to feed-up last year’s on-farm storage.  In many cases, backgrounders are able to reach full-term profits with only a few weeks of ownership and modest weight gains.  This keeps them going back to the well after the sale of each group of cattle put together. Mitchell, SD saw a load of fancy backgrounded yearling steers weighing 948 lbs sell for 172.50. 

Steer calves weighing under 600 lbs rarely yield less than 2.00/lb unless they have a hole in them somewhere.  Still, these most recent record price levels sound strange to the ear and many of the industry members shake their head in disbelief and can’t help but think it’s an aberration.  On the other hand, buyers that are trying to assemble numbers and/or fill orders have a full understanding of current conditions.  Fed cattle trade broke loose Friday afternoon with Southern Plains feedyards selling steady to 1.00 higher at 146.00. This week’s reported auction volume included 49 percent over 600 lbs and 41 percent heifers.            



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