Softer prices this week may have many asking the question if the “spring” highs for finished cattle are already set. Cattle feeders had urgency due to live cattle futures declining much of the week while packers have recently seen late week live cattle rallies that forced them to pay higher prices. Both parties had reason for urgency as it relates to trading cattle.
Cattle feeders and packers were able to come to terms and trade cattle well before the end of business on Friday. Cash cattle trade did not wait until the clock struck midnight to trade this week. A year ago prices were $124.83 live and $199.99 dressed. The 5-area weighted average prices thru Thursday were $126.80 live, down $1.35 from last week and $204.30 dressed, down $0.15 from a week ago. Prices on a live basis were mainly $126 to $127 while dressed prices were mainly $203 to $205. Griffith, University of TennesseeįED CATTLE: Fed cattle traded $1 to $2 lower than last week on a live basis. This form is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.– Andrew P. Spam protection has stopped this request. Posted by Smith at 5:05am January 4, 2023 Whether you consider using futures, options, or USDA’s Livestock Risk Protection (LRP), there are tools available for producers of every size to offload some price risk if you wish to do so. The current optimism in markets will very likely allow for stronger pricing opportunities than in past years. The start of a new year is a good time to consider price risk management opportunities ( click here to read Kenny’s February 2022 newsletter about risk management considerations). The 2023 live cattle contracts are near $160. All of the fall 2023 feeder cattle contracts are above $200 per CWT and the spring contracts are near $190 (see chart above). Looking ahead, CME futures prices for 2023 contracts are trading at levels not seen since 2015. It will be interesting to see whether the one of the coming months tops the November total or if we have already reached the seasonal peak. Feedlot supplies typically peak seasonally during the winter, but December was a decline from November in 2022 (see chart above). Placements during November were down 2 percent year over year while marketings were up 1 percent. This was the third consecutive month with a lower than year-ago total. The report showed cattle on feed at 11.7 million head which was nearly 3 percent lower than December 1, 2021. The December 1 Cattle on Feed estimates were released just before Christmas. High cattle prices could send signals to expand, but producers will still need adequate pasture or economical feedstuffs to do so. Many areas have received rain in recent weeks which helped improve the drought monitor some.
#Feeder cattle prices 2018 driver
Drought conditions worsened near the end of 2022 and how long dry conditions persist into 2023 will be a key driver for cattle markets. Higher grain prices continue to be a challenge for producers. Fed cattle prices have improved by $50 per cwt since December 2020 when markets were still wrestling with the worst of the pandemic impacts – approximately a 50 percent increase. If we compare to two years ago, the differences are stark. Fed cattle prices are up nearly $20 per CWT above year-ago levels. Such is the cyclical nature of the cattle industry – production decisions have long impacts.Ĭattle markets improved throughout 2022. Although it is only January, the stage is already set for tighter cattle and beef production in 2023. The resulting impact for 2023 is these cows and heifers will not be producing calves this year. Around 12 percent more beef cows and about 5 percent more heifers were processed in 2022 than in 2021. The rate of beef cows and heifers processed was particularly noteworthy. James reviewed last year in the last newsletter of 2022 (available here). But the overall projection is for stronger cattle market prices.Ģ022 was a unique year for cattle production and markets. There will be challenges ahead, especially with navigating higher input costs and questions about beef demand in 2023. We are entering 2023 with the expectation of a smaller calf crop that is more similar in size to 2014 than to recent years. Cattle supplies tightened in 2022 while beef demand remained relatively steady. The optimism surrounding cattle markets at the start of this year is the highest since 2014-2015. – Josh Maples, Assistant Professor & Extension Economist, Department of Agricultural Economics, Mississippi State University
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