I have a little sticky note taped on my desk that asks, "What aren't you paying attention to that you should be?" And though it poses a good reminder for all categories of life, I often look to that note as a reminder to step away from the cattle market and its deep analytical nature, and to access the market from a new 10,000-foot view.
And while most of us have spent plenty of time during the last three days thinking about the fed cattle market and the unbridled success it had last week -- negotiated cash cattle prices jumped $4 higher in the Southern Plains and $10 higher in the Northern Plains -- one thing that I'd encourage you to look at is the feeder cattle market.
Sale reports -- across the entire nation -- continue to report higher sales week in and week out and many have shared that buyers are already beginning to buy grass calves. It's hard to believe that cattle buyers are already buying grass calves when we are still months away from turn out season -- but with our cow herd being as reduced as it is, buyers are concerned that there won't be enough calves to sort through this spring, or that they'll simply be unaffordable. To put these prices into perspective, last Friday (Feb. 9) the CME feeder cattle index closed at $242.95, which is $60.42/hundredweight more than what the CME feeder cattle index was trading at exactly a year ago.
February has historically been a tough month for the cattle market as beef demand typically lags and, in most years, taking on calves in winter conditions is more of a risk than what most feedlots want to take on. But even if the cash cattle market trades steady/somewhat lower in the weeks ahead after last week's staunchly higher trade, it's likely that the feeder cattle market will continue to trade steady/somewhat higher as countryside demand will keep the market burning hot. Cow-calf producers have at least another year of higher feeder cattle prices in front of them -- and given how aggressive prices have been thus far in 2024 -- it's tough telling just how high these prices could get!
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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