SPRING HILL, Tenn. – Despite feeder cattle market uncertainty, the slaughter cow and bull market continue to demonstrate strength, according to a University of Tennessee agricultural economist.

“The price of these animals is seasonally strengthening as is typical,” said Andrew P. Griffith, University of Tennessee assistant extension professor of agricultural economics. “There is no reason to think they will decline prematurely as the demand for lean grinding beef continues to drive the market.

“If anything, the slaughter cow and bull market may remain elevated longer than is typical if the demand for lean grinding beef remains strong,” he added. “As uncertainty mounts across commodity markets, producers should take advantage of anything the market is offering.”

He said April tends to be a strong month for finished cattle prices, but spring prices are unlikely to rival the weekly high of $143.21 set at the end of February.

“Cattle feeders will be looking to take advantage of whatever leverage they can gain on the packer,” he said, “but with prices failing to meet expectations, cattle feeders may have to simply bid lower for feeder cattle. This is certainly a concern for downstream players.”

Based on Tennessee weekly auction market reports, he said steer prices the week of April 3 were steady to $3 lower, compared to a week ago, while heifer prices were steady to $4 lower, compared to the previous week.

“Slaughter bull prices did soften that particular week, but prices have been seasonally strengthening,” he said. “What happened to all of the positive expectations for feeder cattle prices during the summer and fall months? The bullish expectation has turned bearish because of uncertainty. The market is uncertain how the Russia and Ukraine conflict will impact global grain.

“What will Brazilian corn production total?” he added. “Continued drought could influence corn planting and production domestically, high retail beef prices could influence beef movement, and the list could continue.”

He said, “The point is that most of the fundamental factors that once were pushing feeder cattle prices higher have been flipped on their head and are now putting pressure on cattle prices.

“These circumstances do not negate the long-term bullishness of cattle markets that would indicate stronger cattle prices the next few years,” he said.

“However, these circumstances certainly influence the short-term price situation,” he added. “The problem with evaluating the short-term is that it is nearly impossible to know when conditions will change and shift the short-run expectations.”

He said a lot of people have been asking him recently if they should go ahead and market calves now that they had planned to wean, precondition, and market sometime during the summer.

“The underlying question or questions is if cattle prices will increase, decrease, or stay the same – and what is it going to cost to feed and grow those animals?” he said.

“Using today’s information of higher corn and feed prices, the expectation of producers using less fertilizer resulting in reduced forage production and cattle markets in flux, it would be difficult to tell anyone it is worth the risk of forgoing a $900 to $1,000 per head pay day with considerable uncertainty for a future pay day,” he added.

But he said, “On the other side of the coin, cattle market expectations for summer could reverse course and begin strengthening again, which would make backgrounding these calves extremely lucrative.

“A bird in the hand may seem better than two in the bush, but it is hard to ignore the two in the bush,” he said. “Producers should put pencil to paper and evaluate the risk of prices moving in an advantageous direction.”