As the market settles back into somewhat of a normal schedule following the long Fourth of July weekend, the only thing normal about this year's market is that once again, nothing is normal. We thought that once the market trenched through the first quarter of 2021 that the remainder of year would be straight forward and to the point -- silly us! With the onset of severe drought in the West and an abundance of rain in the East, cattlemen are still trying to find the rhythm to this year's market and how they can best capitalize on the market's developments.
Monday's World Agricultural Supply and Demand Estimates (WASDE) report shared some encouraging news that could bode well for the cattle market moving forward.
The July WASDE report projected steer prices for the third quarter at $12,0 which is $5 more than a month ago, and fourth-quarter steer prices jumped $3, to $123. These quarterly increases pushed the annual steer price to average $119.20, which is $2.20 more than last month's projection of $117. Beef imports were unchanged from a month ago, but beef exports grew by another 80 million pounds for the year.
I fully understand that the paragraph above comes with some mixed emotions. Should we really be getting excited about fat cattle prices averaging $120 to $123 when choice cuts last week averaged $283.03 and select cuts averaged $260.72? Like you, I desperately yearn for the fat cattle market to rally and regain some much-needed leverage. But if export demand can continue to run vigorously, and domestic consumers continue to support beef prices here in the U.S., then at some point the sheer fact that there's fewer cattle around to be marketed will favor feedlots.
Thankfully, through the market's turmoil, the recent testing of the year's feeder cattle market has been strong. Last week, on average throughout the nation, feeder cattle prices trended anywhere from $6 to $10 stronger. It was coherently apparent that areas with grass demanded higher prices, as regions that are dealing with drought are seeing mass liquidation and their markets are simply flooded.
As Western Video Market hosts their Silver Legacy sale this week in Reno, Nevada, the market will be given an opportunity to see how some of the industry's biggest sales fare and what producers could demand for feeders this year.
Tune into this week's Cattle Market News update to hear more about last week's cattle market. Access the report by clicking on the link below or by heading to the DTN/Progressive Farmer Facebook Page: https://fb.watch/…
ShayLe Stewart can be reached at shayLe.email@example.com
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