In The Cattle Markets: Cattle Market Blues

US - Memphis kicked off its music festival this weekend and few agricultural producers are singing the blues like those in the cattle industry, write Dr John Michael Riley (Assistant Extension Professor, Department of Agricultural Economics, Mississippi State University) and Dr John D. Anderson, Livestock Economist at the American Farm Bureau Federation.
calendar icon 3 May 2011
clock icon 3 minute read

You have seen cattle prices struggle during much of April and last weeks’ reports from USDA did not help matters.

Cattle on Feed and Cold Storage were released last Thursday and both showed higher year-over-year supplies of cattle and frozen beef, respectively. Cattle in feedlots totaled 11.277 million head, which was 5.0 per cent higher than 2010 but slightly lower than the average of analysts’ expectations. Placements of cattle into feedlots and marketings during March were both higher than 2010; however, both were better than expected. Beef in storage was 16.7 per cent above 2010. Both the February and March beef cold storage number was the highest since the series began for their respective months.

Also, from the on feed report, it was revealed that placements of cattle over 800 pounds were 21.6 per cent above 2010 and 8.7 per cent higher than the prior five-year average. Referring back to January’s on feed report when placements of cattle less than 600 pounds were 17.7 per cent and 14.8 per cent above 2010 and the prior five-year average, respectively, indicates a lot of cattle will likely be ready in the mid- to late-summer months. As a result, those futures contract prices took the brunt of the pressure following Thursday’s release.

Adding further pressure to the cattle market was Monday’s Crop Progress report, which solidified concerns of planting troubles for corn. National plantings are at 9 per cent complete versus a prior five-year average of 23 per cent. The dominant players – Illinois, Indiana, Iowa and Nebraska – were 17, 13, 25, and 10 percentage points behind their respective average. Corn stocks and stocks versus use are at extremely low levels causing prices to remain high and volatile.

Finally, beef demand remains uncertain. With higher fuel prices in the works and as food prices climb, consumers will be forced to make penny-pinching decisions across all spending categories. Research has shown that retail beef price increases have a greater impact on beef demand than pork or poultry retail price increases have on their demand. So, all else equal, as prices at the meat case go up consumers are more likely to abandon beef.

  Cattle or Meat Category Week of 4/22/11 Week of 04/15/11 Week of 04/23/10 % Chg Prev. Week % Chg Prev. Year Chg Prev. Week
5-Area Fed Steer Price all grades, live weight, $/cwt

all grades, dressed weight, $/cwt






Boxed Beef Choice Price, 600-900 lb., $/cwt

Choice-Select Spread, $/cwt






700-800 lb. Feeder Steer Price Montana 3-market average, $/cwt

Nebraska 7-market average, $/cwt

Oklahoma 8-market average, $/cwt












500-600 lb. Feeder Steer Price Montana 3-market average, $/cwt

Nebraska 7-market average, $/cwt,

Oklahoma 8-market average, $/cwt












Feed Grains Corn, Omaha, NE, $/bu (Thursday)
DDGS Price, Nebraska, $/ton

WDGS Price, Nebraska, $/ton













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