Fed Prices Leading Cattle Markets to Record Levels

Cash fed cattle prices hit new record highs last week.
Cash fed cattle prices hit new record highs last week.
(CAB)

The daily 5-Market negotiated cash fed cattle price reported on Thursday, April 6, 2023, by the USDA Agricultural Marketing Service, was $172.33/cwt., a new record daily fed cattle price.  This was followed on Friday with a price of $175.87/cwt.  The previous record daily price was $172.08/cwt. on November 26, 2014. 

Where do fed prices go from here?  In a steady market, fed prices would typically peak seasonally about now and move lower through the third quarter before increasing to the end of the year.  This sort of typical pattern is currently priced into the Live Futures with futures prices decreasing from the nearby April (currently just over $171/cwt.) to June (about $163/cwt.) and August ($162/cwt.) before increasing in the October contract ($166/cwt.) and December ($171/cwt.).  At this time, Live Futures prices do not exceed nearby levels until the February 2024 contract (currently $174/cwt.). 

Will fed prices follow this typical seasonal pattern this year?  Figure 1 suggests maybe not.  In 2021 and 2022, the strong uptrend in fed prices offset seasonal tendencies, with prices moving continually higher.  There is good reason to expect the uptrend to continue in 2023. The seasonality priced into the markets now may fade as markets trend higher going forward. 

 Feedlot inventories are just beginning to fall with ever tighter feeder cattle supplies and are likely to continue decreasing at least through 2023, pushing fed prices higher.  Fed prices may increase more slowly or plateau briefly in the summer months but are not likely to have a typical seasonal decline going forward.     Fed prices

Feeder cattle prices have not yet reached record levels but are advancing to surpass previous price peaks.  Oklahoma combined auction prices for 500–550-pound, Medium/Large No. 1 steer prices for the week ending April 7 were $251.41/cwt., the highest price since August 2015.  The record price for this weight group was $306.42/cwt. on December 12, 2014.  For the heavier feeder cattle, 800-850-pound steer prices averaged $189.53/cwt., the highest price since October 23, 2015.  The highest previous price for these steers was $238.87/cwt. on October 10, 2014.  Feeder cattle prices are currently about 80 percent of the record price levels in late 2014 and will undoubtedly exceed previous high prices at some point in the coming months.    

 

 

Latest News

AFIA Objects to EPA’s Draft Risk Evaluation of Formaldehyde
AFIA Objects to EPA’s Draft Risk Evaluation of Formaldehyde

The American Feed Industry Association says formaldehyde has been "safely used in the U.S. animal food industry for over 40 years via accurate automated equipment."

Power of Meat Reports Strong Meat Consumption, Evolving Consumer Trends
Power of Meat Reports Strong Meat Consumption, Evolving Consumer Trends

The Meat Institute and FMI-The Food Industry Association released the 19th annual Power of Meat report.

Cattle Imports from Mexico
Cattle Imports from Mexico

Mexico has become one of the major beef import sources for the U.S. as beef trade evolved from simply supplementing deficit beef production in Mexico to bilateral, product specific trade between the two countries.

Markets: Cash Cattle Markets Nearing Historic Highs
Markets: Cash Cattle Markets Nearing Historic Highs

All classes of cattle sold at higher prices for the week and most are at or near record highs. Supplies of all classes remain extremely tight.

International Genetic Solutions Debuts New Informational Resource
International Genetic Solutions Debuts New Informational Resource

International Genetic Solutions (IGS) recently unveiled a new information resource and video platform for important beef industry topics pertinent to producers’ bottom lines.

Sage_Grouse_Booming
Ranchers Urge BLM to Incorporate Latest Science in New Sage Grouse Plans

NCBA and PLC are requesting that BLM significantly extend the comment period deadlines while ranchers and other local stakeholders evaluate these lengthy proposals.