The Cattle Business
Livestock Update, December 1996
Bill McKinnon, Animal and Poultry Sciences
It was a tough fall for marketing feeder cattle, especially for the cow/calf producer. Early uncertainty of the final size of the corn crop coupled with extremely limited corn carryover stocks kept the projected costs of gain historically high well into the fall. Enthusiasm was restrained on the part of buyers who backgrounded or finished last fall's feeder cattle crop and lost big dollars. Many of these were enticed into the market only when prices looked too cheap to pass up. Additionally, the heifer market found almost no support from folks wanting to make additional momma cows.
As we examine the September through mid-November series of special feeder cattle sales, a couple of interesting points emerge. Fueled by relatively high costs of gain and reduced local interest on the part of backgrounders, there was little difference in the price per pound as feeder cattle became heavier. At times this fall, light weight heifers had a hard time finding a new home. The table below illustrates weighted average prices for L1 and M1 feeders sold through the special graded sales this fall.
Table 1. Fall 1996 Special Sales Average Prices September through Mid-November L1 & M1
|400-499 lb.||$62.42||400-499 lb.||$46.85|
|500-599 lb.||$60.76||500-599 lb.||$47.82|
|600-699 lb.||$59.18||600-699 lb.||$49.39|
|700-799 lb.||$59.33||700-799 lb.||$52.02|
|800-899 lb.||$59.33||800-899 lb.||$51.64|
The above table illustrates that the 6-weight through 8-weight steers sold for the same money. The heifers were worth more as they got heavier. It was almost unreal how easy it was to market 8-weight heifers as compared to earlier years.
If we look at the range of prices within this fall, we again find that the going gets sticky during the second to fourth week of October. This is a fairly normal situation in Virginia almost every fall. It is probably a combination of several factors: 1) Normal October frosts bringing large numbers to town both in special sales and weekly auctions; 2) The critical shortage of trucks to haul cattle to their new homes: 3) Buyers who purchased calves the previous two to three weeks, are up to the belt buckle in sick calves and do not want to add to their pleasure. What ever the cause, we see the phenomenon again this fall though not as severe as in earlier years.
The telo-auction field sales continues to shine as an effective method of marketing bigger strings of feeder cattle at higher net prices. This is particularly true with yearling heifers. Many of the heifers marketed via teloauction are sold "guaranteed open" by the seller. Table 3. compares cattle sold through the teloauction versus similar weight L1 and M1 cattle sold through special sales during the same week this fall.
Table 3. Fall 1996 Teloauction Feeder Cattle Sales Price Advantage Over In-barn Special Sales (L1 & M1)
|600-699 lb.||+$1.94||600-699 lb||+$6.45|
|700-799 lb.||+$1.32||700-799 lb||+$5.12|
|800-899 lb.||+$ .89||800-899 lb.||+$6.85|