Cattle Market Snapshot

Each quarter, Northwest Farm Credit Services updates more than 15 different commodities through their Market Snapshots. Northwest FCS Vice President of Market Research and Development Michael Stolp shares details from the second quarter results of the beef cattle Market Snapshot.?
Stolp: “Cattle markets face mixed signals. Although record-low cattle inventories position the industry for strong cattle and beef prices, falling prices for competing proteins, lackluster demand for beef, and a largely unprofitable feedlot sector are pressuring cattle prices lower. Unlike prior years, feeder cattle prices didn’t rally between January and April. Cash prices fell an average of eight percent between January and May as feedlots continued to struggle with high priced corn. The large corn crop expected for 2013 should reduce feed costs and support rising feeder cattle prices. Most cow/calf and stocker operations remain profitable. Montana pasture conditions significantly improved due to much needed rains. Areas of Idaho and Oregon continue to struggle with dry conditions that will limit herd expansion and impact profits.”
The snapshot provides additional information: Despite falling prices for competing proteins, domestic retail beef prices are expected to continue to climb. However, feedlots remain largely unprofitable, struggling with limited supplies of high priced feed. Consequently, feedlot demand for replacement feeder cattle is limited. On a positive note for cow/calf operators, CattleFax reports feedlot placements for May averaged 745 pounds, 22 pounds heavier than one year ago and the highest average placement weight since 2004. Heavier cattle should finish faster this summer, raising demand for feeder cattle later this summer.