The daily five-market negotiated cash fed cattle price reported by USDA on April 6 was $172.33/cwt, a new record daily fed cattle price. This was followed by the next day seeing $175.87/cwt. The previous record daily price was $172.08/cwt on Nov. 26, 2014.
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Where do fed prices go from here? In a steady market, fed prices would typically peak seasonally about now and move lower through the third quarter before increasing to the end of the year. This sort of typical pattern is currently priced into the live futures, with futures prices decreasing from the nearby April contract (currently just over $171/cwt) to June (about $163/cwt) and August ($162/cwt), before increasing in the October contract ($166/cwt) and December ($171/cwt). At this time, live futures prices do not exceed nearby levels until the February 2024 contract (currently $174/cwt).
Will fed prices follow this typical seasonal pattern this year? In 2021 and 2022, the strong uptrend in fed prices offset seasonal tendencies, with prices moving continually higher. There is good reason to expect the uptrend to continue in 2023. The seasonality priced into the markets now may fade as markets trend higher going forward.
Feedlot inventories are just beginning to fall with even tighter feeder cattle supplies, and they are likely to continue decreasing at least through 2023, pushing fed prices higher. Fed prices may increase more slowly or plateau briefly in the summer months but are not likely to have a typical seasonal decline going forward.
Feeder cattle prices have not yet reached record levels, but are advancing to surpass previous price peaks. Oklahoma combined auction prices for 500-550 pound, medium/large No. 1 steer prices for the week ending April 7 were $251.41/cwt, the highest price since August 2015. The record price for this weight group was $306.42/cwt on Dec. 12, 2014.
For heavier feeder cattle, 800-850 lb. steer prices averaged $189.53/cwt, the highest price since Oct. 23, 2015. The highest previous price for these steers was $238.87/cwt on Oct. 10, 2014.
Feeder cattle prices are currently about 80% of the record price levels in late 2014 and will undoubtedly exceed previous high prices at some point in the coming months. — Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
