The Farmer's Weblog
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Friday, April 4, 2003 |
In spring a cattle producer?s fancy turns to grass cattle and this year is no exception. Prices for light weight feeder steers suitable for placement on grass have increased about 7% since late February. Weekly prices for 500-600 pound steers at four major Kansas auctions averaged $98.43 per cwt. the last week of March, up from $91.58 in late February. Seasonal demand for grass cattle generally pushes light weight cattle prices to a peak in April or, occasionally, early May. So, the strongest light weight steer and heifer prices of the year are expected over the next month. If slaughter cattle prices remain strong as expected, look for weekly average prices to top out near $100 before declining seasonally in May and June.
Budget projections for a full season grazing program indicate that a 550 pound steer calf purchased near last week?s average price ($98/cwt.) and placed May 1 on a Flint Hills pasture for grazing until October 1 will likely have a breakeven in the mid-$80?s, if marketed weighing about 790 pounds. The same steer placed on an early-intensive grazing program, marketed in mid-July weighing about 730 pounds, will likely have an expected breakeven that is about $2 to $3 per cwt. higher than the heavier full season steer.
Recent futures prices for both summer and fall suggest cash prices could be somewhat below calculated breakevens as futures traders continue to focus on uncertainty about both future beef supplies and demand. So, risk management options for buyers of grazing cattle this spring appear to be limited primarily to option based strategies.
8:26:21 PM 
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