Feeder cattle economic value – 01/30/2021

The USDA estimated the feeder cattle supply  over 500 pounds on January 1, 2021 at 11.5 million head which is about equal to the year earlier tally. We have scattered the average feeder cattle price during the first quarter of the year as a function of the feeder supply.  Note that the current cash price of feeders is well under the regression line. The high cost of feed has depressed feeder values relative to the historical supply – feeder steer relationship.

March feeder cattle are currently trading in line with April live (finished) cattle. Both live and feeder cattle values project to hold steady or advance modestly moving into the spring period. Feeders could falter if the bull corn market moves closer to $6.00 per bushel.