Feedyards and packers continue to struggle with heavy losses. Prices for calves and yearlings remain strong, though the lingering two-year drought is weighing heavily on the markets. Grazing operators are reluctant to begin buying cattle for the coming season with zero winter moisture in their pastures.
Grain and feed prices drifted slightly lower during January but provided only small benefit to cattle markets. The steer-corn ratio improved nearly three-quarters of a point during January. Pork and poultry remain competitive as their production held steady while retail prices dropped during January. Supplies of all cattle are declining, and seasonally, cattle prices should improve in the coming weeks, but this year everything hinges on rain.