“Cheaper feed costs and premiums on deferred CME live-cattle futures are making the lighter yearlings a more attractive investment,” say analysts with the Agricultural Marketing Service (AMS), explaining last week’s uneven cash trade.

Compared to the previous week, yearling feeder cattle weighing 600-800 lbs. sold steady to $2 higher, while those weighing more than 800 lbs. traded steady to $2 lower. Steer and heifer calves sold mostly steady, though they were only lightly tested in most trade areas.

There was no support from the fed-cattle trade, which lost a buck in the Southern Plains ($82) and $1-$2 in Nebraska ($131-$132 dressed) Friday, compared to the previous week. That, despite the bullish midyear cattle inventory and monthly Cattle on Feed reports issued a week earlier.

USDA's midyear cattle inventory report confirmed continued liquidation in both the beef and dairy cow herds. As of July 1, the beef cow inventory is 1% less than last year (32.2 million), while the inventory of dairy cows is 2% less than the previous year (9.2 million head).

The inventory of all cows and calves on inventory is 101.8 million, 1% less than a year earlier. The number of beef heifers retained for replacement this year is 2% less than a year ago. In light of the current dairy herd retirement programs, it’s interesting to note the number of dairy heifers retained for replacement is unchanged from a year ago.

“Similar to last year, higher feed grain costs has resulted in a number of calves placed out on pasture before being placed on feed,” explain analysts with the Livestock Marketing Information Center. “But, nationwide, smaller calf crops have compensated for longer grazing periods. Thus, as of July 1, the calculated number of feeder cattle outside of feedlots was around 38 million head, down about 200,000 head from last year.”

According to the most recent Cattle on Feed report, there were 9.8 million head on feed for slaughter as of July 1, 5% fewer than a year earlier. The inventory of steers was down 7% from a year earlier (5.99 million) and heifers were down 3% (3.72 million head). Placements in June (1.39 million) were 8% less than a year earlier and represent the second-lowest number of placements in June since the series began in 1996.

“Cattle feeders have become weary from buying in an active and competitive market, and selling in one that is not,” say AMS analysts. “The business has lost its luster of trading slim losses for the opportunity to hit occasional homeruns, turning instead to scant profits on outstanding performing cattle amid bankruptcy-sized wrecks. Several small to mid-sized custom feeding yards in the Southern Plains now have padlocks on the front gate and the number of independent cattle feeding investors or cow-calf producers who want to maintain ownership shrinks every year. The industry is now overwhelmed by corporate feeders or conglomerate subsidiaries that operate on economies of scale and the slim margin of the basis between cash and futures. The option of feeding out cattle to many calf producers or backgrounders has become most unlikely.”

The summary below reflects the week ended July 31 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
OK 28,200 $107.51 $105.40 $103.26 $100.94 $98.66 $97.15
TX 27,500 $100.04 $102.17 $96.75 $95.88 $95.70 $95.16
MO 22,000 $112.82 $108.79 $106.62 $101.91 $100.46 $98.07
KY* 18,400 $107.76 $106.05 $103.76 $95.07 $91.69 $92.34
KS 13,900 $114.76 $108.12 $106.76 $103.422 $101.35 $98.33
NE 12,300 $118.48 $114.86 $108.53 $115.08 $107.68 $99.10
SD 12,300 $121.72 $113.59 $110.53 $106.922 $105.10 $98.98
AL 12,200 $101.32 $97.04 $93.02 $92.96 $88-51 $84.43
AR 8,400 $102.29 $99.84 $98.084 $93.74 $91.30 $90.444
FL* 8,200 $88-99 $84-95 $65-86 $79-96 $77-98 **
GA*(***) 8,000 $88-105 $84-100 $80-92 $82-94 $79-89 $77-85
Carolinas 7,300 $90-106 $86-104 $81-95 $78-95 $78-89.75 $73-84.50
TN* 7,200 $101.28 $99.22 $92.41 $92.51 $88.21 $84.45
MS* 5,400 $92-1051 $90-1023 $90-100 $85-951 $80-933 $80-855
LA* 3,500 $89-102 $87-98 $85-924 $78-100 $81-98 $80-904
NM 2,100 $110.58 $95.52 $95.417 $92.19 $86.79 **
VA 1,600 $108.892 $101.284 $96.27 $89.912 $90.66 **
WA* 1,500 ** $92.306 $92.387 ** $89.664 $88.736

* Plus 2
** None reported of the same quality at this weight or near weight
(***) Steers and bulls
(?) As reported, but questionable
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.