1/16/2024 0 Comments November 2019 feeder cattle prices![]() Given the current strong forecast for U.S. For 2007-2011 he found overall feeder cattle prices were less responsive to changes in corn prices than historically thought. Feuz wanted to examine a historical idea that a $0.10 decrease in corn prices resulted in a $1/cwt increase in feeder cattle price. ![]() Several years ago, Dillon Feuz wrote an article for In the Cattle Markets on the relationship between corn and feeder cattle prices. This assumes that all other factors have remained constant, including other feeding costs as well as fed-cattle price. This means, as the price of corn increases, the price of feeder cattle decreases. ![]() The corn price has typically had an inverse relationship to both fed and feeder cattle prices. Historically feeder cattle prices have been determined by several factors, with corn price and fed-cattle price having the greatest impact. This form is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.– Brenda Boetel, Professor, Department of Agricultural Economics, University of Wisconsin-River Falls Spam protection has stopped this request. However, we know that cattle prices are certainly paying attention to the corn market and research suggests that any continued corn price weakness can help to provide support for feeder cattle prices. While feeder prices have been on an uptrend over the past month, it can’t be simply attributed to lower corn prices alone. It is impossible to disentangle the relative impacts of factors affecting real-time price changes. So a decline from $4.00/bushel corn to $3.60/bushel would suggest a feeder price increase from $150/cwt to $152.70/cwt. To put their findings into a current context, what might a ten percent decline in corn prices imply for feeder cattle prices? It would suggest a 1.8 percent increase in feeder cattle prices. Further, they found that feeder prices have become more responsive to corn prices since 2008. Using monthly data, they found that a one percent increase in corn price reduces feeder cattle prices by about 0.18 percent. feeder cattle) can increase without increasing the total cost to produce a fed animal.Ī 2017 study by Tonsor and Mollohan at Kansas State University (available here) highlights this relationship and estimates the impact that a change in corn price has on feeder cattle prices. cost of gain) declines, the price of the other input (i.e. The inverse relationship exists because corn (feed) and feeder cattle are the two major inputs into the production of fed cattle. This relationship assumes that all other factors that affect price remain constant such as other feeding costs and live cattle price. In other words, as the price of corn decreases, the price of feeder cattle increases. Just 18 trading days later, it closed Monday at a contract low of $3.77.Ĭorn price is assumed to have an inverse relationship with feeder cattle prices. The December 2018 corn futures contract price hit $4.26 on May 23rd – its highest level since July 2017. Both nearby and new crop corn futures prices have tumbled by over 40 cents or approximately ten percent. – Josh Maples, Assistant Professor, Department of Agricultural Economics, Mississippi State UniversityĬorn prices have been on a sharp downtrend since late May due primarily to a combination of trade uncertainty and a strong start to the growing season. Originally posted in the BEEF Newsletter, June 27,2018
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