Feeder cattle Seasonal Price trends Dr. Curt Lacy Extension Economist-Livestock

Objectives 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.

Prices Usually Follow Some Predictable Pattern

Using Seasonalities to Market Cattle 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.

Two ways to use seasonal information in predicting a price Seasonal prices Buy-sell margin

Seasonal Prices Dollar values Averages Usually predictable However, major supply or demand shocks can disrupt these seasonalities.

Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

Different classes have different seasonalities Livestock Marketing Information Center Data Source: USDA/AMS Different classes have different seasonalities

Limitations with Seasonals Based on averages Not absolute However, the highs and lows tend to group toward certain months.

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. 1/5 3/5 0/5 2/5 700-800 Lbs Str. 4/5

Times Average Prices Were in the BOTTOM1/3 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 4/5 700-800 Lbs Str. 2/5

Buy-Sell Margins 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

Time of Year is important in BSM Fall Stockering Buy Here Sell Here

BSM and Change in Value 400-500 fall to 700-800 spring

BSM and Change in Value Retain 500-550 fall sell 800+ spring

Summary 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.

Additional Resources www.secattleadvisor.com UGA Marketing Alternatives Calculator Buy-Sell Margins Calculator www.secattleadvisor.com