As we approach the fall months, folks in the cattle industry might expect to see some weakness in cattle prices as many producers sell their spring born calves. However, 2023 could shape up to be one of the abnormal years when the broader upswing in prices outweighs the typical seasonal pressure.
The chart above uses monthly average prices for 500-600 pound medium and large #1 steers sold at auctions in Texas. The lines for 2014, 2015, and 2023 use the left axis and are dollars per hundredweight. The solid black line with markers represents the 10-year average monthly index values from 2013-2022 and uses the right axis. Without getting too deep into the details, this index calculation is one way to visualize seasonal patterns. An index value of 96 (October) means that during 2013-2022, prices were 4 percent lower than the annual average. Similarly, an index value of 103 (March) means prices were 3 percent higher than the annual average.
As the chart shows, normal seasonal patterns would suggest falling prices for the next few months for 5 weight cattle. But 2023 has been anything but normal. History shows us years when prices seem to mostly ignore within-year seasonal patterns because of broader uptrends or downtrends in prices. 2014 is an example year when prices rose throughout the year and overshadowed seasonal patterns. 2015 is an example of a market downtrend that concealed seasonal patterns,
So far in 2023, this year has been more similar to 2014 with prices rising steadily throughout the year. Instead of the typical dip from March-May, prices rose in 2014 and 2023. This could well be the story this fall too as overall strength in cattle markets (and tighter supplies) outweighs the within-year seasonal patterns we might expect.
Maples, Josh. “Counter Seasonal Runs in Cattle Prices.” Southern Ag Today 3(32.2). August 8, 2023. Permalink
