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Feeder cattle Seasonal Price trends

Feeder cattle Seasonal Price trends. Dr. Curt Lacy Extension Economist-Livestock. Objectives. Show that cattle prices USUALLY move in a predictable pattern. Show that the patterns vary with the class of cattle. Explore the factors that can affect these seasonal trends.

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Feeder cattle Seasonal Price trends

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  1. Feeder cattle Seasonal Price trends Dr. Curt Lacy Extension Economist-Livestock

  2. Objectives Show that cattle prices USUALLY move in a predictable pattern. Show that the patterns vary with the class of cattle. Explore the factors that can affect these seasonal trends.

  3. Prices Usually Follow Some Predictable Pattern

  4. Using Seasonalities to Market Cattle • Beef cattle prices usually follow a seasonal trend. • These trends are USUALLY fairly predictable. • We can use these seasonalities to estimate anticipated cash prices: • Decide on a future marketing date. • Decide if we want to pre-price now. • Decide if we want to sell now as opposed to stockering or feeding.

  5. Two ways to use seasonal information in predicting a price Seasonal prices Buy-sell margin

  6. Seasonal Prices Dollar values Averages Usually predictable However, major supply or demand shocks can disrupt these seasonalities.

  7. Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

  8. Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

  9. Different classes have different seasonalities Livestock Marketing Information Center Data Source: USDA/AMS

  10. Limitations with Seasonals Based on averages Not absolute However, the highs and lows tend to group toward certain months.

  11. Times Average Prices Were in the TOP 1/3 for the Year, 2006-2010

  12. Times Average Prices Were in the BOTTOM1/3 for the Year, 2006-2010

  13. Buy-Sell Margins Useful in stocker or feeder programs Difference in sales price and purchase price Usually negative Can be used to estimate expected sales price Very useful in determining potential profitability

  14. Time of Year is important in BSMFall Stockering Buy Here Sell Here

  15. BSM and Change in Value400-500 fall to 700-800 spring

  16. BSM and Change in ValueRetain 500-550 fall sell 800+ spring

  17. Summary Seasonal information can be very useful in making marketing decisions. The best or worst time of the year depends on the market class. Price is just part of profits. Your local market info trumps “state” info.

  18. Additional Resources www.secattleadvisor.com UGA Marketing Alternatives Calculator Buy-Sell Margins Calculator

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