Author: Andrew Griffith

In 2024 a GOAT is what they call the “Greatest Of All Time.” Despite all of the discussions of Olympians who may or may not be the greatest athletes of all time in their sport, it is also important to discuss the actual goat market. Goat production is big business in the Southern United States.

Figure 1 contains 35-50 pound and 51-65 pound selection 1 goats in Tennessee from January 2020 through July 2024. The variability in prices throughout a year is evident in that prices have typically had a $150 to $200 per hundredweight price range in a given year. Most of this is simply due to seasonality of prices, which is driven by basic supply and demand. The bigger storyline is what appears to be a softening of goat prices from the high prices seen in early 2022. 

The question at hand, what is causing the negative trendline in goat prices the past few years? It is difficult to blame lower goat prices on supply, because the January 1 inventory report for 2024 indicates there are 100,000 fewer goats than the same time in 2022. More specifically, all meat and other goats account for 90,000 head of that decline with the meat and other goat breeding herd down 68,600 head from 2022. This leaves the other side of the coin, which would be the demand side for goats and goat meat. There does not appear to be people leaving the domestic market that previously demanded goat meat. One logical explanation could be the softening economy and higher price of goat meat has rationed the product. It appears goat prices may continue to decline in the near term.

Figure 1. Tennessee Goat Prices from January 2020 through July 2024.

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Griffith, Andrew P. “Finding the GOAT.” Southern Ag Today 4(33.2). August 13, 2024. Permalink

In general, the only old things that have much value are those that are rare and in extremely good condition. For instance, a Rembrandt would be a good example of an old thing that has a lot of value, or a 40 series John Deere tractor would be another! However, slaughter cows would be an example of a fairly common thing that has a strong value in today’s market. Or, maybe they are not all that common since there has been tremendous herd liquidation due to drought the past couple of years.

Slaughter cow prices generally reach their seasonal price peak in late spring or early summer. They may or may not have already peaked, but that is of little concern given the extremely high price level. Cow condition does influence their total value from both a weight and price standpoint, but slaughter cattle in most any condition are bringing a high price due to the need for lean grinding beef. Specifically, the boxed cow beef cutout value has increased from just over $200 to $270 per hundredweight since the beginning of the year.

Figure 1 contains weekly slaughter cow prices in Tennessee for breaking grade cows. The price of this class of slaughter cows has increased in price by about $35 per hundredweight since the beginning of the year and are $20 per hundredweight higher than any point in 2023. Assuming a 1,200 pound cow, the total value has increased from $1,140 per head to $1,560 per head since the beginning of the year, which is a $420 per head increase. 

The value increase in slaughter cows is being driven by cattle producers hauling fewer of these animals to town, which is seasonally driven by calving season being in full force and the fact that many cattle producers have already culled deep into the cow herd. The value of slaughter cows should remain high for the next couple of years.

Figure 1. Slaughter cow prices for 2024, 2023 and the 5-year average.

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Griffith, Andrew P. “Diamond Rings for Old Things.” Southern Ag Today 4(20.2). May 14, 2024. Permalink

One article on cattle inventory just will not suffice given the extremely low inventory. This article will try to address the same question a bunch of college guys have at a party with no females. Where are all the girls? When will they get here? The values can be dissected in a number of ways, but being elementary may be the best route.

Total beef cow inventory was estimated to be down 716,000 head compared to the previous year with most of that decline coming from the Great Plains and the Southeast United States. This decline was largely drought influenced as widespread drought reduced late summer and fall forage production and resulted in many producers being forced to feed hay earlier than is typical. Thus, it is fairly easy to know where all the young girls are. One simply has to look at the quantity of heifers on feed. Clearly, the feedlot is where most of these young females reside. As it relates to more mature females, beef cow slaughter in 2023 tells most of the story for the beef cow herd. The industry has harvested a large quantity of beef cows.

