Summer doldrums creeping into cattle prices

It is a well known fact that when the cows and calves go out on the summer grazing until September, cattle prices level out, or even go in the tank. There is no significant marketing activity until fall. Many auction markets don't even have sales in the summer, or go on a monthly or biweekly schedule.

Fed cattle at the feedlots were $1-$2 lower last week, and feeder cattle futures crashed on the Chicago Mercantile Exchange. Early last week, before the futures crash, feeder cattle were $1-$2 higher at the local auctions. Later week sales were barely steady.

High feed and energy prices make it dicey whether feeder cattle at the current prices will pencil in the fall, when the cattle come in off the summer grass and are sold. Some analysts have been predicting lower feeder cattle prices for weeks, as a result. Such predictions may finally be coming true. The main summer marketing activity are the big video auctions, for fall delivery. Such prices are usually better than what the fall market proves to be and ranchers were usually smart to sell on the summer video.

Last week's first of the season video event started strong, but dropped noticeably once the the Merc feeder cattle futures tanked. Whether this was a one time occurance, or a harbinger of things to come, remains to be seen.

Cattle numbers are down, due to drought, range fires and bad winter weather a couple of years ago. A lot of cows have been slaughtered, and the calf crop was down. This may well keep feeder cattle prices up, despite feeder and fuel costs, but it may well be into fall before we find out.

It will be an interesting summer for market watchers.