Cow-Calf Returns Adjust to Late Planting Corn Impact

A tractor planting crops in a field. ( Daniel Acker, Bloomberg )

With corn prices moving higher, the Livestock Marketing Information Center (LMIC) adjusted cow-calf returns to reflect lower calf prices. Previously, cow-calf returns were expected to be positive in 2019 and 2020.  That picture has shifted substantially.  Calf prices were raised across the board to reflect season average corn prices in the mid-$4 per bushel.  Steer and heifer calf prices are now expected to fall by about 3% in 2019 relative to last year, equivalent to taking between $4-$7 per cwt out of 500-600 pound calf prices in the Southern Plains.  Cull cow prices are still expected to move higher in 2019 by about 8.6%, averaging under $60 per cwt in the southern plains. The dramatic change in corn over this planting season resulted in LMIC forecast of cow-calf returns changing expectations from a gain of $27 per cow to a loss of $14 per cow. This is similar to the returns seen in 2018. 

Adjustments were made to 2020 figures as well.  Cow-calf returns were lowered by about $13 per head but are still expected to be positive in 2020.  LMIC lowered calf prices in the first half of next year, reflecting the long tail in the corn market.  LMIC is expecting a substantial rebound in the cull cow price as both beef and dairy cow slaughter is expected to pull back by 2020.  Cow-calf returns in 2020 are penciling out to be the best returns in several years by 2020.