Feeder cattle review: Markets stay busy with higher prices

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Compared to last week, all weights and classes of feeder cattle and calves sold $1-$5 higher with active trading noted in most major marketing areas. 

The full advance of the market was most evident on the middle-weight cattle, those weighing from 500-800 lbs.  Competition has increased on these cattle and grass interests are becoming more prevalent as winter’s tight grip is starting to ease near the major grazing areas. 

This is the time of year when the term “stocker” starts to be used to describe cattle that are in condition to be turned-out on pasture.  These cattle can weigh anywhere from 200-850 lbs, but they can’t be so fleshy that the high roughage diet makes them go backwards.  Even lighter calves can lose weight on pasture if they have been heavily supplemented and suddenly find they only have grass to eat. 

On the other hand, thin-fleshed cattle that have been getting-by through the long-cold winter on poor quality hay or what was left of last year’s grass will hit the ground running.  The easy weight that these cattle realize is called “compensatory gain” and these pounds can be achieved at a fraction of the cost of normal backgrounding. 

In late winter and early spring, buyers often show their fangs when trying to purchase cattle in this condition.  At the OKC-West El Reno, OK Livestock Market a package of thin 350 lb steer calves brought $278; at the St. Joseph, MO Stockyards a half load of fancy and gaunt (empty) 550 lb steers hit $232.25; while Bassett, NE saw a heavy load of fancy 620 lb steers drop the gavel at $210. 

Orders for stocker cattle are only going to get more aggressive as the calendar turns to March and April.  Producers have been selling their calf crop ahead this year with record prices and a miserably cold winter to blame.  Friday’s cattle-on-feed report showed January placements up 8.6 percent and much larger than the industry had estimated.  On feed inventories as of February 1st were in-turn slightly higher than expected at 97.2, but marketings were lighter than thought at just 94.5 percent of the same time a year ago. 

Normally, the bearish placement figure would send feeder cattle prices lower the following week.  But, the industry is fully aware of tight supplies and the thought that our calf sales are up 9 percent for the year (year-to-date nationwide auction receipts are also up 9 percent) could cause stocker buyers to push the envelope even farther from fear of scarce availability this spring. 
Two full weeks of limited fed cattle sales, from feedlot managers keeping the gates closed to sharply lower bids, finally pulled the direct slaughter cattle market to an agreeable level.  Short-bought packers paid $145 to the Southern feedyards and $230-$231 dressed to Northern lots, $3 higher and $5-$6 higher respectively over last week’s thin test. 

This week’s reported auction volume had 58 percent over 600 lbs and 42 percent heifers.



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