– Dr. Kenny Burdine, Livestock Marketing Specialist, University of Kentucky
Following up from last month, the feeder cattle market has not pushed much higher, but has managed to hold its ground. At the time of this writing (September 8, 2017), most all CME© Feeder Cattle futures contracts were trading in the mid-$140’s. Fed cattle prices, which didn’t reach their annual lows last year until mid-October, still haven’t found a bottom for 2017. Slightly lower grain prices have helped somewhat, as has better news on the export front. The horrible flooding in Texas continues to be something to watch, but overall markets have not shown much reaction. Clearly, a large number of cattle and producers were adversely affected.
Glancing at the local cash market price charts that follow, the general downward trend has continued. Calf markets should continue to decline seasonally for the next month or two. Heavy feeder cattle usually peak in late summer or early fall, so 2017 may be a year with a July top. It is worth noting that August average prices were pulled down somewhat by a sharp drop in the last week of the month. Prices in the first week of September were more in line with what was seen in the first three weeks of August.
While rainfall has been a serious problem for many producers, it has set many Kentucky cattle operators up very well for fall grazing. We had nearly three inches of rain at my house from September 1st through September 5th, and more is expected for the week of September 11th. The combination of moisture and cooler temperatures should really support pasture growth. The best defense against market declines is usually weight gain and fall pasture growth should provide an opportunity to add some inexpensive pounds to calves or feeders. Stockpiled forage is also an excellent way to reduce winter feed needs for a cow-calf operation. Regardless of the situation, cattle producers should take advantage of this growth to the best extent possible.
Figure 1. 550# Medium & Large frame #1-2 Steers
KY Auction Prices ($ per cwt)
Source: USDA-AMS, Livestock Marketing Information Center, Author Calculations
Figure 2. 850# Medium & Large Frame #1-2 Steers
Kentucky Auction Prices ($ per cwt)
Source: USDA-AMS, Livestock Marketing Information Center, Author Calculations