The Richmond Register

Lifestyles & Community

December 19, 2012

Kentucky beef cattle market – looking ahead

RICHMOND — As we approach the end of the year, calf markets have remained pretty steady since fall and a bit stronger than mid-summer. For the first week of December, 500-to 60-pound feeder steers averaged around $145 per cwt. in Kentucky auction markets. The same week, there was a great deal of variation in heavier feeders, but groups of 7wt and 8wt steers generally traded in a range from the mid-$130’s to the low $140’s. This is a feeder cattle market driven by two primary factors: Tight supplies and expensive feed. With spring feeder cattle futures on the board in the low-mid $150’s, winter backgrounders are likely being tempted by gross margins in the $350 to $400 range. Slightly lower feed prices over the last few months also have improved expected returns to winter programs.

As we look towards the spring of 2013, a tight supply of calves will provide solid support, as will strong fall feeder cattle contracts. It’s hard not to imagine a spring 2013 market comparable to what was seen in the spring of 2012. Many backgrounders were paying $1,000+ for calves this spring and I would expect something similar for large, high quality groups once again.

If we stretch a bit further and think about next fall, I think the market signals point to continued strength.  First, there will be fewer calves born this spring as I expect beef cow numbers to be down when USDA releases their Jan. 1 inventory estimates next month. There is also the possibility that we could see some interest in expansion next year, which would pull some heifers off the market. And, current corn futures suggest that if weather cooperates (the wildest of all wildcards), we should see slightly lower grain prices next year. So, while many things could impact markets in 2013 and prices are likely to decline seasonally from their grass driven highs in the spring, I would expect the fall 2013 market to be stronger than the market that we saw this fall. (Source: Dr. Kenny Burdine, Extension Specialist in Ag Economics, University of Kentucky)

Holiday closing schedule

The Madison County Extension Office will be closed Monday, Dec. 24 through Tuesday, Jan. 1, 2013. The office will reopen on Wednesday, Jan. 2, 2013.

Educational programs of the University of Kentucky Cooperative Extension Service serve all people regardless of race, color, age, sex, religion, disability or national origin.

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