I am going to start posting a cattle report for our cattle producers. Most of you probably know how the cattle market works but for some of you newer producers, I am going to give a watered down version of how the market works. There are two classes of cattle on the Chicago Mercantile Exchange (CME), Live cattle (Fats) and Feeder cattle (Feeders). Live Cattle are fat cattle that are 1200 pounds and are ready to be slaughtered. In the Southeast, we usually don’t pay much attention to Live Cattle because the majority of our calves sold are not ready to be slaughtered. Feeder Cattle are classified as weighing 750 pounds and are cattle that are entering the feedyard. Feeder futures are what we pay attention to in the Southeast. While this price doesn’t directly represent the prices at our local stockyards, the movement of this number can indicate movement in price at our local sale barns. Prices listed on CME are per hundredweight (hwt). Therefore August 2019 Feeders are at $133, that is $133 for every hundred pounds of calf or $1.33 per pound.
Feeders: The late corn plantings and lower corn acres in the Midwest have pushed corn futures prices higher. Higher corn usually results in lower cattle prices. We are starting to see some of that finally reaching the Southeast. Overall reports show steer and heifers are a steady $2 lower across the state than compared to last week. Chicago Mercantile Exchange (CME) posted triple-digit losses last Thursday and Friday on feeders. There is usually a decline in the summer, largely due to the heat and how it affects cattle. Also with corn pushing higher, feed rations may start incorporating cheaper feeds such as wheat or sorghum. The current feeding prices are showing breakevens in the negative.
Cows/Bulls: Cows were up and down a few dollars across the state but no major swings. Replacements were a steady $2-3 higher. The rains have allowed some people to keep their cows on the farm instead of having to sell them due to lack of feed.
Overall: Still unsure of how the African Swine Flu (ASF) will play out concerning our exports. I look for beef exports to increase slightly. I have heard reports of China heavily culling their dairy herds to add some meat back to into the food chain. Vietnam has culled 2 million head of hogs because of ASF. Reports show that ASF is only 40 miles from Thailand’s 7 million hog herd.