Although calf prices last week remained regionally uneven, yearlings sold steady to $3 higher and steer calves weighing less than 550 lbs. sold firm to $5 higher, according to the Agricultural Marketing Service (AMS) Friday.
“Un-weaned bawlers over 550 lbs. continue to be scrutinized and sold weak to $3 lower with additional discounts for being fleshy or having a snotty nose and a look in their eye that they weren’t feeling the best,” AMS analysts said Friday.
Likewise, AMS reporters at various auctions across the country last week continued to document buyers discounting calves without vaccinations.
Calf and feeder prices were supported this week by surging futures markets that grew healthier with the advance in wholesale beef values and higher cash fed cattle prices (see "Fed Cattle & Wholesale Beef Prices Move Higher").
At least futures rallied until Friday when lower outside markets and profit taking took their toll. Even so, Live Cattle futures closed an average of $1.45 higher across the board, week-to-week, except for 35¢ higher at the very back. Feeder Cattle futures closed an average $3.59 higher through the first six contracts week-to-week; an average of $1.63 higher at the back. The CME Feeder Index was up $1.28 Friday, compared to the previous week.
“Lightweight steer calf prices are steady to higher relative to heavier feeder cattle. This price relationship reflects expectations for wheat pasture and for higher feeder cattle prices in 2013 to affect prices for lighter weight feeder calves…” say analysts with the USDA Economic Research Service, in the monthly Livestock, Dairy and Poultry Outlook (LDPO) released last week. They add that the price relationship also reflects current negative cattle feeding margins.
As it is, feedlot placements have been sharply lower year-on-year for the past three months (see "Cattle On Feed, Placements, Marketing – All Lower Than Expected").
“Prices for all classes of feeder cattle are expected to gain strength in 2013 as reduced cattle inventories lead to reduced feeder cattle supplies and increased demand for feedlot placements and replacement heifers,” LDPO analysts say. “Retention of replacement heifers will further reduce feeder cattle supplies… However, it is likely that beef cowherd expansion will be limited until feed grain supplies increase and prices decline to levels that will allow at least anticipation of positive margins for cattle feeder, packers and retailers.”