Futures Push Calf-Feeder Prices Higher

It was only one week, and a short one at that, but last week’s markets were a breath of fresh and

It was only one week, and a short one at that, but last week’s markets were a breath of fresh and badly needed air.

August live cattle were limit-up at the Chicago Mercantile Exchange Monday. Nearby corn futures were limit-down the next day, following news that 2 million more acres had been planted than originally thought (see “Two Million Extra Acres of Corn.”).

By the end of the holiday-shortened week, analysts with the Agricultural Marketing Service (AMS) pointed out, “August feeder cattle contracts gained $4.48 during the four-day trading session, moving independently, not the usual derivative of the corresponding live cattle contract.”

This optimism abounded at auction.

“Compared to last week, feeder cattle and calves sold firm to $4 higher on a light pre-holiday test that was heavily concentrated to the Southern Plains with most Western and Northern Plains markets extremely slow and the Southeast (with the exception of Arkansas) completely shut down for the Independence Day marketing break,” say AMS analysts.

Feedlots gained some ground, too, but not as much as many hoped given developments in other market sectors. Live trades in Kansas last Thursday picked up a dollar to $83. Southern Plains trade had yet to develop by late Thursday.

As for worries about the impact the dairy herd liquidation would have on the overall market to this point: not much. Fact is, though more dairy cows are coming to market, fewer beef cows are.

According to the Livestock Marketing Information Center (LMIC), total federally inspected cow slaughter was 3% higher than last year on a weekly basis through the middle of June, though 16% higher than the five-year average. Beef cow slaughter is down 6% compared to last year, while dairy cow slaughter was up 15% (20% more than the five-year average).

“Dairy cows have accounted for nearly half of the total cow slaughter mix this year, which is up from about 40% for the same timeframe last year,” say LMIC analysts.

Logic says the reduction in year-to-year beef cow slaughter is due to fewer beef cows rather than any industry-wide expansion.

The summary below reflects the week ended July 2 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
OK 25,600 $108.21 $104.33 $102.44 $98.43 $98.45 $96.02
MO 22,500 $113.48 $108.15 $102.71 $98.34 $98.85 $98.25
TX 18,500 $95.74 $97.62 $92.50 $91.73 $87.74 $87.134
AR 2,400 $100.09 $96.63 $92.154 $91.78 $88.84 $87.834
NM 1,600 $112.52 $98.84 $93.774 ** ** **
VA 1,500 $104.88 $101.90 $90.197 $94.35 $89.63 **
WY* 2,000 ** $102.074 ** ** ** **
WA* 3,500 $106.69 $103.84 $96.78 $101.83 $98.26 $90.83

* Plus 2
** None reported of the same quality at this weight or near weight
(***) Steers and bulls
(?) As reported, but questionable
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.