Falling Corn Prices Benefit Cattle Industry
Last week’s early season storm that dumped up to four feet of snow in western South Dakota caused the death of thousands of cattle that were still out on range. Although devastating for the ranches hit, it is too soon to tell whether enough cattle died to have a measurable impact on national markets.
Falling corn prices are benefiting the livestock industry. Feedlot closeouts during September were the best since April 2011.
Because of a lapse in federal government funding, USDA stopped issuing market reports on October 1. There is limited data available on current livestock prices, meat prices, weights or slaughter. USDA has blocked access to online historic data.
Missouri feeder cattle auction price averages this week for medium and large frame #1 steers were 400-500# $188.29, 500-600# $175.60, 600-700# $166.92, 700-800# $167.61, 800-900# $162.82 and 900-1000# $152.44/cwt. Medium and large frame #1 heifer price averages in Missouri were 400-500# $164.74, 500-600# $158.66, 600-700# $154.97, 700-800# $151.46, 800-900# $136.52, and 900-1000# $128.07/cwt.
The October live cattle futures contract closed at $128.80/cwt today, up 75 cents from last week’s close. December fed cattle settled at $132.47, up 5 cents for the week. February cattle closed at $134.12/cwt and April at $135.27/cwt. Both were 18 cents lower than the previous Friday.
The December corn futures contract ended the week at $4.33/bushel, down 10 cents for the week. February corn settled at $4.46/bu also down 10 cents from the previous Friday. May corn futures ended the week at $4.545/bushel.
Strong fed cattle futures prices and falling corn prices have given a big boost to feeder cattle futures. The October feeder cattle futures contract ended the week at $167.47/cwt, up $3.02 from the previous Friday. November feeder cattle settled at $169.27, up $3.32 for the week. The January feeder contract ended the week at $168.75/cwt.∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri