Feeder cattle prices are facing some challenges, although University of Tennessee ag economist Andrew Griffith says the right kind of price action could mean a gradual cattle herd expansion, which could prolong higher prices. “Pressure on feeder cattle futures continues to hamper cash prices at local auction markets, and the hope of a wild and untamed run to higher prices seems highly unlikely at this stage in the game,” he said. “As has been mentioned several times, steady prices at an elevated level would be good for producers as it will extend cattle herd expansion over a longer period and thus result in strong prices being experienced for a longer period.
” Griffith said producers might want more today, but in the long-term elevated but steady prices could be a good thing. “This is not a popular idea amongst the masses as most people want all they can get today, and they will worry about tomorrow when it gets here,” he said. “.
..The hope would be for producers to still be in business the next several years, which means many folks will be in the business long enough to see prices decline again before increasing at a point further down the road.
” Griffith said the cattle market is heading into an important time. “The market is approaching the season when the spring-born calf crop is weaned and brought to market,” he said. “One should expect freshly weaned calf prices to seasonally decline moving through September and October and potentially into November.
Lower prices this fall may not persist as long as in years past due to fewer cattle making their way to town and due to drought conditions forcing calves off pasture earlier than normal.” As usual, Griffith said drought conditions are varied. “Drought is not negatively impacting all regions of the country, but it has influenced Tennessee and many surrounding regions,” he said.
“Thus, producers in drought regions may wean and move calves earlier than is typical. This will put the pressure on buyers to purchase when cattle are available because the pipeline may be far from full by December.”.
