September 22, 2017 Tennessee Market Highlights Number: 38

FED CATTLE: Fed cattle traded $2 higher compared to last week on a live basis. Pric-es on a live basis were mainly $108 while prices on a dressed basis were mainly $170 to $172.

The 5-area weighted average prices thru Thursday were $106.75 live, up $2.25 from last week and $166.00 dressed, down $0.87 from a week ago. A year ago prices were $106.63 live and $167.90 dressed.

Cash trade for finished cattle was slow through the week as it has been the past several weeks, but Friday brought optimism for cattle feeders. Packers began to bid higher prices though they were bidding $2 lower than cattle feeders’ asking prices. The sudden surge in cash bid prices jolted live cattle futures and resulted in traders push-ing prices higher. Does this mean the sum-mer low for cattle prices is in? Considering today is the last day of summer then it would appear the summer low would have to be set. Moving through the fall months, prices could always see another soft spot, but the expectation is for finished cattle prices to methodically improve heading toward the end of the year.

BEEF CUTOUT: At midday Friday, the Choice cutout was $191.51 no change from Thursday and down $0.08 from last Friday. The Select cutout was $188.50 up $0.09 from Thursday and up $2.50 from last Fri-day. The Choice Select spread was $3.01 compared to $5.59 a week ago.

The Select cutout price bounced back from last week but Choice beef remained stag-nant. There is very little happening in the beef market to provide much support for Choice beef prices. Beef production is up 4.4 percent year to date compared to 2016 while the percentage of beef grading Prime and Choice is also higher than a year ago. A simple average of weekly estimated grading of steers and heifers shows the number of cattle grading Prime and Choice so far in 2017 is 2.5 percent higher than the same

time period in 2016 while animals grading Select has declined more than 1.5 percent. For the week ending September 9th, it is estimated 6.5 percent of steers and heifers graded Prime while 73.1 percent graded Choice. Similarly, it is estimated 16.3 per-cent graded Select that week. It would be deemed positive from a production stand-point that more cattle are grading Prime and Choice, but it has resulted in a narrow-ing of the Choice Select spread. The dynam-ics of increased beef production and the quantity grading Choice or higher will keep pressure on Choice beef prices.

OUTLOOK: Attempting to call a trend for the Tennessee feeder cattle market this week is like trying to pin a tail on a donkey or catch lightning in a jar. It can be done, but no one is going to garner any pleasure or benefit much. Heifers were steady to $2 lower compared to last week based on the Tennessee weekly auction market averag-es. Steers weighing less than 600 pounds were $3 to $6 lower while steers 600 pounds and heavier were unevenly steady. Slaughter cows were $2 to $3 lower while slaughter bull prices were $4 to $7 lower compared to a week ago. The cash market is showing evidence of seasonal price softening, but the futures market has been on an $11 to $14 run to the upside the past month. Feeder cattle futures contracts from September 2017 through January 2018 are trading in a range from $153 to $158 per hundredweight while the remain-ing actively traded 2018 contracts are all trading around $150. Without going into detail or maybe a lack of understanding, it is difficult to believe feeder cattle futures prices are depicting an accurate story for the next 12 months in the cattle markets. Thus, looking at the fundamentals and his-tory may provide a clearer picture of what to expect through the fall of 2017 and into 2018. A larger cow herd will lead to a larger calf crop this fall than has been seen in sev-

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Livestock Comments by Dr. Andrew P. Griffith Trends for the Week Compared to a Week Ago

Slaughter Cows

$2 to $3 lower

Slaughter Bulls

$4 to $7 lower

Feeder Steers

less than 600 lbs. $3 to $6 lower, 600 lbs. and over unevenly steady

Feeder Heifers

Steady to $2 lower

Feeder Cattle Index

Wednesday’s index: 151.11

Fed Cattle

The 5-area live price of $106.75 is up $2.25. The dressed price is down $0.87 at $166.00.

Corn

December closed at $3.50 a bushel, down 4 cents since last Friday.

Soybeans

November closed at $9.70 a bushel, up 2 cents since last Friday.

Wheat

December closed at $4.52 a bushel, up 3 cents since last Friday.

Cotton

December closed at 68.25 cents per lb, down 0.82 cents since last Friday.

