Patterns of feedlot placements and slower fed cattle marketing contributed to the first year-over-year increase in feedlot inventory (Nov. 1) in more than two years, but cattle supplies remain historically snug.
Calves and yearling feeder cattle sold steady to $5/cwt. higher during the short Thanksgiving week. Although trade remained light, cash fed cattle sales also sold in record territory as wholesale beef values inched ahead.
“If the years from 2007 to 2013 could be described as the ‘Grain Era,’ in which crop sector incomes had an extraordinary run, then the coming period may be described as the ‘Animal Era,’ when producers of animal products have strong returns,” says Chris Hurt, Purdue University agricultural economist.
Snug supplies and more farmer-feeders returning to the market as harvest winds down helped boost calf prices. Wholesale beef values gained on the week, helping lift the cash fed cattle traded reported through Friday afternoon.
Although beef consumption is declining due to tightening supplies, the fact is consumers are paying more for available supplies than they would if true demand weren’t increasing. Through the third quarter, the All Fresh Beef Demand Index increased 16 of the last 17 quarters year-over-year, according to Glynn Tonsor, agricultural economist at Kansas State University.
Dwindling supplies of yearling cattle commanded steady to firm prices this week. Calves in the Southern Plains and Southeast sold steady to $5 higher, bolstered by demand for calves to graze wheat pasture.