Andrew Griffith, Extension ag economist with the University of Tennessee, says prices are outperforming expectations.

“The price of 550-pound steers in Tennessee has increased around $30 per hundredweight since the beginning of the year, and approximately $20 per hundredweight of that increase has been during February,” he says in his weekly market outlook.

“This means 550-pound steer values have increased $165 per head since the start of the year. With such a strong increase in prices during the month of February, some may expect price movement in March and April to be much more subdued compared to historical expectations. Frankly, attempting to guess or thinking one will be correct could be a costly error.”

Griffith says several market factors are currently in play.

“There is no reason to expect prices to slow their positive price movement until such a slowing is actually experienced,” he says. “There is a lot more of the spring market to work through, and the number of calves made available is likely to decline and thus support prices.

“With the increase in calf prices, stocker and backgrounding operations may need to consider price risk management for cattle be sold in late summer and fall.”

Feeder cattle futures are likely to increase $30 to $35 per hundredweight over the next six to eight months, Griffith says.

“Such a price increase is not uncommon, and prices could increase even more than what is being predicted right now,” he says. “However, the question is if cattle buyers today can afford to take on the risk of price expectations declining.”

Griffith says the February cattle on feed report for feedlots with a 1,000 head or more capacity indicated cattle and calves on feed as of Feb. 1 totaled 11.70 million head, down 4.1% compared to a year ago, with the pre-report estimate average expecting a 3.9% decline.

January placements in feedlots totaled 1.93 million head, down 3.6% from a year ago with the pre-report estimate average expecting placements down 2.8%. January marketing’s totaled 1.77 million head up 4.2% from 2022 with pre-report estimates expecting a 4.0% increase in marketings.

Placements on feed by weight were as follows – under 700 pounds down 4.6%, 700 to 899 pounds down 2.3%, 900 pounds and over down 5.7%.