2

eral years. Some of those calves have already made their trip to town, but more will have wheels set under them in the next six to eight weeks. The larger calf crop will pressure lightweight calf prices this fall from current levels. The larger supply of calves will also result in increased placements of cattle into feedlots which suggest softer prices. Strong profitability in the feeding sector the first six months of 2017 may help support feeder cattle prices, but failure of the live cattle market to re-cover could put a damper on too much support. Though the futures market is pricing feeder cattle this fall higher than the beginning of 2018, seasonality would point to stronger prices after the first of the year.

The September cattle on feed report for feedlots with a 1000 head or more capacity indicated cattle and calves on feed as of September 1, 2017 totaled 10.50 million head, up 3.6% com-pared to a year ago, with the pre-report estimate average ex-pecting an increase of 2.7%. August placements in feedlots to-taled 1.92 million head, up 2.6% from a year ago with the pre-report estimate average expecting placements down 3.2%. Au-gust marketing’s totaled 1.98 million head up 5.9% from 2016 with pre-report estimates expecting marketings up 6.0%. Place-ments on feed by weight: under 800 pounds down 1.5%, 800 to 999 pounds up 11.0%, and 1,000 pounds and over down 8.3%.

ASK ANDREW, TN THINK TANK: The question this week comes from an industry consultant for NOAA. The question was in re-lation to how livestock producers utilize information from the US Drought Monitor to plan for and mitigate the impacts of drought. Each reader of this commentary probably uses the US Drought Monitor information a little differently, but it is likely it is not the only source of information. Producers gather infor-mation from many sources to assist in decision making. Howev-er, the US Drought Monitor can help in many ways, and the way it impacts decision making depends largely on the time of year and the region being impacted. Precipitation influences grain and forage production which means precipitation can influence feed costs before an animal enters the feedlot and after the animal enters the feedlot. Changes in feed costs often influence market prices for cattle and thus the decision making of livestock producers. This is a simplification of the overall use of the US Drought Monitor, but it can be a valuable tool.

(Continued from page 1)

Livestock Comments by Dr. Andrew Griffith

Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996.

FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –October $111.58 +1.48; December $117.43 +1.23; February $120.05 +0.80; Feeder cattle –September $153.40 +0.23; October $156.10 +0.23; No-vember $157.63 +0.80; January $153.85 +0.68; December corn closed at $3.54 up $0.03 from Thursday.

Thursday September 21, 2017

Month Class III Close Class IV Close

Sep 16.35 15.97

Oct 16.02 15.64

Nov 15.95 15.65

Dec 15.83 15.65

Jan 15.63 15.45

Milk Futures

Cattle Hogs

———— Number of head ————

This week (4 days) 116,000 454,000

Last week (4 days) 117,000 451,500

Year ago (4 days) 114,000 439,000

This week as percentage of

Week ago (%) 99% 101%

Year ago (%) 102% 103%

Average Daily Slaughter USDA Box Beef Cutout Value

Choice 1-3 600-900 lbs

Select 1-3 600-900 lbs

———————— $/cwt —-———————

Thursday 191.51 188.41

Last Week 191.00 186.72

Year ago 187.17 179.78

Change from week ago +0.51 +1.69

Change from year ago +4.34 +8.63

3

Crop Comments by Dr. Aaron Smith

Overview Corn and cotton were down; soybeans and wheat were up for the week. December corn futures prices have moved sideways since the contract low on August 31 of $3.44 ¼, closing at $3.50 ¼ on Thursday. Mixed yield reports across the Corn Belt continue to provide some production uncertainty. Fur-

