Fed price decline is historically steep

Fed price decline is historically steep

Using Kansas fed cattle data as the reference point, fed steer prices in Kansas declined 13.4% during this year’s July-August eight-week period.

Besides running counter to seasonal norms, the decline in fed cattle prices in late summer and early fall this year is extraordinarily sharp.

“Over the last 41 years, only 14 years (or 34%) had any decline in price,” explain analysts with the Livestock Marketing Information Center (LMIC). “Interestingly, during this 41-year time frame, the drop this year was only one of two drops total that were larger than 10%; the only other occurrence was in 1974 (down 18.9%). So, for this time of year, the fed market decline was unusually large and occurred when prices are normally increasing some.”

The reference point is Kansas fed steers going back to January of 1974 for all eight-week periods of the year; and the eight-week period of July and August. Fed steer prices in Kansas declined 13.4% during this year’s July-August eight-week period.

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Such a significant decline is more common when comparing August-September of this year to all other eight-week periods.

“Over the 41 years evaluated (including this year), 10 years (24%) had at least one period of a 13% or larger decline; the largest was the week ending Dec. 26, 2003 (down 26.2%),” LMIC analysts say. “Overall, declines of 13% or more sometime in a year are not uncommon, occurring on average roughly one out of every four years.”

 

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