Seasonal Demand For Feeders Running Ahead Of Calves
April 19, 2011
Between deepening drought in the Southern Plains and the narrowing window for having stockers ready for summer grass, prices for feeder-weight cattle are taking on more shine than those offered for calves and stockers the past two weeks.
Of course, all classes and weights have run out of the hyper-activity that characterized the market through the winter.
Specifically, feeder cattle sold steady to $3 higher two weeks ago, while calves and stockers sold from mostly $3 higher to $6 lower. Last week, the Agricultural Marketing Service (AMS) reported calves and yearling feeders selling $2-$5 lower, with calves taking the brunt of the hit in most cases.
“Several auctions noted a high percentage of new-crop calves in the offering (last week), as these soft unweaned calves will find limited outlets as order buyers have already filled grass orders,” explained AMS analysts Friday. “Dry conditions in Central and Western Oklahoma ranging down into Texas continue to take a toll on the feeder market. Reports from El Reno, OK, note that because of drought conditions, a lot of heavy yearling cattle came to town that normally would sell next month.”
Long liquidation in cattle commodities didn’t help last week’s markets, either. AMS analysts say there’s growing nervousness in the market that rising food and energy costs will dampen consumer beef demand.
For perspective, the Consumer Price Index (CPI) for all food in 2011 is projected to increase 3-4%, according to Economic Research Service (ERS) analysts in “Food CPI and Expenditures: CPI for Food Forecasts.”
“Although food-price inflation was relatively weak for most of 2009 and 2010, cost pressures on wholesale and retail food prices due to higher energy and food commodity prices, along with strengthening global food demand, have pushed inflation projections for 2011 upward,” say ERS analysts.
The all-food CPI increased 0.8% between 2009 and 2010, the lowest food inflation rate since 1962. Food-at-home prices increased by 0.3% – the lowest annual increase since 1967 – with cereal and bakery prices declining 0.8% and processed fruit and vegetable prices dropping 1.3%. Food-away-from-home prices rose 1.3% in 2010, the lowest annual increase for restaurant prices since 1955.
Another point to consider comes from ERS analysts in the latest Livestock, Dairy and Poultry Outlook: “Higher prices currently characterize the entire cattle/beef complex from cow-calf through retail. However, increasing supplies of fed cattle from last fall/winter’s heavier year-over-year placements are expected to exert downward pressure on fed-cattle prices when they begin to come to market during the second quarter of 2011.”
The summary below reflects the week ended April 15 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 |
Calf Weight |
OK |
MO |
Dakotas |
TX |
KY* |
KS |
AL |
NE |
AR |
MT |
Carolinas* |
GA*** |
IA |
TN* |
WY |
MS* |
FL* |
CO |
NM |
VA |
WA |
* 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.
8850-900 lbs.
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