A month ago, both bred-cow and bred-heifer prices showed weakness. That trend for replacement females may continue into the new year, but slaughter cows may have already started a seasonal trend higher.
Market cow prices started moving slightly higher before Christmas and historical data suggests that trend will continue into late winter.
Much of the weakness seen in the female markets during the late fall was attributed to widespread drought throughout much of the country, coupled with rising winter feed costs. Many producers, especially those in the drought-ravaged southeastern United States, are facing carrying costs that will force herd liquidations. Analysts believe replacement females will see price pressure early in the year, especially if feed costs move higher.
As winter gives way to spring, moisture will play the major role in determining replacement female values. Precipitation that will produce forage in the Southeast and West will help boost bred-female prices by spring.
If you’re looking to increase your herd numbers, or if you’re just seeking to trade old cows for younger ones, this year’s market offers some opportunities as prices seem to be at attractive levels. If prices for cull and market cows increase as expected this winter, and average bred-cow prices remain steady, in the $1,000 to $1,250 per head range, you could be looking at a swap to a younger producing female for about $400.
Will that swap pay? Given the fact that market fundamentals do not suggest a national herd expansion is underway, the industry should see another two or three years of average per-cow profits in the good to excellent range.
In Drovers’ auction market summary, prices for cows with large calves saw an increase of nearly $42 per pair, to end December at $971.25. Prices for cows with small calves increased $27 per head to average $878 per pair.
Young and middle-aged, bred-female prices increased $59, ending December at nearly $818 per head. Aged, bred-cow prices increased $44 per head to nearly $600. Bred-heifer volume was too light during December to provide a reliable market test.
Market cow prices were mostly steady for the month. Young and middle-aged open females posted an average of $57.90 per hundredweight during December, an increase of 15 cents per hundredweight. Heiferette prices declined 73 cents per hundredweight to $64.57.
Prices for canner and cutter cows increased 70 cents per hundredweight to end December at $38.04. Utility and commercial cows posted a 10-cent decline for the month to $46.11 per hundredweight.