Counter-Seasonal Pattern Seen
For Slaughter Cattle Prices

By Donald Stotts
Oklahoma State University

STILLWATER, Okla. — Placement numbers for cattle on feed during recent months suggest a counter-seasonal pattern for fed cattle prices in 1998, says an Oklahoma State University agricultural economist.

"On a quarterly average basis, fed cattle prices posted in the first quarter could be the lowest of the year, then prices generally could trend higher for the balance of 1998," says Derrell Peel, OSU Cooperative Extension livestock marketing specialist.

Livestock Information Center Data indicates fed cattle prices averaged higher during the second quarter, April through June, than during the first, January through March, in only three years since 1985: 1987, 1988, and 1997.

Only 1986 and 1996 recorded higher average prices for the summer quarter, July through September, than for the second quarter during the same time period.

Typically, fed cattle prices are higher during the fourth quarter, October through December, than during the summer months.

"That should be true again this year," Peel says. "However, the fourth quarter has posted the highest average price of the year only five times since 1985. We could well see that again in 1998."

Other years in which the fourth quarter posted the highest average price of the year were 1985, 1986, 1990, 1992, and 1997.

"Overall, the near-term supply of cattle on feed remains large, with most of those cattle being heavier-weight animals," Peel says. "This front-end supply must decline before cash fed cattle prices can increase very much."

Peel says USDA statistics indicate that lower placements should begin to reduce fed cattle marketings compared to a year earlier as the spring quarter progresses.