ther complicating the supply picture are USDA’s projections of 2.335 billion bushels of domestic stocks versus an almost 1 billion bushel projected decrease (8.935 billion bushels to 7.971 billion bushels, an 11% year-over-year reduction) in global corn stocks from the 2016/17 marketing year end to the 2017/18 marketing year end. Corn prices are likely to establish (if the low hasn’t al-ready been set) a bottom this month. Soybean prices have crept off early August lows ($9.21 on August 16) and are now in a short term up trend, closing Thursday at $9.70 ¾. To maintain upward price movement, markets will look for either USDA to reduce US average yield or export sales pace will need to accelerate to catch up to the five year average pace. Currently, total export commitments as a percent of total USDA marketing year exports are 32% compared to a 5-year average of 47%. Two wild cards exist for soybean markets 1) trade (trade agreements/disruptions) and 2) South American plantings. Both have the potential to move markets substantially in either direc-tion. Cotton markets have retreated from hurricane driven highs. The December contract peaked at 75.75 on September 8, since then prices have retreated 7.5 cents closing at 68.25. In the next month, cotton prices could test the December contract low of 66.15 on June 26. In Tennessee, quality premiums for cotton will be a producer’s best path towards obtaining a higher price. ***This week’s futures contract numbers are as of Thursday market close*** Corn December 2017 corn futures closed at $3.50 down 4 cents since last Friday. For the week, December 2017 corn futures traded between $3.46 and $3.55. Across Tennessee, average basis (cash price-nearby futures price) weakened or remained unchanged at Memphis, Northwest Barge Points, Northwest, Lower-Middle, and Upper-middle Tennessee. Overall, basis for the week ranged from 36 under to 13 over the December futures contract with an average of 26 under at the end of the week. Nationally, the Crop Progress report estimated corn dented at 86% compared to 75% last week, 92% last year, and a 5-year average of 90%; corn ma-ture at 47% compared to 34% last week, 21% last year, and a 5-year average of 50%; corn harvested at 7% compared to 5% last week, 8% last year, and a 5-year average of 11%; and corn condition at 61% good-to-excellent and 13% poor-to-very poor. In Ten-nessee, the Crop Progress report estimated corn condition at 87% good-to-excellent and 3% poor-to-very poor; corn dented at 97% compared to 95% last week, 99% last year, and a 5-year average of 98%; corn mature at 88% compared to 79% last week, 92% last year, and a 5-year average of 83%; and corn harvested at 46% compared to 26% last week, 65% last year, and a 5-year average of 54%. Downside price protection could be obtained by purchasing a $3.55 December 2017 Put Option costing 12 cents establishing a $3.43 futures floor. Dec/Mar and Dec/Dec future spreads were 13 and 43 cents, respectively.

Corn net sales reported by exporters from September 8-14 were below expectations with net sales of 20.7 million bushels for the 2017/18 marketing year. Exports for the same time period were down from last week at 27.7 million bushels. Corn export sales and commitments were 23% of the USDA estimated total annual exports for the 2017/18 marketing year (September 1 to August 31)

(Continued on page 4)

4

Crop Comments by Dr. Aaron Smith

compared to a 5-year average of 30%. Ethanol production for the week ending September 15 was 1.033 million barrels per day down 14,000 from the previous week. Ethanol stocks were 21.138 million barrels, up 6,000 barrels. In Tennessee, January 2018 cash forward contracts averaged $3.61 with a range of $3.45 to $3.74. March 2018 corn futures closed at $3.63 down 4 cents since last Friday. December 2018 corn futures closed at $3.93 down 4 cents since last Friday. Soybeans November 2017 soybean futures closed at $9.70 up 2 cents since last Friday. For the week, November 2017 soybean futures trad-ed between $9.58 and $9.76. Average soybean basis weakened or remained unchanged at Memphis, Northwest Barge Points, Low-er-middle, Upper-middle, and Northwest Tennessee. Basis ranged from 40 under to 8 over the November futures contract at eleva-tors and barge points. Average basis at the end of the week was 15 under the November futures contract. Nationally, the Crop Pro-gress report estimated soybeans dropping leaves at 41% compared to 22% last week, 43% last year, and a 5-year average of 43%; soybeans harvested at 4% compared to 4% last year and a 5-year average of 5%; and soybean condition at 59% good-to-excellent and 12% poor-to-very poor. In Tennessee, the Crop Progress report estimated soybean condition at 80% good-to-excellent and 5% poor-to-very poor; soybeans dropping leaves at 37% compared to 23% last week, 51% last year, and a 5-year average of 39%; and soybeans harvested at 3% compared to 4% last year and a 5-year average of 4%. In Tennessee, October/November 2017 soybean cash contracts average $9.47 with a range of $9.26 to $9.65. November/December 2017 soybean-to-corn price ratio was 2.77 at the end of the week. Downside price protection could be achieved by purchasing a $9.80 November 2017 Put Option which would cost 23 cents and set a $9.57 futures floor.

