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Fall Feeder Calf Marketing Update

The fall calf-marketing season usually gets into full swing in mid-October and weekly receipts in the Dakotas report bear that out.

By Tim Petry, Livestock Marketing Economist
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NDSU Extension Service
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The fall marketing run of feeder calves has started as
evidenced by lighter weight calves being sold at livestock
auction markets across the northern Plains.

The USDA Agricultural Marketing Service (AMS) issues a
"Dakotas" feeder cattle market report each week that reports
average feeder cattle prices and the total number sold at six
auction markets in North Dakota and 11 in South Dakota. The
report can be accessed in the national feeder and stocker
cattle summary, which is released on the AMS Web site every
Friday afternoon at: www.ams.usda.gov/mnreports/SJ_LS850.txt.

Individual market reports can be accessed at
www.ams.usda.gov/lsmnpubs/cfauction.htm,
then click on the appropriate state and desired market.

The fall calf-marketing season usually gets into full swing in
mid-October and weekly receipts in the Dakotas report bear
that out. For the week ending Oct. 14, only 31 percent of
feeder cattle sold weighed more than 600 pounds. That compares
with 91 percent weighing more than 600 pounds for the same
week in September.

In addition, the volume of feeder cattle sold during that time
doubled. However, volumes are running less than last year at
this time due to the improved grazing conditions that exist in
western North Dakota and South Dakota.

Prices for all market classes of feeder cattle were averaging
about 5 percent higher than last year's levels in mid-October.
Many 550- to 600-pound steer calves were selling between $125
and $135 per hundredweight (cwt).

Cyclically short supplies and strong demand are bolstering
prices.

The 2005 calf crop is projected by USDA to be 37.8 million
head, up slightly from 37.6 million in 2004, but down slightly
from 37.9 million in 2003. This year's calf crop will be
almost 2.5 million head less than 10 years ago.

More heifer calves likely are to be retained for breeding
purposes than last year because of improved moisture
conditions in many western cattle-producing states. That will
further tighten supplies available to the feedlot sector.

High-quality heifer calves that are selling for replacements
have been averaging $5 to $10 per cwt higher than their
feedlot-bound counterparts. For example, a recent market
report quoted 550- to 600-pound heifers at $115 to $120 per
cwt, while an individual lot of 585-pound replacement heifers
brought $124.50.

Two important fundamentals that affect the demand for feeder
cattle are prices of fed cattle and corn. Increasing
fed-cattle prices and declining corn prices have affected calf
prices positively this fall.

Several factors have combined to support fed-cattle prices.
Seasonally declining beef production, fewer than anticipated
fed-cattle imports from Canada and relatively good consumer
demand, in spite of higher energy prices, have bolstered
prices. Fed-cattle prices have increased about $10 per cwt
since mid-July seasonal lows and are averaging $3 to $4 higher
than last year at this time.

Corn prices have declined about 60 cents per bushel from July
highs and are averaging about 20 cents per bushel less than
last year at many cattle feedlot locations.

Higher drying costs due to increased energy costs will
encourage feedlots to store high-moisture corn. That will
stimulate the demand for feeder cattle as well.

Some seasonal weakness in calf prices can be expected as heavy
runs come to market in the next two months. However, prices
should average near or slightly above last year's levels.

Feeder calf marketers are reminded that different lots of
feeder calves of the same weight and grade can sell at a
relatively wide range in prices, depending on the many market
factors that can affect prices. It is common for prices of
550- to 600-pound, medium- and large-frame No.1 steers to
differ from $5 to $10 on the same sale day.

Calves that have received preweaning shots, qualify for
various niche-marketing programs or may be replacement-quality
heifers are selling particularly well now. However, it is very
important that documentation is made available so buyers can
be assured that premium prices are warranted.

Producers are encouraged to contact their market several weeks
prior to selling for tips on management and marketing
practices that can help assure that calves bring the best
possible price.

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NDSU Agriculture Communication

:Source: Tim Petry, (701) 231-7469, tpetry@ndsuext.nodak.edu
:Editor: Rich Mattern, (701) 231-6136, richard.mattern@ndsu.edu

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