Corn and feeder cattle price connection 

William Secor, Ph.D. University of Georgia Department of Agricultural & Applied Economics

July 8, 2024

The ups and downs of summer weather are upon us affecting a host of agricultural markets. The focus of this note is looking at how feed costs can affect cattle markets, specifically corn prices. 

In general, if growing conditions are worse than expected (e.g., a drought), corn prices increase because markets anticipate a smaller than expected crop. In contrast, if growing conditions are better than expected (e.g., ideal weather), corn prices will fall because markets anticipate a larger than expected crop. 

For the cattle sector, as corn prices increase, the cost to feed cattle increases. This means that the price feedlots are willing and able to pay for feeder cattle declines, which pushes down feeder cattle prices. The opposite holds true if corn prices drop. As corn prices increase, feeder cattle prices drop or do not increase. As corn prices decrease, feeder cattle prices tend to increase or hold steady. 

Over the last year, corn prices have dropped. This has been supportive of feeder cattle prices. However, since the beginning of the year, corn prices have largely been flat. Currently, feeder cattle prices have been hovering around the same levels since mid-April. For 500-600 lb feeder steers prices in early June were around $305/cwt, while 500-600 lb heifer prices were around $254/cwt. 

These will likely remain flat to decline into the fall as spring-born calves enter sale barns. The risk arises from any production concerns this growing season that may increase corn prices. This could intensify any seasonal decline in feeder cattle prices through the fall. 

June 2023 

Southern Livestock

More News

Marketing

Weighing the Market

Bullish market fundamentals continue Cattle markets were seasonally sluggish in mid-July, but prices remained at or near record-high ...
Crop and Weather

Texas Crop and Weather Report July 9, 2024

AgriLife Extension district reporters compiled the following summaries: Central The district reported hot conditions most of the week with scattered ...
Production

How much water do cattle need and what water problems should cattle producers expect?

Water quantity and quality is critical to cattle health and performance.  Hot weather and drought conditions can impact ...
Marketing

Is it time to cull the mature female and replace her with a heifer?

I had a discussion recently concerning selling older cows and replacing them with bred heifers. This is an ...
Cover Story

Livestock, humans at risk of painful bites as horse fly populations increase

Be on the lookout for an especially nasty and tenacious biting insect pest – the horse fly – ...
Herd Health

Dealing with cattle herd anaplasmosis

“Summertime brings factors that lead to anaplasmosis in cattle operations,” says Patrick Davis, University of Missouri Extension livestock ...