New Record High Cattle Prices

The fed cattle market hit some new record highs last week with fed steers pushing $200 per cwt in Northern Plains markets.  The weekly average fed steer price for the week ending June 30th was $198.09 per cwt.  This price represented a negotiated, live, weighted average price across quality grades.  The comparable price in the Texas-Oklahoma market last week was lower at $190.19 per cwt.  

Beyond the record high fed cattle price, the widening price difference between the Southern and Northern fed cattle markets is very interesting.  Last week’s Northern-Southern price spread was $7.90 per cwt.  It was $10.11 per cwt two weeks ago, the largest difference of the year.  This large price spread has really developed over the last couple of years.  The price difference has a large seasonal component with the price difference peaking in the May-July time period.  Prior to 2022, a price difference greater than $4 per cwt was rare.  The average price difference from 2015 through 2021 was $0.20 per cwt.  That average has grown to $0.96 during 2022-2024.  The range of price differences has grown from about $6 per cwt to over $12 per cwt.

Several factors likely contribute to larger swings in regional price differences.  One may be simply varying relative supplies versus packer needs in each region.  Another contributor is the mathematical calculation of the average price across grades.  The Southern Plains average price includes head in lots 35-65 percent Choice compared to no lots with cattle in that category for the Nebraska prices which pulls down the Texas-Oklahoma average price.  So, there may be a USDA quality grade component to the price difference.  

Record high fed cattle prices are supporting calf and feeder prices across the South.  As fed cattle supplies further tighten, new record high prices will be recorded.  The widening price difference regionally in fed cattle may have some implications for Southern feeder cattle and calf markets.  Many of our cattle in the mid-South go to feedlots in Nebraska while feeders from the deep South often head to Texas or Oklahoma yards.  Regional calf and feeder prices may begin to be affected by changing premiums in the regional fed market.

Anderson, David. “New Record High Cattle Prices.Southern Ag Today 4(27.2). July 2, 2024. Permalink