– Kenny Burdine, Livestock Marketing Specialist, University of Kentucky

As I mentioned last week, I want to send out a short weekly update on our cattle markets for the near term. Things are very volatile and are moving very fast, so I think more frequent communication is probably better right now. USDA-AMS sends the Kentucky weekly livestock summary out on Friday, which really includes sales from the previous Friday to Thursday (the day before). This summary is based on sales from March 20-26.

While I try to follow daily reports from across the state, I typically view those mostly anecdotally. I feel more comfortable sharing weekly summary data that compiles a large number of cattle sales. But, this can also be misleading when markets are moving quickly as prices can be very different from early week sales to late week sales. Last week was a good example as markets were down sharply, but showed quite a bit of improvement in the second half of the week. That strength continued into this week and summaries are showing huge improvements. Prices rallied across the board at Kentucky auctions. Virtually every category is quite a bit higher – calves, feeders, cows, and bulls. To be honest, I send this out with some hesitation as I am afraid it overstates the improvement in the market and may not Continue reading →

– Brenda Boetel, Professor, Department of Agricultural Economics, University of Wisconsin-River Falls

The USDA released the latest Cattle on Feed report on March 20. Overall the report was neutral, and there were only slight deviations from the analyst’s expectations for the report.

Cattle and calves on feed for feedlots with capacity of 1,000 or more head totaled 11.8 million head on March 1, 2020. This is essentially unchanged from 2019, which was 11.7 million. Cattle on feed over 90 days is up 0.2%.

Marketings of fed cattle during February totaled 1.78 million head, 5.5% over 2019, with the same number of marketing days. Marketings represented 14.9% of the cattle on feed. March will likely see higher year-over-year marketings as well given the number of cattle on feed and the higher number of cattle on feed over 90 days.

Placements in feedlots during February totaled 1.71 million head, 7.9% below 2019. Net placements were 1.65 million head, down 7.8%. Although placements were expected to Continue reading →

– David P. Anderson, Professor and Extension Economist, Texas A&M AgriLife Extension Service

Cattle and calf prices, futures markets, cutout prices, and provide many great topics for discussion. This week we’ll focus on beef supplies. It just so happens that in today’s volatile market large amounts of beef (and pork and poultry) are available.

With just 2 days left in the first quarter of 2020, fed steer and heifer slaughter is up 5.4 percent over last year. Cow and bull slaughter is up 4.5 percent over last year. Steer dressed weights are 22.5 pounds greater than in the first quarter last year, while heifer average weights are 13.7 pounds heavier. Cow weights are up 2.6 pounds. Saturday slaughter rates have jumped dramatically as packers work through these large supplies of cattle offered. The last Saturday of March had an estimated 75,000 head slaughtered compared to Continue reading →

– Kenny Burdine, Livestock Marketing Specialist, University of Kentucky

Feeder cattle markets continue to get hit hard. Not surprising, volumes were quite light last week, but prices still dropped drastically. Based on weekly averages, 850 lb Medium / Large Frame #1-2 steer price is down nearly $22 per cwt over the last two weeks. After holding impressively for the first two week of March, calves finally fell sharply last week too. The state average price for a 550 lb Medium / Large Frame #1-2 steer has dropped by $15 in the last two weeks. Figure 1 shows both these price series, going back to the second week of January (price data was not available for the first week of year).

Figure 1: Feeder Steer Prices since the First Week of January
Kentucky Average ($ per cwt)

Source: USDA-AMS, Livestock Marketing Information Center, and Author Calculations

A frustration for a lot of cattle producers is that Continue reading →

– Dr. Kenny Burdine, Livestock Marketing Specialist, University of Kentucky

I’m on the record being relatively optimistic about cattle markets in 2020. After some very tough years, decreasing cattle numbers and a positive outlook for exports gave me reason to expect better prices in 2020. The first couple of months even seemed to confirm my prediction. But, here we are and I see very little reason to talk about much other that the main topic at hand this month. Virtually every market that exits is currently trying to grasp the impact of the COVID-19 virus. In truth, there is little precedent for something like this in the marketplace, so making predictions is nearly impossible. Further, the situation is evolving as we speak and will undoubtedly change between the time I write this (3-16-20) and the time it is read. Obviously, I can’t address the medical side of the issue, but I thought it might be useful to talk through some things relative to the cattle markets.

I am including monthly price charts through the second week of March, but they don’t completely tell the story at hand as quickly as markets are moving. Heavy feeder cattle prices were extremely strong as we closed out 2019 and dropped considerably in January and February (see figure 1). This drop is seasonally normal, but it was a sharper drop that usual this year and COVID-19 may have Continue reading →

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle traded $3 to $4 lower compared to last week. Prices on a live basis were mainly $109 to $110 while dressed prices were mostly $173 to $175.

The 5-area weighted average prices thru Thursday were $109.35 live, down $3.96 compared to last week and $174.20 dressed, down $6.85 from a week ago. A year ago, prices were $126.98 live and $204.03 dressed.

Most markets in the cattle and beef complex are moving contra-seasonally due to world heath issues and the economic slow-down that comes with it. When relief finally comes is anyone’s guess, but there should be just as strong of profits on the other side of this market as there are losses in the current environment. This appears to be the opposite scenario compared to what happened to markets from 2014 through 2016. The current situation is not expected to play out over three long years, but the market is expected to rebound at some point in the near future and provide big profits for cattle feeders who make feeder cattle purchases at these low prices. It is beginning to look like Continue reading →

– Dr. Elliott Dennis, Assistant Professor, Livestock Marketing Economist, Department of Agricultural Economics, University of Nebraska – Lincoln

The media and market attention surrounding coronavirus (COVID-19) has been near deafening. Uncertainty surrounding the severity, transmission rates, case fatality, and government policies has induced large amounts of volatility into the markets. Market analysts are still trying to sort through and estimate the impacts that COVID-19 will have on country specific economic growth, consumer spending, and food purchases away from home.

Beef is currently wading through how COVID-19 will impact domestic (retail vs. grocery) and export demand. The recent government suggestions on “social distancing” and “self-quarantine” have many wondering how this will affect food service demand. Given that beef has a large market penetration in food service and roughly half of total US food expenditures is consumed away from home there is likely to be some decrease in domestic beef demand. Beef export demand is going to be largely affected by the number of growing cases and government imposed containment strategies in countries where the US exports large amounts of beef.

Prior to the sustained market impacts of COVID-19, beef supplies were already Continue reading →

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

The past couple of meetings I have spoken at I have briefly discussed some benchmarks for conception rate, calving rate, and weaning and marketing rate. The reason this has been a topic is because of the concern about cattle prices. Many producers are concerned about cattle price, but I would contend that many cow-calf producers are losing more money from not getting cows bred and not getting calves to the age of marketing than they are through market price swings.

The benchmark values I suggest is a 95 percent conception rate, 94 percent calving rate, and a 90 percent weaning and marketing rate. Thus, a producer with 30 cows needs to have 27 marketable calves each year while the producer with 100 cows needs 90 marketable calves.

For many producers, these benchmarks are not being met which means the market price has no impact on animals that never make it to marketing. This is meant to encourage producers to focus on management aspects that improve the likelihood of actually having something to market.