Despite relatively strong feeder cattle and calf prices, prices for replacement females declined during January. That decline, $25 to $30 per head for bred heifers and young-to-middle-aged cows, was due largely to winter’s strong grip on the Plains and upper Midwest regions of cattle country, and to the continued strength in the grains markets.
Hay and feed costs remain at near record-high levels, which would soften demand for replacement females in any year. But rising feedyard costs of gain, driven by ever higher corn prices, have created pressure on feeder cattle markets in recent months, and that weakness has carried over to the female markets. Drought also remains a concern for producers in many areas, especially those in the southeastern United States. Northern Alabama, for instance, finished 2007 at more than a foot below normal rainfall.
Weakness in the replacement female markets, however, has not carried over into the cull cow markets. Both categories of slaughter cows were higher during January, a seasonal trend that typically runs through late winter. Utility and commercial cows gained nearly $1 per hundredweight on a national average basis during January, as did canner and cutter cows.
The coldest weeks of the year are likely behind us, which usually brings optimism to cow-calf producers in every region. Pasture and range conditions will determine just how optimistic producers will become. An easing of the drought in the Southeast and adequate moisture in other regions should help support female prices toward spring.
This year’s market offers some opportunities for producers to trade old cows for younger ones. If prices for cull and market cows continue to increase and average bred-cow prices remain steady, in the $1,000 to $1,250 range, you could be looking at a swap to a younger producing female for about $400. That swap should pay dividends over the next two or three years as analysts expect average per-cow profits to remain good to excellent.
In Drovers’ auction market summary, prices for cows with large calves saw an increase of $61 per pair, to end January at $1,032.50. Prices for cows with small calves declined $65 per pair to average $878 per pair.
Young and middle-aged, bred-female prices drop-ped $32 per head, ending January at $785 per head. Aged, bred-cow prices increased $18 per head to $617. Bred-heifer prices declined $22 during January to $1,007 per head.
Young and middle-aged open females posted declines of $1.55 per hundredweight during January, ending at $56.35. Prices for aged cows decreased $2.58 per hundredweight to $42.75. Heiferettes ended the month at $61.35, a decline of $3.22 per hundredweight.
Prices for canner and cutter cows increased $1.03 per hundredweight during January, ending at $39.07. Prices for utility and commercial cows rose nearly $1 per hundredweight, closing the month at $47.02 per hundredweight.