An incoming bumper crop of corn and soybeans has signaled the market for lower grain prices. But before cattle feeders get excited about cheaper feed, DuWayne Bosse, a livestock hedger for Bolt Marketing, offers a bit of caution.  

“Cheap feed – that’s what scares the heck out of me,” Bosse says, later adding “Cheap feed usually equals higher carcass weights.”

According to him, carcass weights are currently below last year’s level by around 16 lbs. for steers, and weights increased by 2 lb. this week. However, with added inventory due to quicker than anticipated herd expansion already putting pressure on markets, cattle feeders need to avoid the, “Why not feed them longer, I’m not making money anyway,” marketing plan since it will only hurt prices more.

Bosse says he believes cattle prices have already made a low, however, if carcass weights go up, then the market isn’t finished dropping. According to his estimations, this will be below $100 per cwt, to even $90 per cwt.

To see the entire interview with Bosse on Ag Day TV, click the video below.

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