![]() The upcoming opportunity in the conventional cattle market is for established ranchers and not for newbies. For more information on why American beef is endangered, click here. With the control that the 4 major meatpackers have on the commodity cattle market, the system is rigged. ![]() If there is an upswing in 2022-24 it will follow the same pattern and will not be a long term increase in prices. The 2014 price spike ended as quickly as it began. Any upcoming price spikes will be very short term. Here in 2022 we are facing the same set of circumstances and possibly the same opportunity to cash in on our beef cattle, but there are 3 things we need to pay attention to: Once precipitation returned to these drought stricken areas, ranchers began restocking, and prices went up for a very brief period of time… In 2011, a red hot drought across the Deep South drove many ranchers to liquidate and herd sizes were reduced. What lead up to these record high prices? In 2014 the live cattle market saw all time record high prices, with steers at 550lbs going from $1.63per pound in 2012 to $2.95 in 2014. Understanding price slides can help producers improve cattle marketing and evaluate feeder cattle production alternatives.Channel Guest: Corbitt Wall, FEEDER FLASH, ĮMAIL: shepherdess (at) harmonyfarms.blog Price slides expressed in percentages adjust automatically and appropriately to changing market prices. For example, 675 pound steers have an annual average price slide of 4.0 percent which varies from 8.2 percent in March to essentially zero in October. Price slides in the middle feeder weights (575-725 pounds for steers, 550-700 pounds for heifers) have wide variation across months. In general, price slides are relatively constant across months for light weight calves and for the heavy feeders. Price adjustments can be fine-tuned using the monthly average price slides. It is also apparent that price slides for both steers and heifers vary across months. It is evident from Table 1 that the percent price slide for heifers is generally lower compared to steers for the lighter weights but is roughly equal to the steer price slide for heavy feeders. or $12.06/cwt if the market price was $180/cwt. Thus, the 575 pound steer would have a price slide of $8.04/cwt. However, while the percent price slide is constant, the absolute price adjustment depends on price level. In this example, the price slide is close to the traditional 10 cent slide. If the steer actually weighs 30 pounds more or 605 pounds, the price would be adjusted down by $3.02/cwt ($10.05 x 0.3 cwt.) to $146.98 ($150-$3.02). The annual average price slide is 6.7 percent which results in a price adjustment of $10.05/cwt. As an example of how to use these price slides, suppose the base price of 575 pound steers is $150/cwt. It is apparent that price slides are not only different for different weights but also vary for steers and heifers and at different times of the year. ![]() Table 1 shows annual average and monthly average price slides for selected weights of steers and heifers. Price slides depend on the price level and thus are more accurately stated as a percent of the base price. The price volatility of recent years has shown that these rules of thumb using absolute levels are inadequate to accurately capture price adjustments over a wide range of price levels. a 10 cent slide on calves or a 6 cent slide on yearlings. Prices slides are often stated in terms of traditional rules of thumb, e.g. Price slides are also useful for producers to evaluate price changes for the weight gain of calves in a preconditioning or short backgrounding program or perhaps the additional weight from creep feeding calves. Price slides have a number of uses, the most common of which is adjusting the price of forward contracted cattle if actual weight is different from the specified base weight. Price slides are a measure of the amount of price adjustment as weight changes from a base weight. Not only do prices vary across cattle weights but the size of the price adjustment depends on the weight of the cattle. Feeder cattle prices depend on the weight of the cattle with lightweight cattle typically having the highest price per pound (or hundredweight) and lower prices for heavier cattle. ![]()
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