Nov/Jan and Nov/Nov future spreads were 11 cents and 18 cents, respectively. Net sales reported by exporters were above expec-tations with net sales of 85.9 million bushels for the 2017/18 marketing year. Exports for the same period were down from last week at 34.7 million bushels. Soybean export sales and commitments were 32% of the USDA estimated total annual exports for the 2017/18 marketing year (September 1 to August 31), compared to a 5-year average of 47%. January 2018 soybean futures closed at $9.81 up 2 cents since last Friday. November 2018 soybean futures closed at $9.88 up 3 cents since last Friday. Cotton Delta upland cotton spot price quotes for September 20 were 69.25 cents/lb (41-4-34) and 70.50 cents/lb (31-3-35). Adjusted world price (AWP) decreased 2.36 cents to 60.91 cents per pound. Net sales reported by exporters were up from last week with net sales of 219,900 bales for the 2017/18 marketing year and 37,100 for the 2018/19 marketing year. Exports for the same period

(Continued on page 5)

5

Crop Comments by Dr. Aaron Smith

were up from last week at 175,700 bales. Upland cotton export sales were 51% of the USDA estimated total annual exports for the 2017/18 marketing year (August 1 to July 31), compared to a 5-year average of 40%. October 2017 cotton futures closed at 69.04 down 1.09 cents since last Friday. Oct/Dec and Dec/Mar cotton futures spreads were -0.79 cent and -0.67 cents, respectively. Nationally, the Crop Progress report estimated cotton bolls opening at 44% compared to 34% last week, 47% last year, and a 5-year average of 51%; cotton harvested at 11% compared to 9% last week, 6% last year, and a 5-year average of 6%; and cotton condition at 61% good-to-excellent and 14% poor-to-very poor. In Tennessee, cotton condition was estimated at 86% good-to-excellent and 5% poor-to-very poor; and cotton bolls opening at 50% compared to 32% last week, 65% last year, and a 5-year average of 54%. December 2017 cotton futures closed at 68.25 cents down 0.82 cents since last Friday. For the week, December 2017 cotton fu-tures traded between 68.18 and 69.95 cents. Downside price protection could be obtained by purchasing a 69 cent December 2017 Put Option costing 2.02 cents establishing a 66.98 cent futures floor. March 2018 cotton futures closed at 67.58 down 0.41 cents since last Friday. Wheat In Memphis, old crop cash wheat ranged from $4.18 to $4.25. Wheat net sales reported by exporters were within expectations with net sales of 11.3 million bushels for the 2017/18 marketing year. Exports for the week were down from last week at 15.7 mil-lion bushels. Wheat export sales were 50% of the USDA estimated total annual exports for the 2017/18 marketing year (June 1 to May 31), compared to a 5-year average of 53%. Dec/Mar and Dec/Jul future spreads were 20 cents and 44 cents, respectively.

December 2017 wheat futures closed at $4.52 up 3 cents since last Friday. December 2017 wheat futures traded between $4.35 and $4.54 this week. December wheat-to-corn price ratio was 1.29. Nationally, the Crop Progress report estimated winter wheat planted at 13% compared to 5% last week, 15% last year, and a 5-year average of 15%. March 2018 wheat futures closed at $4.72 up 4 cents from last Friday. June/July 2018 cash forward contracts ranged from $4.58 to $5.04 for the week. July 2018 wheat fu-tures closed at $4.96 up 4 cents since last Friday. Downside price protection could be obtained by purchasing a $5.00 July 2018 Put Option costing 35 cents establishing a $4.65 futures floor. Additional Information: Links for data presented:

U.S. Export Sales - https://apps.fas.usda.gov/export-sales/esrd1.html

USDA FAS: Weekly Export Performance Indicator – https://apps.fas.usda.gov/esrquery/esrpi.aspx

EIA: Weekly ethanol Plant Production - https://www.eia.gov/dnav/pet/pet_pnp_wprode_s1_w.htm

EIA: Weekly Supply Estimates - https://www.eia.gov/dnav/pet/pet_sum_sndw_a_EPOOXE_sae_mbbl_w.htm

Upland Cotton Reports - https://www.fsa.usda.gov/FSA/epasReports?area=home&subject=ecpa&topic=fta-uc

Tennessee Crop Progress - https://www.nass.usda.gov/Statistics_by_State/Tennessee/Publications/Crop_Progress_&_Condition/

U.S. Crop Progress - http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1048

USDA AMS: Market News - https://www.ams.usda.gov/market-news/search-market-news

If you would like further information or clarification on topics discussed in the crop comments section or would like to be added to our free email list please contact me at aaron.smith@utk.edu.

