Better grazing improves feeder prices

"Feeder cattle cash and futures prices recovered significantly in the last half of November and early December, said Kansas State University agricultural economist James Mintert. "The improvement in calf prices was dramatic."

Mintert, who is the livestock marketing specialist with K-State Research and Extension, cited prices for 500- to 600-pound steers at Dodge City, which climbed from the upper $80-per-hundredweight [cwt] level in mid-November to the upper $90s by early December. The rain was particularly helpful in Oklahoma, he said. However, further strength in the feeder market is unlikely until slaughter cattle prices show definitive signs of recovering, Mintert added.

Although they recovered slightly in recent weeks, slaughter cattle prices took an unusual drop this fall, with mid-December values down 20% from year-earlier levels.

Mintert attributed the price slide to weaker demand for beef--both domestically and overseas--and to record-heavy slaughter cattle weights.

"As a result [of the slaughter cattle price influence on feeder cattle values], look for heavy feeders to trade sideways the rest of the fall and early winter. Calf prices could weaken as wheat pasture demand wanes, but higher prices in late winter and spring are expected if slaughter cattle prices recover as expected," he added.