“For hogs, broilers, turkeys, and steers and heifers, this summer has seen the best feed price ratios since 2006,” say analysts with the Livestock Marketing Information Center (LMIC). “With expectations of even lower feed costs in the fourth quarter, feed price ratios are expected to continue to improve, and in some sectors could break records.”

Although alfalfa and other-hay prices remain high compared to normal, LMIC analysts point out that corn declined this month to its lowest value since 2007. Meanwhile, soybean prices are the cheapest since 2011, and wheat is the least expensive since 2010.

Incidentally, according to the latest outlook from the Climate Prediction Center at the National Weather Service, odds favor El Niño conditions developing in the next 1-2 months in the Northern Hemisphere and lasting until early 2015. Analysts there also say that odds favor the El Niño being relatively weak.

In the meantime, LMIC analysts say, “Feedstuff prices are likely not at the lowest point of the year and are expected to weaken further as harvest continues.”

That was before the monthly World Agriculture Supply and Demand Estimates (WASDE) was issued Friday.

Corn production is projected 80 million bu. more in the latest WASDE report to a record 14.475 billion bu. As such, WASDE analysts trimmed 10¢ from both ends of the projected season-average farm price to $3.10-$3.70/bu.

In turn, declining feed costs are increasing average beef carcass weights.
 

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Dressed steer weights the first three weeks of September were 25-29 lbs. heavier than the five-year average, according to LMIC analysts. According to weekly USDA-AMS data, dressed steer weights those first three weeks were 887-889 lbs.

“While it was expected that record-high fed cattle prices would entice feedlots to move cattle through the marketing chain, it appears steers and heifers were held back to put on a few extra pounds before being shipped, and these heavier animals have now begun to show up at the packers,” LMIC analysts say.

LMIC expects weights to remain historically high through the remainder of the year as the heavier animals filter through the system.

“In a year with a more normal supply of cattle, increased weights would most certainly dampen fed cattle prices,” say the LMIC folks. But, they expect the market to be able to absorb the heavier weights and still maintain fed cattle prices near current levels.
 

Other helpful BEEF resources:

Why The Cattle Market Is At A Critical Juncture

Cost Of Developing 2014 Heifer Calves Will Be Record High

What Are Corn Stalk Bales Worth?

How To Treat Lump Jaw Disease In Cattle