6

Friday, September 15, 2017 — Thursday, September 21, 2017

Commodity Contract Month Friday Monday Tuesday Wednesday Thursday

Soybeans Nov 9.68 9.67 9.65 9.70 9.70

($/bushel) Jan 9.79 9.78 9.76 9.80 9.81

Mar 9.87 9.87 9.85 9.89 9.90

May 9.95 9.95 9.93 9.98 9.98

Jul 10.02 10.02 10.00 10.04 10.05

Aug 10.03 10.02 10.01 10.04 10.05

Corn Dec 3.54 3.51 3.48 3.50 3.50

($/bushel) Mar 3.67 3.64 3.60 3.62 3.63

May 3.75 3.72 3.69 3.71 3.71

Jul 3.82 3.79 3.76 3.77 3.78

Sep 3.88 3.85 3.82 3.84 3.84

Dec 3.97 3.94 3.91 3.92 3.93

Wheat Dec 4.49 4.43 4.43 4.49 4.52

($/bushel) Mar 4.68 4.63 4.64 4.69 4.72

May 4.81 4.77 4.78 4.83 4.85

Jul 4.92 4.88 4.89 4.94 4.96

Sep 5.06 5.02 5.03 5.08 5.10

Soybean Meal Oct 308 309 305 306 309

($/ton) Dec 311 312 308 310 312

Jan 312 314 310 312 314

Mar 315 317 313 315 317

May 317 319 316 317 320

Jul 320 321 318 319 322

Cotton Oct 70.13 70.41 69.98 70.04 69.04

(¢/lb) Dec 69.07 69.50 69.27 69.25 68.25

Mar 67.99 68.90 68.30 68.51 67.58

May 68.48 69.31 68.77 69.03 68.17

Jul 68.86 69.67 69.23 69.50 68.69

Live Cattle Oct 107.75 107.57 107.97 110.95 110.10

($/cwt) Dec 112.82 112.95 113.40 116.25 116.20

Feb 116.75 116.50 117.17 119.05 119.25

Apr 118.70 119.35 119.87 121.42 121.50

Jun 111.95 112.17 112.40 113.82 114.20

Feeder Cattle Sep 150.22 150.80 151.57 153.97 153.17

($/cwt) Oct 150.65 151.95 152.80 157.27 155.87

Nov 150.72 152.20 153.12 157.55 156.82

Jan 147.52 148.97 149.75 153.07 153.17

Mar 145.37 146.35 147.02 149.72 149.65

Apr 145.52 146.57 147.12 149.65 149.62

Market Hogs Oct 60.97 60.00 60.12 58.65 57.32

($/cwt) Dec 58.47 58.05 59.72 59.92 57.80

Feb 64.10 63.65 64.37 64.50 62.87

Apr 68.90 69.10 69.90 70.10 69.07

May 74.20 74.70 75.57 75.77 75.42

Futures Settlement Prices: Crops & Livestock

7

Cattle Receipts: This week: 10,053 (11) Week ago: 8,109 (10) Year ago: 8,175 (11)

