Feeder cattle prices for critters light enough to turn out on grass were up $1-$3 at the local auctions last week. There is no way you can pencil probable fall cattle prices, when they come in off the range, and other input costs, and make them show a profit at these prices.
What former Fed Chairman Alan Greenspan called "irrational exuberance" is at play here. There's been rain, and good winter moisture, in enough places to create very good spring grazing conditions. Once ranchers see that grass, they just have to have something to turn out on it. They head to the sale barn, bid against each other for cattle, and drive up prices. It's great for cattle sellers, but maybe not so great for buyers.
A lot can happen between now and the fall cattle marketing season. A grain glut could drop prices. Cattle numbers could be shorter than USDA is estimating, creating higher fall prices than is currently predicted due to a cattle shortage. Bad weather could wipe out some cattle, or create drought that will force cattle to be sold early--elongating the marketing cycle.
Buying spring grass cattle is a big crapshoot in the best of years, and more than that this year. There will be winners and losers, as there always are, and it's too early to predict who those will be.
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