Cattle market to close year strong

Feeder cattle are showing some momentum as the year comes to an end. University of Tennessee ag economist Andrew Griffith says it is good for cattle feeders, who have been paying high prices.

“This was a good week for the cattle feeder as they were able to achieve a higher price as the market looks to close out the year strong,” he says. “This is a win for the cattle feeder in that they have been paying strong prices for new inventory, and it does not appear as if said new inventory is going to decline in price anytime soon.”

Griffith says there is no guarantee feeder cattle prices will keep going up, but they at least seem to have fairly solid support and there is no indicator of a decline coming in the near term.

“That is not to say feeder cattle prices will continue to increase at the rate they have the past few weeks, but there is no information at this time that would indicate a large price decline,” he says.

“Thus, cattle feeders will look to maintain current finished cattle prices as those levels will be necessary to achieve positive margins. If positive margins disappear then cattle feeders will bid lower for feeder cattle.”

The strong feeder cattle market has been part of an overall good run for cattle markets.

“The market has been steadily increasing the past couple of months for most classes of calves and feeder cattle,” Griffith says.

“This trend is expected to continue into the new year as calf prices tend to creep higher heading toward spring grass. If seasonality is in play then this will certainly be the case.

“The one question that should really be answered is if there are any factors that could knock this train off the tracks.

“There are any number of factors that could negatively influence cattle prices, but most of them could not be predicted.”