FEEDER CATTLE SEASONAL PRICE TRENDS

Dr. Curt LacyExtension Economist-Livestock

Show that cattle prices USUALLY move in a predictable pattern.

Show that the patterns vary with the class of cattle.

Explore the factors that can affect these seasonal trends.

Objectives

Prices Usually Follow Some Predictable Pattern

Jan-73

Jan-75

Jan-77

Jan-79

Jan-81

Jan-83

Jan-85

Jan-87

Jan-89

Jan-91

Jan-93

Jan-95

Jan-97

Jan-99

Jan-01

Jan-03

Jan-05

Jan-07

Jan-09$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

500-600# Steer, GA Auctions

Beef cattle prices usually follow a seasonal trend.

These trends are USUALLY fairly predictable.

We can use these seasonalities to estimate anticipated cash prices: Decide on a future marketing date. Decide if we want to pre-price now. Decide if we want to sell now as opposed to

stockering or feeding.

Using Seasonalities to Market Cattle

1. Seasonal prices2. Buy-sell margin

Two ways to use seasonal information in predicting a price

Dollar values Averages Usually predictable However, major supply or demand

shocks can disrupt these seasonalities.

Seasonal Prices

JAN

APRJU

LOCT

90

100

110

120

130

140

150

MED. & LRG. #1 & 2 STEER CALF PRICES500-600 Pounds, Georgia, Weekly

Avg. 2005-09

2010

2011

$ Per Cwt.

05/02/11Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC

JAN

APRJU

LOCT

70

80

90

100

110

120

130

MED. & LRG. #1 & 2 FEEDER STEER PRICES700-800 Pounds, Georgia, Weekly

Avg. 2005-09

2010

2011

$ Per Cwt.

05/02/11Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC

JAN

APRJU

LOCT

70

80

90

100

110

120

130

MED. & LRG. #1 & 2 FEEDER STEER PRICESVarious Weights

700-800

500-600

400-500

Sltr. Strs

$ Per Cwt.

Livestock Marketing Information CenterData Source: USDA/AMS Different classes have

different seasonalities

Based on averages Not absolute However, the highs and lows tend to

group toward certain months.

Limitations with Seasonals

Jan

FebMar

AprMay

Jun Ju

lAug Sep

OctNov Dec

75

80

85

90

95

100

105

110

115

120

125

MED. & LRG. #1 & 2 STEER CALF PRICES500-600 Pounds, Georgia, Weekly, 2006-2010

2006 2007 20082009 2010 2006-2010 Average

$ Per Cwt.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

500-600 lbs. Str.

1/5 1/5 1/5 3/5 3/5 0/5 1/5 2/5 0/5 1/5 1/5 1/5

700-800 Lbs Str.

1/5 2/5 0/5 1/5 1/5 0/5 4/5 4/5 1/5 0/5 0/5 1/5

Times Average Prices Were in the TOP 1/3 for the Year, 2006-2010

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

500-600 lbs. Str.

3/5 1/5 0/5 0/5 0/5 0/5 0/5 0/5 0/5 4/5 4/5 3/5

700-800 Lbs Str.

2/5 2/5 1/5 0/5 0/5 0/5 0/5 0/5 0/5 3/5 4/5 3/5

Times Average Prices Were in the BOTTOM1/3 for the Year,

2006-2010

Useful in stocker or feeder programs Difference in sales price and purchase

price Usually negative Can be used to estimate expected sales

price Very useful in determining potential

profitability

Buy-Sell Margins

Time of Year is important in BSMFall Stockering

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec$80.00 $85.00 $90.00 $95.00

$100.00 $105.00 $110.00 $115.00 $120.00 $125.00

400-500 700-800

Sell Here

Buy Here

BSM and Change in Value400-500 fall to 700-800 spring

99-00

00-01

01-02

02-03

03-04

04-05

05-06

06-07

07-08

08-09

09-10

10-11

$(35.00)

$(30.00)

$(25.00)

$(20.00)

$(15.00)

$(10.00)

$(5.00)

$-

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

Change in Value BSM

BSM

($/C

wt.

)

Chan

ge in

Val

ue ($

/hd.

)

BSM and Change in ValueRetain 500-550 fall sell 800+ spring

99-00

00-01

01-02

02-03

03-04

04-05

05-06

06-07

07-08

08-09

09-10

10-11

$(25.00)

$(20.00)

$(15.00)

$(10.00)

$(5.00)

$-

$5.00

$10.00

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

Change in Value BSM

BSM

($/C

wt.

)

Chan

ge in

Val

ue ($

/hd.

)

Seasonal information can be very useful in making marketing decisions.

The best or worst time of the year depends on the market class.

Price is just part of profits. Your local market info trumps “state”

info.

Summary

UGA Marketing Alternatives Calculator Buy-Sell Margins Calculator

Additional Resources

www.secattleadvisor.com