Economic value Analysis for Midwest Steers – 02/03/2021

The USDA estimated the number of steers and heifers on January 1 at 12.2  million head which is slightly larger than the year earlier level. The number of steers and heifers sent to market during the first half of 2021 will likely exceed the 2020 level as cattle sales last year were distorted by the Covid virus problem. 

The second scatter study in our report displays the January/June average price for Midwest deliverable finished steers as a function  of the steer & heifer marketings during the first half of the year. Note the current futures prices are on the high side of the scatter although not outside of the expected standard deviation.

An extension of the recent cattle futures rally is possible but major gains will be bucking heavier first half cattle slaughter.