Corbitt Wall, USDA  |   September 23, 2011

Compared to last week, feeder cattle and calf prices were very uneven and very regionalized with the only consistency being that Thursday’s collapse of commodity markets from global economy concerns definitely pressured cash prices.  Optimism for the long term future of commercial cattle production sparred with near term pressure over current on-feed inventories, continuing drought struggles, and health issues with changing weather patterns to result in wide price trend spreads. 

Demand ranged from very light on unweaned small packages in the Midwest to very good for weaned strings of reputation and health programmed calves in the Southern Plains and load lots of true yearling cattle near farmer/feeder interests.  The Deep South saw their lightweight calf market continue to diminish as western backgrounders with the best ability to straighten-out these mostly mismanaged crossbreds are currently busy caring for displaced calves from their own region.  However, calf markets closer to the Mississippi River Valley saw a rebound in prices with help from local interests that have recently received much-needed rain and perked-up pastures. 

Yearling trade in close proximity to major feedlot areas realized modest gains as cattle feeders would like to fill any empty pens with some highly efficient placements to offset the long alleys of displaced calves that are wearing on their cost-of-gain average.  Meanwhile, independent farmer feeders from the Midwest are craving some problem-free Northern quality yearlings for their damaged corn.  Bidders in Bassett, NE on Wednesday pushed nearly 1000 head of top notch 9 weight steers to average 936 lbs at 130.71.  Basically, backgrounders and feeders are still bullish on their chosen profession but are impatiently waiting for lighter numbers to emerge from this year’s unprecedented drought and herd sell-off. 

Severe discounts were imposed on unweaned offerings, but buyers may argue that these tender hypochondriacs consistently outsell the balance of the cattle after labor, medicine, and death loss are figured in.  The annual sickening of the spring born calf is in full swing as producers are struggling with temperature swings and disease even on cattle they thought they had straightened out and calves still on the cow.  Feedlot managers are still shaking their head over the loss of their late summer fed market rally and the disappointing fat cattle trade that stretched out over the last two weeks.  It seemed as though 120.00 was well within their grasp when suddenly they found themselves scrambling for 116.00 on a Monday morning, while the hard-nosed holdouts settled for much the same later in the week. 

Friday’s cattle-on-feed report initially looked bullish for the feeder cattle market with all three categories falling on the kind side of cattlemen and analysts overshooting the August placements by more than 8 percent.  September 1st inventories were estimated at 105.3 percent of last year, while new cattle going into the feedlot and those marketed in August were 99.2 and 106.5 percent of 2010, respectively.  It appears that the mass exodus of cattle off drought pastures was mostly completed in June and July and these inexplicably huge numbers of cattle may yet run out.  This week’s reported auction volume had 43 percent over 600 lbs and 42 percent heifers.