Fall Sales Disappointing Some Cow-Calf Producers – DTN The Progressive Farmer

Those producers with resources to precondition or even background calves, were often able to add value.

“There is definitely a potential to add value this way,” says Burdine. “But that is an operation by operation decision.”

The USDA’s mid-October report reflected a positive trend on heavier feeder steers (750-800 pounds), showing an average price at $147.26/cwt, October 7, 2019, at the Oklahoma City National stockyards. That price was $6 above prices the week before the August fire at Tyson’s beef plant in Holcomb, Kansas. It is a $12 recovery from the September 9, 2019, low of $134.80/cwt.

Fed cattle prices have also turned up, based on the USDA report. Market prices for fed steers for the 5-area marketing region increased to $107.34/cwt the week ending October 4th; a 7% increase since September 15, 2019.

Whether that momentum can continue, reaching back to cow-calf producers selling into that 4- and 5-weight category, will depend on a number of factors, one being the 2020 outlook for exports. The USDA is projecting positive news in that area. The U.S. beef forecast for first quarter (2020) has been revised up from 725 million pounds, to 765 million pounds. For second quarter, it went from 825 to 830 million pounds; and for fourth quarter, it went up from 845 to 865 million pounds. Third quarter forecasts called for a dip, from 850 to 845 million pounds.

Burdine says he’s cautiously optimistic the export market will be a bright spot moving into next year.

“Given all that is going on, I think the export market has held up reasonably well,” he says. “African Swine Fever in China continues to make an impact, and due to protein shortages there we’ve seen both pork and beef exports higher. It makes a lot of sense that we’ll see that momentum continue into 2020.”

(VM/AG)

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