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Calf pricesare at “unprecedented levels," says John Anderson, deputy chief economist for the American Farm Bureau Federation, Washington. "This year, we saw prices drop through spring and bottom out in early summer, followed with a really strong market through the fall. To a large extent, that’s a reflection of the market’s reaction to tight numbers and a decline in corn prices. As corn prices have come down, it has provided support for calf prices.”
WILLIE HUDNELL, from left, Brenda Adair, Rachel Jones, and Lamar Boren, all from Meridian, Miss., were among those attending the annual convention of the Mississippi Farm Bureau Federation.
Corn price drop a plus
Calf prices, Anderson says, are at “unprecedented levels. This year, we saw prices drop through spring, bottom out in early summer, followed with a really strong market through the fall. To a large extent, that’s a reflection of the market’s reaction to tight numbers and a decline in corn prices. As corn prices have come down, it has provided support for calf prices.”
In 2012, he says, “We were looking at large plantings of corn, a fantastic early season situation, and crop progress numbers that were eye-popping. We were bidding up calves, thinking corn was going to be cheap. Then the drought came along, and corn prices really took off, which dropped the cattle market to a lower level, where it mostly hung for the rest of the year.
“This year has been almost a mirror image of last year’s feeder cattle picture. We started out with a terrible situation; planting progress was slow, prevented planting acres were expected to be in the millions, and we were going to be in real trouble — a multi-year bad weather pattern, basically gloom and doom, that kept corn prices up and put a lot of pressure on calf prices.
“Now, we’re looking at a pretty strong market. We’ve kinda topped out — mainly a reflection of what’s going on with wholesale beef prices. We’re having a hard time moving up to a much higher level, so everyone’s kinda holding what they’ve got and waiting to see what moves next.”
Last January, Anderson says, “We had about 2 percent more heifers than had been held back as replacements, but the numbers suggest to me that very few of those heifers actually made it into a herd. They ended up going into feedlots and coming out in the middle of the year.
“We had an interesting expansion last fall, but there didn’t seem to be much follow-through on it. If we look at feedlot places, beef production, and heifer slaughter, most of these eventually ended up on somebody’s plate.”