The autumn run of calves is underway for the Nice Plains and mountain states. Worth reporting for feeder cattle and calves are quite skinny – particularly in Colorado – by means of the summers and the previous three weeks have revealed extra substantial numbers of transactions. A counter seasonal rally in feeders occurred from Could by means of August however the current $1 plus per bushel improve within the harvest corn contract worth has stopped this.
It will likely be attention-grabbing to speak to producers and lenders throughout the remainder of the 12 months relating to LRP technique. The story about insurance coverage bought within the late spring and early summer season will likely be quite totally different that bought within the early spring when the feeder cattle market was transferring larger. Promote hedges when the market is underneath duress are routinely disappointing.
Feeder markets from Colorado, Wyoming, Montana and Utah are all exhibiting sturdy costs. Down from the value peaks in mid-July – if there was commerce then – however good demand, sturdy curiosity, and costs between the high-$170s and mid-$180s for 6-7 cwt steers. Heifers are usually $10 again from the steer worth.
Calve and feeder cattle costs in Nebraska and Missouri are stronger but bringing from high-$180s to mid-$200 once more for 6-7 cwt steers. 4 cwt calves in lots of areas have introduced higher than $2 per pound for a lot of 2022 however now steers weight 6 cwt or higher are bringing this worth.
The underlying basket of fundamentals talked about a lot of this summer season stay sturdy. Packer and retail margins, and beef demand, stay sturdy. Pink meat particularly and protein on the whole have ample provides and excessive values. Worldwide commerce is necessary however not the primary driver – it seems to be the home shopper. Dialogue of inflation and financial sluggish downs are troublesome however the unemployment quantity disagrees.
Whereas the information and market situations seem bullish, I’m much less optimistic by means of October. On-feed numbers are seasonally excessive and long-fed inventories stay ample. The primary a part of the fourth quarter has to content material with giant numbers and a number of the heaviest carcass weights. Substitute pink meat manufacturing can be the strongest within the fourth quarter.
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