Cattle inventory numbers provide a look at the cattle supply in the coming months, University of Tennessee ag economist Andrew Griffith says.
“Given the recent cattle inventory report, the industry has a clearer understanding of cattle supply moving through the next several months,” he says. “Given cattle on feed numbers, the 2022 calf crop, and heifers held as beef replacements, finished cattle prices are not likely to exceed previous record prices this spring and summer.”
However, Griffith says there does appear to be room for prices to push higher, and even higher levels are possible once heifer retention begins and producers begin rebuilding herds.
“Prices certainly have the ability to push higher than current levels, but pushing to $170 or higher is likely out of the question for several more months,” he says. “Such a price level is not likely until heifer retention begins and the quantity of cattle made available to the feeder market has declined. This simply means cattle feeders may have to be patient a little while longer before seeing ‘record’ fed cattle prices.”
Griffith says the recent action is a good reminder markets can be unpredictable.
“This week’s feeder cattle futures trade is a great example of why producers should take advantage of opportunities the market offers, because the market can spin on its heels overnight and change its entire course of action,” he says. “Despite tough winter weather across much of the South and an extremely bullish cattle inventory report, feedlots did not see these as reasons to push prices higher.”
The winter weather did affect marketing plans, although better weather should improve the picture, Griffith says.
“Few producers were willing to brave the rain, freezing rain, sleet, snow, or combination of these elements to gather cattle and haul them to town, but weather conditions appear favorable for moving cattle next week with drier and warm conditions expected.”
Griffith says producers are looking ahead to spring grass growth.
“The spring grass cattle market will heat up quickly in the coming weeks and should push lightweight cattle prices several dollars higher than the current market,” he says. “Many producers are anxiously awaiting the spring green up as hay supplies are dwindling rapidly and alternative feed resources are expensive.”
