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Cattle prices weakening as a result of slower fed cattle marketings

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Source: AgriLife Today

Beef producers should brace for lower prices in the near term as feedlot marketing of cattle slowed during August through September.

Stan Bevers provides a cattle market update at the recent Rebuilding the Beef Herd program at Camp Cooley Ranch in Franklin. Texas A&M AgriLife Extension Service photo by Blair Fannin

Stan Bevers provides a cattle market update at the recent Rebuilding the Beef Herd program at Camp Cooley Ranch in Franklin. Texas A&M AgriLife Extension Service photo by Blair Fannin

Stan Bevers, a Texas A&M AgriLife Extension Service economist in Vernon, gave a  overview of the cattle market heading into 2016 at a Rebuilding the Beef Herd program held recently at Camp Cooley Ranch in Franklin.

Bevers said feedlot operators paid higher prices for feeders going into the feedlots earlier in the year and, due to falling live cattle prices, are choosing to put more gain on them rather than buying new feeder cattle with negative breakevens.

“Cattle are staying longer in the feedlot,” Bevers said. “Typically, they stay 120 days. Now it’s 180 days and in some cases, 250 days. The cost of gain is relatively cheap. Feeder prices were well over $2 back in March, so feedlots are looking to feed them a little longer, get them bigger and avoid taking a $200 a head loss.”

r. Ron Gill, Texas A&M AgriLife Extension Service beef cattle specialist and associate department head for animal science at Texas A&M University, discusses chute side manners. Texas A&M AgriLife Extension photo by Blair Fannin

Dr. Ron Gill  discusses chute side manners. Texas A&M AgriLife Extension photo by Blair Fannin

On average, slaughter weights have been  1,360 pounds, but Bevers said there are reports of slaughter weights in the 1,700-pound range.

“As a result, beef tonnage is going up with these heavier weights,” Bevers said. “We’ve got about two more weeks of these big cattle. In the long term, we will likely see things ratcheting lower.”

The calf market has reacted with lower prices. Bevers said 450-pound calves that were selling for $1,250 earlier this year are now bringing $1,000.

Bevers said fed cattle could get back to the $1.45 a pound range, but not eclipse $1.60.

“What drives these prices is how much beef production we have in this country along with how much the consumer is willing to purchase,” he said.

Dr. Rick Machen, Texas A&M AgriLife Extension Service livestock specialist, Uvalde, discusses how to use hay sampling with a probe to determine crude protein percentages. Texas A&M AgriLife Extension Service photo by Blair Fannin

Dr. Rick Machen discusses how to use hay sampling with a probe to determine crude protein percentages. Texas A&M AgriLife Extension Service photo by Blair Fannin

Recent U.S. Department of Agriculture reports suggest cattle herd rebuilding is underway. By 2016, Bevers said it is projected there will be approximately 31 million head of beef cows.

“Overall, you should prepare for lower prices,” Bevers said.

Boxed beef prices that were $265 in May are now $215 as  a result of heavier weight fed cattle hitting the market and increasing tonnage, he said.

“It’s not just an increase in the numbers of cattle being slaughtered, but also because of the heavier weights,” he said.

Low gasoline prices have helped consumers continue to make beef purchases despite record-high retail prices, he said. Six months ago, ground beef prices were $5.50-$6 a pound.

“Energy prices have helped prevent consumers from turning away from beef,” Bevers said. “Cheaper gasoline has really helped with this high-priced beef environment.”

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Farm & Ranch

Ag Elsewhere: Wyoming

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By Tressa Lawrence

Despite some blue skies, March can still bring sub-zero temperatures to Wyoming as calves hit the ground.

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Farm & Ranch

Ag Elsewhere: Montana

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By Lindsey Monk

Welding on some corrals before dark. It’s been a mild winter in Montana so far, knock on wood.

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Farm & Ranch

Land Market Report: January Land Sales

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By Jared Groce

The rural land market in North Texas has had a fairly stale start to the year, with the number of transactions closed being minimal so far. There has been an increase in call volume from buyers, and some are turning into contracts, but I feel like we are still a little slower than we usually are at this time of the year. The “experts” are expecting fewer transactions in 2024 as compared to 2023, and they may be correct, because election years always seem to be slower. Once the election is over, and regardless of who wins, things seem to pick up once again. It is a strange phenomena that just seems to happen every four years.

With the amount of growth that we are currently experiencing here, I do not expect things to get any cheaper. More people means more houses, and they have to have land to build those houses on.

To read more, pick up a copy of the March issue of NTFR magazine. To subscribe by mail, call 940-872-5922.

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