Feeder Cattle Prices Explained

Feeder cattle prices decreased due to the rising supply of calves. Typically, the majority of producers across the country sell spring-born calves or yearlings from the last fall.

However, experts are hopeful for a positive return as Brazil (the second-largest cattle producer) will evaluate its livestock farming practices to protect the Amazon forest from further deforestation by reducing its cattle ranching industry. The country reported heavy losses in its beef production due to changing weather systems that affected its cattle inventory. 

Why are feeder cattle prices fluctuating?

1. Feed Grain Price

Cattle farmers know well the idea of feed variation cost.  Feed cost per pound depends on the price of barley or corn each month.

Normally feeds per pound value ranges from $0.85 to $1.20 which includes barley, silage, processing, and yardage. However, small maybe but this is one of the deciding factors in feeder cattle price fluctuations.

2. Breed and Frame Size

These feeder cattle qualities are examined closely by buyers who want to sell premium quality beef meat.

The frame size is a maturity predictor. Upper-medium to lower-large gets the most attention and bid compared to small-framed cattle.

For instance, Angus and Angus-Hereford crossbreed fared well in the market because of their notable long and muscle-structured body capable of producing high marbling content (fat white lines that make the meat even tastier).

Thus, these characteristics greatly affect cow prices in the market.

3. Management Factors

Weight, health, and condition are also the driving factors of cow prices.

Cattle that pass the standard harvesting requirement are sold at premium rates but cattle that appear to be unhealthy, too thin, or too fat are sold at a reasonable price, therefore, dividing the profitability of farmers and the economic gain of consumers.

Which variables impact the price of feeder cattle?

• Feed Grain Price
• Breed and Frame Size
• Management Factors
• Market Demand
• Seasonal Factors
• Marketing Competition

Where does feeder cattle come from?

Feeder cattle origins and domestication started in the Fertile Crescent region in the Middle East around 8,000 BCE. The spawning of cows in the West majorly came from migration in search of better lands for pasture.

The Spanish explorers and settlers introduced cattle in North America (now, the U.S.), and over time it became an integral part of their economy which further solidified the Western United States as the biggest producer today.

Additionally, feeder cattle international trade began in the early 1990s, with the U.S. exporting its first market: Mexico and Canada. In the 1950s and 1960s, the American market expanded its business in Japan and other countries in Asia.

The most popular breeds internationally are:

1. Angus – Famous breed in the U.S., Canada, and other countries due to its marbling meat quality.

2. Hereford – A hardy breed that adapts well to a range of climates and is popular in the United States, Canada, and Australia.

3. Simmental – This large breed which grows rapidly and has high-yield meat is common in Europe, Canada, and the U.S.

4. Charolais – This large and white French cattle breed also competes for its high-yield meat.

5. Limousin – This muscular breed is common in France and the U.S. Its price for its lean meat. Overall, feeder growth and meat quality depend on the growing climate and feed resources.

What is the future price of feeder cattle?

There is no specific feeder cattle season in the U.S. as production, selling, and purchasing are continuous however, seasonal factors and patterns are evident. Spring and summer are buying seasons for calves as wheat and oats are abundant for grazing and there is less competition in the market. Beef demand grows high in the summer for the grilling season and in the fall and winter for the holiday seasons.

Also, these considerable factors play interchangeably according to the profitability and economic circumstances of farmers, buyers, and consumer preferences. However, due to the continuing inflation customers tighten their disposable spending which results in purchasing reasonable and alternative meats such as chicken and pork.

Additionally, the increasing warm temperatures highly affected the cattle ranching industry, particularly in Brazil. A report from Orbitas (a financial service company) projected that domestic beef production in the country will drop by 25% in 2050 if the government does not step up its climate change and forest conservation strategies. 

Overall, the feeder cattle market expects a double price from its current value which is $200.93 in 2028. However, this trading forecast is subject to change due to internal and external factors.