This Week Last Week Year Ago

Low High Weighted Average Weighted Average Weighted Average

—————————————————————— $/cwt ——————————————————————

Steers: Medium/Large Frame #1-2

300-400 lbs 145.00 185.00 166.63 170.18 142.65

400-500 lbs 140.00 175.00 156.10 156.95 130.99

500-600 lbs 129.00 160.00 145.45 149.52 123.25

600-700 lbs 125.00 154.50 142.39 141.76 118.83

700-800 lbs 120.00 150.00 137.08 135.63 118.74

Steers: Small Frame #1-2

300-400 lbs 110.00 142.50 129.59 ——— 125.72

400-500 lbs 112.50 149.00 138.59 133.55 ———

500-600 lbs 110.00 130.00 120.99 124.93 99.51

600-700 lbs 102.00 122.50 112.15 117.57 ———

Steers: Medium/Large Frame #2-3

300-400 lbs 120.00 168.00 147.14 144.85 128.68

400-500 lbs 123.00 154.00 143.23 139.45 119.97

500-600 lbs 110.00 147.00 133.84 136.09 113.63

600-700 lbs 115.00 136.50 127.14 124.79 107.83

700-800 lbs 110.00 135.00 121.09 118.70 100.78

Holstein Steers

300-400 lbs 65.00 99.00 83.38 ——— ———

500-600 lbs ——— ——— ——— ——— ———

700-800 lbs ——— ——— ——— ——— ———

Slaughter Cows & Bulls

Breakers 75-80% 49.00 58.02 60.59 59.81 67.50

Boners 80-85% 60.81 63.14 64.23 50.50 73.00

Lean 85-90% 43.50 64.00 54.30 56.71 60.86

Bulls YG 1 75.00 93.00 83.62 87.74 84.54

Heifers: Medium/Large Frame #1-2

300-400 lbs 128.00 165.00 142.01 149.27 126.59

400-500 lbs 124.00 158.00 138.17 140.03 115.93

500-600 lbs 118.00 151.00 132.13 132.74 110.73

600-700 lbs 112.50 138.00 126.72 126.29 106.04

Heifers: Small Frame #1-2

300-400 lbs 120.00 132.50 123.85 126.88 100.88

400-500 lbs 110.00 134.00 126.00 122.58 101.67

500-600 lbs 100.00 128.00 117.65 116.34 86.67

600-700 lbs ——— ——— ——— ——— ———

Heifers: Medium/Large Frame #2-3

300-400 lbs 110.00 151.00 126.37 128.09 113.57

400-500 lbs 115.00 140.00 126.15 127.94 105.12

500-600 lbs 109.00 135.00 120.28 122.92 99.59

600-700 lbs 108.00 126.00 115.87 117.28 95.46

Prices on Tennessee Reported Livestock Auctions for the week ending September 22, 2017

8

Friday, September 15, 2017 — Thursday, September 21, 2017

Friday Monday Tuesday Wednesday Thursday

Low High Low High Low High Low High Low High

———————–——————————————— $/bushel ———————————————————–———

No. 2 Yellow Soybeans

Memphis 9.74-9.74 9.67-9.67 9.65-9.73 9.74-9.78 9.77-9.82

N.W. B.P. 9.62-9.74 9.55-9.62 9.49-9.62 9.58-9.72 9.57-9.78

N.W. TN 9.33-9.43 9.28-9.32 9.26-9.32 9.30-9.36 9.31-9.35

Upper Md. 9.48-9.58 9.48-9.58 9.46-9.55 9.50-9.60 9.50-9.61

Lower Md. 9.29-9.38 9.28-9.38 9.26-9.35 9.30-9.40 9.31-9.40

Yellow Corn

Memphis 3.34-3.40 3.25-3.31 3.22-3.33 3.24-3.32 3.24-3.36

N.W. B.P. 3.26-3.32 3.16-3.21 3.13-3.18 3.15-3.20 3.19-3.20

N.W. TN 3.24-3.29 3.15-3.21 3.11-3.18 3.13-3.20 3.13-3.20

Upper Md. 3.19-3.35 3.16-3.31 3.13-3.28 3.15-3.20 3.15-3.20

Lower Md. 3.55-3.64 3.52-3.64 3.48-3.58 3.50-3.60 3.55-3.60

Wheat

Memphis 4.24-4.24 4.18-4.18 4.18-4.18 4.24-4.24 4.27-4.27

Prices Paid to Farmers by Elevators

100

120

140

160

180

200

220

Tennessee 500-600 lbs. M-1 Steer Prices2016, 2017 and 5-year average

2011/2015 Avg 2016 2017

85

105

125

145

165

185

Tennessee 700-800 lbs. M-1 Steer Prices2016, 2017 and 5-year average

2011/2015 Avg 2016 2017

8595

105115125135145155

5-Area Finished Cattle Prices2015, 2016 and 5-year average

2011/2015 Av g 2016 2017

35455565758595

105

Tennessee Slaughter Cow PricesBreakers 75-80%

2015, 2016 and 5-year average

2011/2015 2016 2017

9

Athens Stockyard - September 20, 2017 Reporting TN loads only 1 load of steers; Blk/Bwf ; est. wt. 640 lbs.; $162.50 1 load of steers; Blk/Bwf; est. wt. 850 lbs; $149.00 1 load of heifers; mixed; est. wt. 550 lbs.; $152.75 Mid-South Livestock - September 18, 2017 1 load of 60 steers; avg. wt. 861 lbs.; $144.10

East Tennessee Livestock Center, Sweetwater, TN Graded Holstein Sale Weighted Average Report for Friday Sep 15, 2017 Cattle Receipts: 737 Holsteins https://www.ams.usda.gov/mnreports/nv_ls182.txt

