Post on 24-Feb-2016
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FEEDER CATTLE SEASONAL PRICE TRENDS
Dr. Curt LacyExtension Economist-Livestock
Show that cattle prices USUALLY move in a predictable pattern.
Show that the patterns vary with the class of cattle.
Explore the factors that can affect these seasonal trends.
Objectives
Prices Usually Follow Some Predictable Pattern
Jan-73
Jan-75
Jan-77
Jan-79
Jan-81
Jan-83
Jan-85
Jan-87
Jan-89
Jan-91
Jan-93
Jan-95
Jan-97
Jan-99
Jan-01
Jan-03
Jan-05
Jan-07
Jan-09$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
500-600# Steer, GA Auctions
Beef cattle prices usually follow a seasonal trend.
These trends are USUALLY fairly predictable.
We can use these seasonalities to estimate anticipated cash prices: Decide on a future marketing date. Decide if we want to pre-price now. Decide if we want to sell now as opposed to
stockering or feeding.
Using Seasonalities to Market Cattle
1. Seasonal prices2. Buy-sell margin
Two ways to use seasonal information in predicting a price
Dollar values Averages Usually predictable However, major supply or demand
shocks can disrupt these seasonalities.
Seasonal Prices
JAN
APRJU
LOCT
90
100
110
120
130
140
150
MED. & LRG. #1 & 2 STEER CALF PRICES500-600 Pounds, Georgia, Weekly
Avg. 2005-09
2010
2011
$ Per Cwt.
05/02/11Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC
JAN
APRJU
LOCT
70
80
90
100
110
120
130
MED. & LRG. #1 & 2 FEEDER STEER PRICES700-800 Pounds, Georgia, Weekly
Avg. 2005-09
2010
2011
$ Per Cwt.
05/02/11Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC
JAN
APRJU
LOCT
70
80
90
100
110
120
130
MED. & LRG. #1 & 2 FEEDER STEER PRICESVarious Weights
700-800
500-600
400-500
Sltr. Strs
$ Per Cwt.
Livestock Marketing Information CenterData Source: USDA/AMS Different classes have
different seasonalities
Based on averages Not absolute However, the highs and lows tend to
group toward certain months.
Limitations with Seasonals
Jan
FebMar
AprMay
Jun Ju
lAug Sep
OctNov Dec
75
80
85
90
95
100
105
110
115
120
125
MED. & LRG. #1 & 2 STEER CALF PRICES500-600 Pounds, Georgia, Weekly, 2006-2010
2006 2007 20082009 2010 2006-2010 Average
$ Per Cwt.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
500-600 lbs. Str.
1/5 1/5 1/5 3/5 3/5 0/5 1/5 2/5 0/5 1/5 1/5 1/5
700-800 Lbs Str.
1/5 2/5 0/5 1/5 1/5 0/5 4/5 4/5 1/5 0/5 0/5 1/5
Times Average Prices Were in the TOP 1/3 for the Year, 2006-2010
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
500-600 lbs. Str.
3/5 1/5 0/5 0/5 0/5 0/5 0/5 0/5 0/5 4/5 4/5 3/5
700-800 Lbs Str.
2/5 2/5 1/5 0/5 0/5 0/5 0/5 0/5 0/5 3/5 4/5 3/5
Times Average Prices Were in the BOTTOM1/3 for the Year,
2006-2010
Useful in stocker or feeder programs Difference in sales price and purchase
price Usually negative Can be used to estimate expected sales
price Very useful in determining potential
profitability
Buy-Sell Margins
Time of Year is important in BSMFall Stockering
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec$80.00 $85.00 $90.00 $95.00
$100.00 $105.00 $110.00 $115.00 $120.00 $125.00
400-500 700-800
Sell Here
Buy Here
BSM and Change in Value400-500 fall to 700-800 spring
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
$(35.00)
$(30.00)
$(25.00)
$(20.00)
$(15.00)
$(10.00)
$(5.00)
$-
$-
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
Change in Value BSM
BSM
($/C
wt.
)
Chan
ge in
Val
ue ($
/hd.
)
BSM and Change in ValueRetain 500-550 fall sell 800+ spring
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
$(25.00)
$(20.00)
$(15.00)
$(10.00)
$(5.00)
$-
$5.00
$10.00
$-
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
Change in Value BSM
BSM
($/C
wt.
)
Chan
ge in
Val
ue ($
/hd.
)
Seasonal information can be very useful in making marketing decisions.
The best or worst time of the year depends on the market class.
Price is just part of profits. Your local market info trumps “state”
info.
Summary
UGA Marketing Alternatives Calculator Buy-Sell Margins Calculator
Additional Resources
www.secattleadvisor.com