Market Report - January 16, 2022

Ross Bronson, Ag Risk Consultant, Redd Summit Advisors

Cattle Market Report:

Some thoughts as we come into the new year. I have been reading a lot of futures brokers with varying ideas about what is ahead. I disagree with some and agree with others. I think that a lot of them miss out on some “on the ground” industry information. Even if they have it, they may not have the production background to interpret what that might mean. I am not saying I am right; I am just saying this is what I see and think.

The number of heifers being sold this year may influence how high prices get. Until we move into re-stocking phase many ranchers will be selling 20-30% more heifers than on an average year. I still anticipate higher prices this year. Forecasts are indicating higher-than-average precipitation in the pacific northwest and average precipitation in the northern great plains for the next six months. While the southwest and southern great plains are forecasted to be dryer than average, I still hold to the opinion that most ranchers have culled as much as they will or can afford. I do not see cull cows being a large driver in the market past spring. I believe that cattle feeders will start getting anxious for cattle soon, as their current inventory starts to work its way through. There will be pushback from buyers for a few months, but I believe those with calves to sell in the next three to four months will have some negotiating power.

In general, I recommend holding what breeding cows you have. In my opinion we should see prices beginning their upward trend by fall. If you can keep females or retain heifers without sacrificing your rangeland, I recommend it. They will be high in price in the not-so-distant future.

Grain Market Report:

Things are looking positive on the grain front. Moisture continues to help with barge traffic, and international concerns are looking more positive, for now. Harvest in the Midwest seems to be going well with minimal setbacks. This has driven wheat prices, in particular, down since the first of the year. Corn is back up to where it was before the new year and soybeans as well. Inventory reports are set to come out toward the end of January. In addition, eyes will continue to be on Ukraine/Russia, China’s need for commodities returning, and South American weather.  

Sheep Market Report:

Sheep markets continued lower trends. Hamilton and Fredericksburg were lower. San Angelo was $5 lower, but Goldthwaite was up. New Holland had no trend to speak of. The USDA estimated domestic lamb and mutton meat production for the week ending January 7th totaled 1.66 million pounds on a 26,000 head slaughter this week compared to 1.69 million pounds and 26,000 head the previous week.

Hay Market Report:

As would be expected this time of year, trading in general is light. Weather has slowed shipping, especially in California which seems to be feast or famine when it comes to precipitation. Exports are still slow and there seems to be sellers showing interest in negotiation on prices. I know here close to me a lot of hay has come on the market since the first of the year and it doesn’t seem to be selling aggressively and prices are $10 lower a ton. The strong beginning to winter moisture is helping a lot of people feel more calm about hay prices and availability.