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Agricultural News

Regional Differences in Cattle Markets Continue to Grow

Mon, 23 Apr 2012 11:33:28 CDT

Regional Differences in Cattle Markets Continue to Grow
OSU Extension Livestock Marketing Specialist Derrell Peel dug into the meat of the recent Cattle on Feed Report and came up with a few surprises. Here is his latest contribution to the Cow/Calf Corner Newsletter:

The latest USDA Cattle on Feed report contained few surprises in the overall numbers for placements and marketings. However, a closer look at the report reveals a continuation of recent trends that reflect more regional differences in cattle markets. No doubt the lingering effects of the drought, which continues in parts of the southwest, contribute to some of the observed differences but the changes may also reflect more long term shifts in market structure.

The contrasts between Texas and Nebraska in this Cattle on Feed report are striking. On April 1, on-feed inventory in Texas was equal to last year, but below the national total of 102 percent of last year, while Nebraska was 106 percent of last year. March Placements in Texas were down 12 percent from last year but Nebraska placements were up 13 percent from a year ago. Nebraska placements included more feeders over 800 pounds while Texas placed more under 600 pound feeders as part of smaller total placements in the state.

Feeder and fed cattle prices likewise indicate some regional differences. For several months, there has been a tendency for stronger fed cattle prices in the Midwest relative to the Southern Plains. In fact, for 2011, the average of weekly fed steer prices for the year was $0.79/cwt. higher for Nebraska compared to the Texas-Oklahoma fed price. For the seven years, from 2005 through 2010, the average Nebraska price compared to Texas-Oklahoma was negative each year and averaged -$0.79/cwt. across all years.   

Interestingly, the feeder market comparison is just the opposite. Feeder prices are normally higher in Nebraska but in the last few weeks Oklahoma feeder prices are averaging much closer, though still slightly below, Nebraska price levels. However, while Southern Plains steer prices are averaging closer to Nebraska levels, heifer markets in the central and northern plains continue to show more indications of heifer retention compared to the south. Several recent market reports from Nebraska and South Dakota include heifers for replacements that are selling at prices at or above steers of comparable weights. So far, this phenomenon has not been very evident in Oklahoma. It suggests that herd rebuilding is proceeding slowly and cautiously in the Southern Plains. Bred heifer and cow prices in Oklahoma are strengthening but have not advanced as fast nor to as high of levels as have been seen for more than a month in Nebraska.



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