Cow-Calf Producers Remain in Driver's Seat

Since the beginning of the year the cash cattle market has been hitting new all-time record highs. While it has been met with a positive buzz throughout the industry, it is not unexpected.

Kevin Good - an analyst with CattleFax - says a combination of factors continue to add optimism to the cattle market.

Good: "It is accumulation of a lot of things but I think that bottom line is you go back and look at the placement pattern we had in last summer and early fall. In our data we placed 10 to 15 percent less cattle against both the December and January. So that's what you've got right here is just a kind of a feeding frenzy from the end user side to get as many cattle around them as possible. Just noting that the short-term fed cattle supplies are going to be very tight."

No one would deny that a return to normal corn prices has also played in

Good: "There is no doubt as we look at it today versus a year ago you've got over a $3 of relief in the value on a bushel of corn. So you kind of do a rough rule of thumb there -- if you put 60 bushels of corn through a fed steer or heifer, that's a $180 savings. If you want to spread that over a 7 and half weight yearling -- that's $24 a hundred weight. Or if you want to spread it over a 5 weight calf -- that's about $36 an hundred weight. So it adds a lot of value to that calf and yearling segment. For the cow-calf producer I think the short intermediate future looks rosy."