We are seeing a divergence between fed and feeder cattle prices as slaughter cattle prices improve and feeder cattle prices weaken. The chart is not pretty and it is keeping us from building any momentum this spring. May CME© feeder cattle futures have dropped by about $15 per cwt since early April. The impact of this on feeder cattle markets is very clear and is having the largest impact on heavy feeder cattle. But, it is sobering to know that the current expectation is that we still have corn around $5 come winter. At this point, we don’t know how many acres of corn will actually be planted in 2021 and we don’t know what conditions will be like during the growing season. But, even new crop prices are very high by historical standards as December 2021 CME© corn futures settled just under $5 per bushel to end last week. It is always important to distinguish between old crop and new crop when discussing grain prices and clearly the current market is reflective of old crop. The price chart for Omaha corn above is just used to illustrate the trend that we are currently seeing. James actually wrote about this right after the Prospective Plantings report came out and corn prices have continued to rise since that time. Nothing rains on a feeder cattle parade like expensive corn and that is exactly what we are seeing this spring. While there are reasons for optimism about the expectation of fed cattle prices, it’s hard not to be very concerned about the level of feed prices in the current market. But, when it comes to feeder cattle markets, there is an elephant in the room and that elephant is shown on the second chart above.įeeder cattle markets are expectation markets that are primarily driven by two things: (1) the expected value of fed cattle in the future and (2) the cost of getting those feeder cattle to that point. We have also seen an encouraging start to beef exports this year, which always bodes well for prices. And, warmer temperatures open up increased opportunities for outdoor dining at restaurants that are still under capacity limitations. COVID restrictions are likely to continue to be eased over the upcoming months. This can be seen in both the 2015-2019 average and the 2021 price line on that same chart.Ī lot of demand factors are encouraging as we move through spring. Historically, May is a good month for fed cattle and beef prices as weather is warming up and we are moving into the spring grilling season. Early May was about the low point for cattle harvest in 2020 and can be easily picked out by the bottom made this time last year in the slaughter steer price chart above (see the dotted 2020 line). A quick look at the year-ago column of the price table below reveals how much better things are in most markets than they were this time last year as we were dealing with increasing challenges from the COVID-19 pandemic. Closing arguments made for the Brett Cattle Company court case.– Kenny Burdine, Livestock Marketing Specialist, University of KentuckyĪs I write this on the first Monday of May, it’s hard not to think about all the changes we have seen over the last year.ASEL, Moss and McCarthy reviews and recommendations and.Finalisation of Indonesia-Australia Comprehensive Economic Partnership Agreement (still to be ratified in 2019).The introduction of independent observers.Opening of the $5 million Berrimah livestock yards. Nationwide, the live cattle industry has already surpassed the one million head mark exported for 2018, with export numbers from January to November sitting at 1,007,805 head.ĪBC Rural asked the Northern Territory Livestock Exporters Association (NTLEA) to name some of its highlights and challenges for 2018, to which it replied. The price for heavy steers shipped to Vietnam via the Townsville port is ending the year at around $3 a kilogram. Mr Jenkins said if western Queensland and other drought-affected regions were to receive significant rain over the summer, it would have "a very large impact" on cattle prices in 2019, as exporters would be competing with producers looking to restock. "Financially it's still difficult though, with high domestic prices making it tough and our traditional market of Indonesia is still suffering from a secular shift in demand with the importation of Indian buffalo meat." "I think 2017 was a bit dire for most, so 2018 has seen an increase in volumes for most exporters. Subscribe for the national headlines of the day. Mr Jenkins said while cattle producers were now enjoying a lift in prices, the market conditions for exporters were still tough.
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