In November, the weighted-average price for feeder steers weighing 750–800 pounds at the Oklahoma City National Stockyards was $226.83 per hundredweight (cwt.), a $16.67 decline from October, according to USDA’s latest “Livestock, Dairy, and Poultry Outlook” report. In the December 4 sale, feeder steers topped $219.30/cwt., a decline of $3.71 from the prior week but more than $42 above the same week last year. The chart below shows weekly prices and quarterly price forecasts.

USDA economists Russell Knight and Hannah Taylor said several factors are likely contributing to lower feeder calf prices. Wholesale beef prices have been trending lower since the shorter-than-expected seasonal uptick in late October. This, they said, has encouraged packers to try to minimize the prices paid for fed cattle by managing throughput. Knight and Taylor said this is likely putting a squeeze on feedlot returns for calves purchased at higher levels in the summer and coupled with declining futures prices for fed cattle may be affecting feedlots’ willingness to pay higher prices for feeders.

Further, they said less heifer retention is probably helping support supplies available for placement. Accounting for recent price weakness, USDA has lowered the fourth-quarter price forecast for feeder steers by $10 from last month to $230/cwt. That price weakness is expected to continue into 2024. As such, the forecast of annual prices is lowered $10 to $242/cwt., 11% higher than 2023.

As previously noted, wholesale boxed beef values have declined steadily through early December, and fed cattle prices have also declined. The November average price for fed steers in the 5-area marketing region was $178.72/cwt., $5.59 lower than October. As a result of current fed cattle price weakness, the fed steer price forecast for fourth-quarter 2023 is lowered $7 from last month to $178.00 per cwt. Knight and Taylor said price weakness was carried over to next year with expectations that more cattle will be available for marketing than previously expected. Concerns over future demand strength also remain, they added. Consequently, 2024 prices are lowered $7.00 to $178.00/cwt., still above 2023 levels and historically high.