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Ruth Correll: Cattle market outlook for the new year

Ruth Correll • Updated Dec 26, 2017 at 10:45 PM

A phone call could save producers time, effort and a few dollars this holiday season. It is traditional for cattle sales to slow down around Christmas and New Year’s. The slowdown in cattle movement includes local livestock markets, meaning some livestock markets may be closed on regular business days around the upcoming holidays. 

The following market insights and predications came from Dr. Andrew Griffith, UT Extension marketing specialist. 

Lightweight steer and heifer – 300 to 600 pounds – prices normally are on the rise through March and early April, and stay fairly strong through early to mid-May. Prices for 600 to 800 pound steers and heifers make most of their upward price movement from March to May and then are normally strong and steady through early August, when they are likely to start tapering off the remainder of the year.

Cull cows are expected to find some price support in February and will generally continue to improve into May and early June before prices start to experience some resistance.

Feeder cattle futures have been trading in less than a $4 range for eight consecutive days on the January contract. The tight trading range may signify a number of situations considering the decline in prices since the beginning of November. January feeder cattle futures have declined nearly $15 in a month and a half. This downward price movement has most likely been a result of following the live cattle market. 

Feeder cattle cash prices in the country have softened during the same time period the feeder cattle futures have softened, but cash prices have not declined as quickly or to the same extent as futures. This seems to be a case where fundamental cattle trade and technical trade do not align. 

Another thing to watch is a drought situation that has been slowly creeping into the Southern Plains and the Southeast. The drought area continues to carry into the Northern Plains and Montana. The drought situation that has overcome much of cow-calf and stocker grazing country is forcing producers into tough situations. Many stocker cattle are purchased based on currently available forage and expected forage. The currently available forage is beginning to wane and the expectation of forage is near zero if precipitation does not fall in the near term. 

This will continue to result in softer calf prices as feedlots fill pens with cattle that may have to come off winter annuals earlier than expected. Similarly, many of the stocker producers in the Southern Plains will not be active in purchasing calves due to reduced forage production. The market and Mother Nature are working against cattle producers at this time. A good rain or two could alleviate much of the dis-tress.

For more information, contact the UT-TSU Extension Office in Wilson County at 615-444-9584. You can also find us on Facebook or visit extension.tennessee.edu/wilson. Ruth Correll, UT Extension-TSU Cooperative Extension agent for Wilson County, may be reached at 615-444-9584 or [email protected]

 

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