![]() ![]() ![]() For the year, prices for 700-800 pound steers in Kentucky averaged about $136, just a couple of percent lower than a year earlier. ![]() But by late November and early December, feeder steer prices recovered to the mid-$140s, yielding a fourth quarter average nearly 27% higher than a year earlier. Prices for heavier weight feeder steers followed a pattern similar to that of steer calves in 2017 with prices for 700- 800 pound steers in Kentucky during January averaging near $121 per cwt., more than 20% below January 2016. Despite the price recovery in late 2017, weakness early in the year led to an annual average price of $149 per cwt., which was about 3% lower than in 2016. However, by late November and early December 2017, prices for the same weight steers had recovered to average in the low $150s per cwt., more than 20% above a year earlier. During January prices for 500-600 pound Kentucky steers averaged just less than $130 per cwt., 27% below the January 2016 average. Examining prices for steer calves and feeder steers in the eastern Corn Belt helps illustrate how large the price swings were over the last 12 months. Understanding price slides can help producers improve cattle marketing and evaluate feeder cattle production alternatives.Prices for calves and feeder cattle started 2017 sharply lower than a year earlier but by year-end, prices were well above those of 12 months prior. Price slides expressed in percentages adjust automatically and appropriately to changing market prices. For example, 675 pound steers have an annual average price slide of 4.0 percent which varies from 8.2 percent in March to essentially zero in October. Price slides in the middle feeder weights (575-725 pounds for steers, 550-700 pounds for heifers) have wide variation across months. In general, price slides are relatively constant across months for light weight calves and for the heavy feeders. Price adjustments can be fine-tuned using the monthly average price slides. It is also apparent that price slides for both steers and heifers vary across months. It is evident from Table 1 that the percent price slide for heifers is generally lower compared to steers for the lighter weights but is roughly equal to the steer price slide for heavy feeders. or $12.06/cwt if the market price was $180/cwt. Thus, the 575 pound steer would have a price slide of $8.04/cwt. However, while the percent price slide is constant, the absolute price adjustment depends on price level. In this example, the price slide is close to the traditional 10 cent slide. If the steer actually weighs 30 pounds more or 605 pounds, the price would be adjusted down by $3.02/cwt ($10.05 x 0.3 cwt.) to $146.98 ($150-$3.02). The annual average price slide is 6.7 percent which results in a price adjustment of $10.05/cwt. As an example of how to use these price slides, suppose the base price of 575 pound steers is $150/cwt. It is apparent that price slides are not only different for different weights but also vary for steers and heifers and at different times of the year. Table 1 shows annual average and monthly average price slides for selected weights of steers and heifers. Price slides depend on the price level and thus are more accurately stated as a percent of the base price. The price volatility of recent years has shown that these rules of thumb using absolute levels are inadequate to accurately capture price adjustments over a wide range of price levels. a 10 cent slide on calves or a 6 cent slide on yearlings. Prices slides are often stated in terms of traditional rules of thumb, e.g. Price slides are also useful for producers to evaluate price changes for the weight gain of calves in a preconditioning or short backgrounding program or perhaps the additional weight from creep feeding calves. Price slides have a number of uses, the most common of which is adjusting the price of forward contracted cattle if actual weight is different from the specified base weight. Price slides are a measure of the amount of price adjustment as weight changes from a base weight. Not only do prices vary across cattle weights but the size of the price adjustment depends on the weight of the cattle. Feeder cattle prices depend on the weight of the cattle with lightweight cattle typically having the highest price per pound (or hundredweight) and lower prices for heavier cattle. ![]()
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