Figure 1 contains information concerning the quantity of beef heifers retained for replacement. Heifers held as beef cow replacements have been extremely low for two consecutive years, which means it will be difficult to grow the beef cow herd much in 2024. In reality, most heifer replacement decisions will not be made by spring calving producers until the second half of the year and it will be two years before any of those retained females have a calf old enough to enter the feedlot.

The final thoughts here are that most females have been on a dinner plate, are on a dinner plate, or destined for a dinner plate. Cattle producers will begin to make heifer retention decisions. One would suspect there will be some aggressive decisions to retain females in the coming years, but significant retention will be slower than many may think.

Figure 1. Beef Heifers Held for Replacement

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Griffith, Andrew. “Where are the Girls?” Southern Ag Today 4(7.2). February 13, 2024. Permalink

Cattle markets finished October on a weak note with the CME Feeder Cattle Index around $237 per hundredweight. This price represents a $17 per hundredweight decline compared to the peak value, which occurred in September. However, the decline in prices is not the worst of it. The worst of it was that many cattle producers missed out on the opportunity to hedge cattle to be sold in the fourth quarter of 2023 and the first eight months of 2024 and will likely receive lower prices.

Traders and market participants clearly had high expectations for feeder cattle as can be seen in Figure 1 with most contracts finding their life of contract high in September. Most contracts are $20 to $30 off their contract high as of this writing with more weakness evident in the market. Despite a favorable opportunity to hedge the sale of cattle in September and early October, not all hope is lost. One could easily compare the Christmas tree in A Charlie Brown Christmas with cattle market prices, but most would look at it from the glass half empty perspective instead of the glass half full perspective. One could certainly sulk in the losses and the missed hedging opportunities, but one must remember that markets are still alive just like the Christmas tree Charlie Brown chose. This means there are opportunities for gains in the current market.

The first aspect to consider is that feeder cattle futures are still offering a favorable price to hedge the sale of feeder cattle through most of 2024. If a profitable price can be achieved with current futures prices, it could still be a wise move to secure those profits. If there is concern of missing out on larger profits if the market price strengthens, then there are strategies using put and call options to capitalize on a stronger market. The primary objective is to be an active marketer instead of passive.

Figure 1. Daily feeder cattle futures close price by contract month.

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Griffith, Andrew P. “A Charlie Brown Christmas for Cattle Prices.” Southern Ag Today 3(46.2). November 14, 2023. Permalink

To breed or to feed, that is the question? In an October 2022 article, bred heifer values for 2023 were discussed. The projected value for bred heifers in Tennessee during 2023 was between $2,400 and $2,600, which is exactly the value that many of the bred heifers traded for in the spring. The question now is if a producer should retain heifers from the spring calf crop for breeding or if they should set wheels under them for feeding.

Despite bred heifer values hitting the price projection this spring for fall calving females, it is beneficial to consider the expected value for those animals moving forward. Given the expectation that calf values will hold firm, the bred heifer value could reach $3,000 to $3,200 per head this fall and moving into late winter. Thus, should a producer retain those animals and breed them, or should the producer sell the female at weaning or as a yearling? A weanling 550 pound heifer in Tennessee is currently valued near $1,265 per head while a load of 750 pound black heifers is valued near $1,770 per head (Figure 1).

The answer to this question is not simple. Here are a few considerations. First, are the heifers being retained and bred to go back in the retaining producer’s herd or are they meant for resale? If they are meant for the retaining producer’s herd then calf price projections moving forward are important. If the females are meant to be sold then a producer needs to make sure they have a marketing outlet for those females. Second, it takes feed, capital, and labor resources to retain heifers. If any of these are in short supply then critical pencil and paper work need to be done. Third, is it worth the risk to forgo the calf or feeder cattle value to breed females?

In closing, the demand for bred heifers or bred females, in general, is regional at this point. Some regions do not have the hay and forage resources to begin retaining heifers while other regions do. Producers should consider their resources and expected demand for bred females before jumping into this market.

Figure 1. Weekly Tennessee prices for 500-550 pound and 750-800 pound heifers.

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Griffith, Andrew P. “To Breed or To Feed?” Southern Ag Today 3(34.2). August 22, 2023. Permalink