Calf prices bounced around in the first month of the year, but they rebounded significantly higher in the last couple of weeks. Higher fed cattle prices, hitting $160 per cwt last week, and tighter supplies of calves and feeders are fueling this price run.
In the Southern Plains, 5-600 pound steers have increased from $203 per cwt to $214 in the last two weeks. During the same period, the same weight calves in Georgia bounced from $181 to $188 per cwt. Heavier feeders, (7-800 pounds) saw more modest gains in the Southern Plains, up about $4 per cwt to $182. In Georgia, those heavier calves actually dropped about $2 per cwt to $163. Calf prices tend to be lower the further South and East from feedlots in the Plains and Corn Belt. Prices in both the Plains and Georgia were about $26 per cwt higher than last year.
Fed cattle prices hit $160 in several markets last week. Higher prices for fed cattle certainly boosted calf prices. Fewer available feeder cattle are also working to boost prices. Calculating feeder cattle supplies from information in USDA’s cattle inventory report indicated that 25.3 million head were outside of feedlots, about 270,000 head fewer than the prior year. That is the fewest since the 24.6 million available in 2015.
Tight supplies of calves will keep prices higher than a year ago. But, there is likely to be some volatility as feed prices and demand for cattle move throughout the year. Prices for lighter weight calves and feeders tend to increase seasonally into March and April. Heavier feeders are often pressured by winter pasture cattle coming to market in the Spring.
Author: David Anderson
Professor and Extension Economist Livestock and Food Products Marketing, Dairy, Policy