![]() ![]() This equation determines the price per pound of feeder cattle, where the price is dependent upon the independent variables of feeder cattle weight, corn price, and December Fed Cattle Futures price. Where: P is October feeder cattle price ($/cwt), W is steer weight, P corn is the annual average price of corn ($/bu), and P Fed is the December Fed Cattle Futures price as reported in October onl y ($/cwt). To evaluate interactions among corn price, fed cattle price, and the price slide, we completed an ordinary least squares regression analysis using the following equation for the feeder cat tle price: This price difference is due to the first 775 pounds of the heavier 875 pound steer taking a $0.06 discount per pound due to the price slide ($1.40 - $1.34). How is that number determined? The 875 pound steer is worth $1,172.50 (875 pounds × $1.34/pound) whereas the 775 pound steer is worth $1,085.00 (775 pounds × $1.40/pound). How much more is the 875 pound steer worth compared to the 775 pound steer? Is it worth $134 more (100 pounds × $1.34 per pound)? No, the correct answer is actually $87.50. An understanding of the price slide can help producers make more informed management decisions specifically in regards to target weights at the anticipated time of sale for yearlings.įrom Figure 1, a steer weighing 775 pounds receives an average price of $140 per cwt, and a steer weighing 875 pounds receives an average price of $134 per cwt. If the price slide disparity is large enough it can have a substantial impact on an operation’s annual net revenues (Windh, 2019). ![]() The magnitude of a price slide is affected by factors similar to those influencing general cattle market prices: corn price, expectations of fed cattle price, cattle-feeding margins, and seasonality (Dhuyvetter & Schroeder, 2000). ![]() The price slide is a price-weight relationship in which lighter cattle sell for a higher price per pound (or cwt) compared to heavier cattle (Figure 1). The price slide is one key component of market price dynamics, and it can be included in the terms of sale for forward price contracts of yearling stockers (Ritten et al., 2018). Products, livestock inventory numbers (cow herd size), and corn price (Hamilton & Kastens, 2000 Dhuyvetter & Schroed er, 2000). Factors impacting steer market prices include: supply of beef slaughter animals, consumer demand for beef This price is dynamic and heavily influenced by supply and demand at different levels within the beef industry. The market price received when yearling stockers are sold as feeder cattle to feedlots is one of the most variable and uncertain factors facing ranching operations. Yearling stockers are sold as feeder cattle, and this sale generates the majority of annual net revenue for yearling stocker en terprises. The date livestock are removed from pasture can be adaptively managed based on ecological conditions (e.g., drought and vegetation residual levels) and livestock market conditions. In a typical year, these cattle are turned out to pasture and graze from spring (mid-May) to fall ( September/October). Yearling stockers can provide both ecological and economic flexibility. However, yearling stocker enterprises can also occur as stand-alone or in combination with an existing cow-calf operation. Cow-calf operations typically come to mind when one thinks about ranching in the west. ![]()
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