SPRING HILL, Tenn. – Heifer prices dropped the last week in June, while steer prices were on the rise, said Andrew P. Griffith, University of Tennessee professor of agricultural and resource economics.

“The price change is really just relative to the previous week’s price,” he told Farm World when asked how dramatic the price changes were, and how significant is this to producers. “I would hate to say they are tremendously different as week-to-week variability is dependent on several factors, including cattle quality and demand for certain classes of cattle that specific week.

“My thought is that cow-calf producers will begin retaining heifers, and they will retain the highest quality females,” he said. “This means those females will not be working their way through the auction market, and thus, the feeder cattle system.”

He added, “The producers who are impacted the most are those who typically purchase heifers to grow and feed. This may make it more difficult to put together a pen of good quality heifers, compared to previous years.”

He said, however, in his recent market outlook this price trend is difficult to understand: “One would think the price discount of heifers to steers would narrow at auction markets as producers prepare to expand the cattle herd by breeding heifers due to a higher demand for heifers.

“However, just the opposite may end up being the result as many cattle producers will retain their best heifers to grow the cattle herd, which will likely result in the average quality of heifers coming through the market being lower than when more heifers are making their way to the market,” he added.

He said, “Either one of these arguments are justifiable. What cannot be argued is what load a lot of breeding-age females are trading for, whether they are headed to the feedlot, or back to a farm to be bred.”

For example, he said, a group of 850-pound heifers traded for $220 per hundredweight the previous week in Tennessee, which is a total value of $1,870 per head.

“This raises the question of what it will take to get these females bred and produce a calf on a dollar basis,” he said. “Technically, an 850-pound heifer is ready to breed in most cases. However, summer heat is not conducive to getting a female bred, which means most of them would not get bred until the fall time period, and thus, produce a calf in the middle of next summer.”

He said many producers would wait to breed these females during the winter and have a fall-calving female.

“At the earliest, the quickest such a female could produce a marketable calf would be December 2025,” he said. “Alternatively, a female that is already bred to calve this fall would produce a marketable calf by April or May 2025.”

When asked what the recent trends have been, he told Farm World, “It is fairly typical for heifer prices to increase more than steer prices when herd expansion begins, but one has to remember to compare apples to apples. If a good quality heifer is $10 behind steers during the contraction phase of the cattle herd, then that same animal tends to see less of a discount in herd expansion years.

“However, if one is simply looking at aggregated data (information about particular groups based on specific demographic or behavioral variables) from auction markets, the reverse may be true in that heifers see a larger discount to steers,” he added. “This is because the average quality of heifers moving through the auction markets tends to decline when herd expansion occurs.”

He said packers and cattle feeders are doing the best they can right now to work toward an agreeable market price.

“For some reason, there are people who think the government should get involved, which seems ludicrous to me,” he said. “Packer and feeders are using several methods to agree on a price. They know their business better than anyone else, and should be able to conduct business without others overstepping their bounds.”