Market prices

[jrcowboy]

it seems in the past few days there has been a decline in the prices of 500 lb heifers.... does anyone know the events that have brought this on? i am also interested in learning how to read cattle futures and understand projected value for live cattle and feeders..... anyone have a suggestion on where 2 start looking to learn this information?

thanks

 

[Texas PaPaw]

jr

The main reason most calf & feeder prices are in decline is we are entering fall, which is when the majority of cow calf operators wean and sell their calf crop. This causes an increase in supply at the same time as grass growth and grazing is running out. Historically, fall is a time of increased supply and decreased demand for the reasons mentioned.



Futures prices do not predict the cash price in the future. Futures are merely a process for locking in a future buy or sell price today. If April 08 feeders are trading at $1.15 this means that the seller believes that feeders will be worth less than $1.15 in April and the buyer believes they will be worth more than $1.15 in April. Futures can be an effective risk management tool if used appropriately, but they are not an accurate predictor of prices.

A good book that explains the business and financial side of the cattle business is "Knowledge Rich Ranching". You can order it at the following link:

http://www.stockmangrassfarmer.net/cgi- ... d=362.html

Just my 2 cents worth.

 

[docgraybull]

it seems in the past few days there has been a decline in the prices of 500 lb heifers.... does anyone know the events that have brought this on?

The most likely reason is that I am preparing to wean and sell calves. In my experience, this is the most likely factor to lower the price of weaning weight calves.

 

[Frankie]

it seems in the past few days there has been a decline in the prices of 500 lb heifers.... does anyone know the events that have brought this on? i am also interested in learning how to read cattle futures and understand projected value for live cattle and feeders..... anyone have a suggestion on where 2 start looking to learn this information?

thanks

Traditionally calf prices will drop in October. Mainly that's the result of all those spring calves being weaned and hauled to market at the same time. Here's a link to a Clemson study, but it's true industry wide. Check the graph on the lower right.

The Noble Foundation at Ardmore has had seminars on cattle futures. Browse their site and see if there's anything online.

Clemson: http://cherokee.agecon.clemson.edu/mmm378.htm

Noble Foundation: http://www.noble.org

An Iowa State article: http://www.extension.iastate.edu/Publications/SP34.pdf