Difficulty in transporting cattle has bumped up cash prices over the past couple of weeks.
Andrew Griffith, Extension ag economist with the University of Tennessee, says bad weather in much of the U.S. has kept marketings at a modest pace.
This is expected to change soon, he says.
“Many parts of the country will experience improving conditions which may result in a strong run of calves,” Griffith says.
Calf prices continue to move upward, following the normal seasonal trends.
“However, the calf market may be under-performing because of the failure of the feeder cattle market to make any advances,” Griffith writes in his weekly market outlook. “The feeder cattle market has been sluggish for five months and has failed to gain any traction despite the strong finished cattle market.”
He says the price spread for 700- to 800-pound feeder steers and fed steers is $17.66 per hundredweight in the southern plains, or just over $9 lower than the five-year average spread over the same 10-week period.
“This means 750-pound steers are being undervalued by $69 per head compared to the five-year average feeder steer and fed steer price spread,” Griffith says. “As stocker and backgrounding margins continue being pinched, these operations are forced to pay less for calves to alleviate some of the difference.
“When feeding pens dry and the weather moderates, feedlots will become hungry for feeder cattle and the calf and feeder cattle markets will likely change without the fed cattle market ever having to move.”
The five-area weighted average prices through March 14 were $126.98/cwt. live, down $1.12 from the previous week.
“This week was another tough week across much of cattle feeding country as the weather pattern provided no relief in the form of rain, snow and cold,” Griffith says. However, the future is looking brighter and warmer with spring around the corner.
“Cattle feeders are sure to be disappointed with lower prices on finished cattle this week, but poor feedlot performance may be a larger cost than the price decline.”