The fall calf run for the Great Plains and Mountain States is underway. Price reporting for beef cattle and calves is fairly thin – particularly in Colorado – during the summers and the last three weeks have revealed a more significant number of transactions. May through August saw a counter-seasonal rally in feeders, but the recent increase in the contract price of harvested corn by more than $1 a bushel has halted this.
It will be interesting to talk to producers and lenders about the LRP strategy later in the year. The story of insurance bought in late spring and early summer will be quite different from that bought in early spring when the forage cattle market was moving up. Selling protection when the market is under pressure regularly disappoints.
Feeder markets from Colorado, Wyoming, Montana and Utah are all showing strong prices. Down from the mid July price spikes – when there was trading then – but good demand, strong interest and prices between the high $170 and mid $180 for 6-7 cwt steers. Heifers are usually $10 back from the steer price.
Nebraska and Missouri calf and beef cattle prices are stronger, but are increasing from high $180 to mid $200 for 6- to 7-cwt steers. Calves of 4 cwt fetched more than $2 a pound in many regions for much of 2022, but now bulls weighing 6 cwt or more fetch that price.
The underlying basket of fundamentals that has been much talked about this summer remains strong. Packer and retail margins and beef demand remain strong. Red meat in particular and protein in general are plentiful and of high value. International trade is important, but not the main driver – it appears to be the domestic consumer. Discussions about inflation and economic slowdown are problematic, but unemployment figures disagree.
While the news and market conditions appear bullish, I am less bullish going into October. On-feed numbers are seasonally high and long-fed stocks remain plentiful. The first part of the fourth quarter has to be content with big numbers and some of the heaviest battleweights. The production of red substitute meat is also strongest in the fourth quarter.
Source: Colorado State University, who is solely responsible for the information provided and fully owns the source. Informa Business Media and any of its affiliates are not responsible for the content of this information resource.