Compared to last week, calves and yearlings sold firm to 5.00 higher with instances as much as 10.00 higher on both pee-wee calves weighing under 450 lbs and on feeder steers weighing 600-850 lbs. This runaway feeder market has yet to show any signs of stopping or even slowing down as there doesn’t seem to be a counter-weight on the other side. Northern Plain’s buyers aided higher feeders this week as offerings have become very light locally and their orders are being sent south. However, the Herried, SD Livestock Market had nearly 8000 head last Friday featuring a load of 836 lb top quality drug-free steers that brought 199.25 and another load weighing 873 lbs at 195.75. Luckily, the high volume markets in the lower Midwest had respectable numbers for a plethora of buyers to choose from.
In Oklahoma; Woodward offered over 10,000 head, the Oklahoma National Stockyards sold 11,700 head, and OKC-West at El Reno had over 9000 head. On up Interstate 44, the Joplin Regional Stockyards ended up with 6500 head which was 2000 more than they were expecting plus another 2000 head for their weekly video. These sizeable runs may cause people to think that there are plenty of cattle out there, but actually this is merely a precursor for how small the trickle of offerings will become late this summer and early fall.
Unprecedented percentages of lightweight calves (under 450 lbs) have been moving through our nations cattle auctions so far this year and the bulk of them were perceived to be too high-priced for local backgrounders, so the lion’s share of the these calves have moved in vertically integrated systems. These cattle will not be for sale as feeder cattle and will instead move directly into corporate feedlots which will add to the demand for available yearlings down the road.
Backgrounders with green yearlings to sell off the major grazing regions near the 5 area feeding district have dollar signs in their eyes with the number 2 next to them. Feedlots aren’t quite ready for the 2.00 mark on an 800 lb late summer or fall delivery steer, in fact they’re not even ready for the mid-190’s that the Board is quoting, but several strings of 800 lb steers are starting to be written up around 190.00 which is a handsome profit for grazers who bought their cattle early.
The one problem with these high feeder cattle prices is that the fed market is not keeping pace and cattle feeders are risking another dip in the red ink as they are in fierce competition for yearlings. Southern Plains feedlots sold cattle another 1.00 lower this week at 144.00. Indeed a pound of steer holds a handsome premium to the current cost of gain, but the purchase prices can only be backed-up so far. This week’s reported auction volume included 54 percent over 600 lbs and 42 percent heifers.