9/19/17 TN Livestock Producers Fayetteville Receipts: 563 (271 graded & grouped) Steers: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 159.00 300-400 lbs 135.00-145.00 400-500 lbs 155.00-165.00 400-500 lbs 129.00-138.00 500-600 lbs 149.00-157.00 500-600 lbs 124.00-134.00 600-700 lbs 144.00-153.50 600-700 lbs 123.50-128.50 700-800 lbs 134.00 700-800 lbs 119.50-126.00 Bulls: Med & Lg 1-2 400-500 lbs 139.00-148.00 500-600 lbs 128.00-136.00 600-700 lbs 124.00-127.00 700-800 lbs 121.00 9/19/17 Somerville Livestock Sales Receipts: 309 Steers/Bulls: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 140.00-165.00 300-400 lbs 130.00-152.00 400-500 lbs 134.00-157.00 400-500 lbs 132.00-147.00 500-600 lbs 131.00-151.00 500-600 lbs 125.00-142.00 600-700 lbs 117.00-122.00 600-700 lbs 116.00-126.00 700-800 lbs 101.00-109.00 700-800 lbs 124.00 800-900 lbs 100.00-103.00 Value Added Value Added Steers/Bulls: Med & Lg 1-2 Heifers: Med & Lg 1-2 450-500 lbs 160.00 500-550 lbs 136.00 500-550 lbs 141.00-152.00 550-600 lbs 135.00-137.00 550-600 lbs 141.00-148.00 700-800 lbs 132.00 600-700 lbs 138.00-145.00 700-800 lbs 138.50

Video Sales Self-Reported and Self-Graded Livestock Markets

9/18/17 Morris Brothers Stockyard, Pikeville, TN Receipts: 63 Last Week: 112 Last Year: 131 Steers: Heifers: 500-549 lbs 125.00 300-349 lbs 100.00-141.00 Over 799 lbs 112.00 350-399 lbs 130.00-133.00 400-449 lbs 127.00 Holstein Steers: 450-499 lbs 116.00-139.00 800-899 lbs 73.00 500-549 lbs 124.00-125.00 550-599 lbs 98.00-128.00 Bulls: 600-699 lbs 125.00 350-399 lbs 142.00-155.00 700-799 lbs 122.00 400-449 lbs 113.00-143.00 Over 799 lbs 65.00-110.00 500-549 lbs 125.00 550-599 lbs 108.00-132.00 600-699 lbs 124.00-127.00 800-999 lbs 77.00

Video Board Sale and Graded Sales

Self-Reported and Self-Graded Livestock Markets

10

Understanding feeder cattle price slides Derrell S. Peel

Oklahoma State Univ. Extension Livestock Marketing Specialist

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. Not only do prices vary across cattle weights but the size of the price adjustment depends on the weight of the cattle. Price slides are a measure of the amount of price adjustment as weight changes from a base weight.

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 also useful for producers to evaluate price changes for the weight gain of calves in a preconditioning or short background-ing program or perhaps the additional weight from creep feed-ing calves. Prices slides are often stated in terms of traditional rules of thumb, e.g. a 10 cent slide on calves or a 6 cent slide on yearlings. 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.

Price slides depend on the price level and thus are more accu-rately stated as a percent of the base price. Table 1 shows an-nual average and month-ly average price slides for selected weights of steers and heifers. It is apparent that price slides are not only differ-ent for different weights but also vary for steers and heifers and at differ-ent times of the year. As an example of how to use these price slides, suppose the base price of 575 pound steers is $150/cwt. The annual average price slide is 6.7 percent which results in

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a price adjustment of $10.05/cwt. 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). In this example, the price slide is close to the tradition-al 10 cent slide. However, while the percent price slide is con-stant, the absolute price adjustment depends on price lev-el. Thus, the 575 pound steer would have a price slide of $8.04/cwt. if market price was $1.20/cwt. or $12.06/cwt if the market price was $180/cwt.

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 feed-ers. It is also apparent that price slides for both steers and heif-ers vary across months. Price adjustments can be fine-tuned using the monthly average price slides. In general, price slides are relatively constant across months for light weight calves and for the heavy feeders. Price slides in the middle feeder weights (575-725 pounds for steers, 550-700 pounds for heif-ers) have wide variation across months. 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 expressed in percentages adjust automatically and appropriately to changing market prices. Understanding price slides can help producers improve cattle marketing and evalu-ate feeder cattle production alternatives.

Department of Agricultural and Resource Economics 314 Morgan Hall • 2621 Morgan Circle

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