The feeder cattle market has actually flexed its muscle mass as we now have moved via summer season. The October CME© feeder cattle futures contract has elevated by greater than $10 per cwt since Could and this will been seen out there for heavy feeder cattle. Heavy feeders usually make their highs round this time of yr, however calf markets are growing counter-seasonally. A powerful calf market going into fall is an efficient signal for cow-calf operators that calve within the spring and will probably be advertising and marketing calves within the coming months. The chart beneath reveals steer calf costs within the Southern Plains, which have been growing via July and August.
It’s changing into extra obvious that the availability of calves goes to be very tight this fall. Beef cow slaughter ranges have been mentioned a number of instances on this publication and stay 14% above 2021 ranges. Final week, Josh wrote about excessive placement ranges of sunshine weight feeders, which has been one other development because of dry situations in a lot of the nation. Given the continued discount within the dimension of the meat cow herd, this was more likely to be a smaller fall calf run had climate not been a problem. However, when combining that with the drought implications, fundamentals are establishing for a vendor’s marketplace for feeder calves.
I additionally needed to take a fast take a look at beef export ranges as these haven’t gotten quite a lot of consideration in latest months (see chart beneath). By the primary six months of 2022, beef exports have been 7% greater than final yr. Additionally keep in mind that 2021 was a document yr for US beef exports. At first of 2022, most anticipated beef export ranges to say no, largely because of an anticipated lower in beef manufacturing. Nonetheless, the mix of excessive cow slaughter and early placement of cattle on feed, has stored beef manufacturing greater than anticipated. Whereas exports are anticipated to gradual within the 4th quarter as beef manufacturing decreases, it does seem seemingly {that a} new document for beef exports will probably be set in 2022.
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