There appears to be good news for fed cattle prices on the horizon.
Andrew Griffith, Extension ag economist with the University of Tennessee, said live cattle futures topped $111 for the expiring October contract late the week of Oct. 21, with December futures prices above $114 per hundredweight.
“The better news is the February live cattle contract which is trading over $120,” he wrote in his weekly market outlook. “Note to cattle feeders — better closeouts are coming down the line, and they will be here soon.”
The five-area weighted average prices through Oct. 24 were $109.95 live, down $1.01 from the last week, and $174.88 dressed, down $2.38 from a week ago. A year ago, prices were $111.25 live and $175.06 dressed.
Griffith says cattle in Tennessee and other regions of the country were on the move last week, with over 10,000 feeder cattle sold at auction in Tennessee.
“This is a trend that is likely to be maintained until the week of Thanksgiving, barring any extreme rainfall events that keep trucks and trailers out of the field,” he said. “Prices for freshly weaned calves may suffer the next several weeks if the total number of head being marketed remains elevated.
“The large swings in temperature this time of year result in high-risk cattle if they have not been weaned and vaccinated. The increased risk of morbidity and mortality force cattle buyers to lower their bids to account for the additional veterinary cost and death loss.”
Most regions also report continued forage availability, he said.
“It may be too late in the fall to reap the full benefits of the rain as it relates to cool season forage growth, but it does bring optimism to the market which may result in some buyers remaining active in the market,” Griffith said.
“Most producers have already made the decision to either sell calves straight off the cow or to precondition calves the next couple of months. The results of which was the best decision from a profit standpoint will not be known until the beginning of 2020.”
The USDA’s Cattle on Feed report indicated the inventory was down 1.1% from a year ago in feedlots with a capacity of 1,000 head or more.
September placements were up 2%, while September marketings were up 1.1% from 2018.