Feeder cattle review: Cash prices cause "sticker shock"

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Compared to last week, feeder and stocker cattle sold unevenly steady to 3.00 higher.  For the most part, feeder markets defied last Friday’s bearish cattle-on-feed report with even CME Feeder Cattle contracts opening the week with sizeable gains and continuing strong through the week.  However, cash prices on some of the highest demanded cattle and most popular weights did level-off after last week’s “sticker shock”.  The average price for 6 weight steers in the South Central Region and for 5 weight steer calves throughout the Southeast was slightly lower.  Softer fall-born new crop calves are making their way onto the scene and widening the price spread against the rugged old croppers. 

Nevertheless, most top quality 600 lb steers with a longtime weaned and lightly fleshed condition that is suitable for grass yielded prices north of 2.00/lb near the major grazing regions.  There are not enough of these types of stocker cattle to go around and when they arrive on offer in an auction setting bidding becomes rampant.  Grazers know that if these cattle are ready to hit the ground gaining on pasture, that there may still be room for profit if they can get possession for less than 1300.00 per head and spend less than 100.00 for their summer rent.  They need these cattle to gain their heads off and press-down hard on the scales late this summer or early fall when they take the cattle off grass.  As high as yearlings are, there is reason to believe that prices could escalate even farther this summer. 

Some analysts are projecting that early fall slaughter hog supplies could be 15-25 percent lower than last year.  The Porcine Epidemic Diarrhea Virus (PEDv) has been devastating to newborn unweaned pigs, especially during the coldest winter weather.  Friday’s USDA Quarterly Hogs and Pigs report showed the December through February pig crop to be down 3 percent from 2013 and total swine inventory to be 3 percent less than last year.  The results of the pork industry’s struggles could allow all-time record-high priced beef to actually have an advantage in fall meat cases.  Fed cattle sold mostly 2.00 higher from 150.00-154.00 live and 2.00-3.00 higher from 244.00-245.00 with feedlots remaining very current as they have been pulling cattle ahead all winter.  In fact, handsome markets have prompted cattle producers at every level to sell cattle ahead of schedule.  Most auction markets are reporting lower quality clean-up type offerings which is indicative of exhausted supplies.  This week’s reported auction volume included 52 percent over 600 lbs and 42 percent heifers.       



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