Sort & Cull

If you're one that likes to keep tabs on the feeder cattle and calf markets, you've noticed that, as of late, sale barns have been experiencing some lighter runs of cattle. As the market has already worked through the bulk of the yearlings that were left to market from last year, cattlemen have only a couple weeks left before the market begins to test feeder cattle prices for this upcoming summer and fall.

With fat cattle prices teetering just shy of $120 live, and trading dressed anywhere from $187 to $192 -- all while corn prices soar higher -- producers are starting to grow worried about what the market exactly intends to do.

One of the bigger questions cattlemen have on their mind is, "how are feedlots going to swing it this year?"

It doesn't take a rocket scientist to understand that high inputs and low outputs equate to a losing profit scenario. High corn prices aren't necessarily a bad thing, but when high corn prices are stacked next to historically low live cattle prices, that's when the real crisis surfaces. The feeding sector desperately needs to see the price of fat cattle increase in order for them to be able to honestly bid on feeder cattle this fall. With the cost of gains as lofty as they are -- with corn above $7.00 per bushel in the May and July contracts -- feedlots have got to see one side of the market give, in order for their own numbers to work out.

Last week's negotiated cash cattle trade totaled 83,883 head. Of that, 64% (54,064 head) were bought with delivery in the next two upcoming weeks, while the remaining 36% (29,819 head) are scheduled for delivery in the following 15 to 30 days. Live cattle prices in the South traded for $1.00 lower and dressed cattle prices in the North traded for $1.00 to $2.00 lower than a week ago.

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ShayLe Stewart can be reached at shayle.stewart@dtn.com

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