Call the Market

Cattlemen in the West Face Different Reality Than Those in the East

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
As of July 4, poor-to-very-poor pasture and forage conditions are extensive in the western half of the U.S., challenging cattlemen much like drought did in 1988. (DTN chart)

With a snap of your fingers and a blink of your eye, the Fourth of July holiday is behind us and the cattle market is ready to take on the weeks ahead.

Just last week the feeder cattle market jumped into the driver seat of the cattle complex and is now anxious to make headway. However, one of the stark challenges of this year's market is that cattlemen in the western half of the United States are facing a drastically different situation than cattlemen in the eastern half.

USDA's recent Crop Progress report highlighted the severity of drought that continues to spread across the western half of the U.S. Montana and North Dakota both showed that 77% of their states were in poor-to-very-poor pasture conditions, and South Dakota trailed closely behind them with 74% of the state having poor-to-very-poor pasture conditions. In a year like this, cattlemen in the western half of the U.S. are being challenged much like they were when the drought of 1988 set in. Producers are having a hard time pinpointing their marketing strategies this year because they don't know when exactly they're going to wean, as grass will ultimately be the deciding factor.

Meanwhile, if you look at the U.S. Corn Belt, you'll find that drought isn't a troubling factor at all. In fact, the Midwest's 10-day forecast anticipates that anywhere from 0.5 to 2.5 inches of rain could fall there in the next 10 days. With these large storm clouds brewing ahead and lower temperatures accompanying them, these weather factors have put immediate pressure on the corn market.

On July 6, the corn market plummeted to limit-level losses and the feeder cattle market rallied more than $3.00 higher in most of the contracts. When looking at the continuous feeder cattle chart, the market has surged to $160.82, which is far beyond the 40-day moving average of $148.77 and well above the 100-day moving average of $142.34. In studying years past, the last time the feeder cattle market topped more than the $160.00 threshold was back in late October/early November of 2017.

This week the market is seeing a phenomenal test on this year's feeder cattle market as Superior hosts its "Week In The Rockies" sale in Loveland, Colorado, where right at 188,360 head are selling, and next week, Western Video Market will host its "Silver Legacy" sale in Reno, Nevada.

With last week's trade being interrupted for the holiday, buyers are hitting the road this week with orders to fill and a little extra change in their pocket to spend as cost of gains continue to dwindle.

The feeder cattle market is subject to some volatility as the corn market is basically a weather market at this point, but given there are fewer feeders to market this year -- and that the cash cattle market is demanding some attention -- optimism will continue to be the underlying market tone. Producers in the western half of the U.S. desperately need a strong feeder cattle market to offset the astronomical cost of hay and to offer some relief to what seems to be never-ending challenges.

ShayLe Stewart can be reached at

ShayLe Stewart