Infographic about determination of Cattle Prices

THE DOLLAR STORY OF CATTLE PRICES Price determination is the interaction of the broad forces of supply and demand that determine the market price level. Sale prices for calves sold from a cow-calf operatlon are subject to fluctuatlon as part of the cattle cycle of financlal markets. The relatively long perlod It takes a cow-calf operator to bulld up a beef herd and ralse new calves to the deslred welgh tends to extend the length of sucha cycle. DEMAND FORCES FACTORS AFFECTING BEEF CONSUMPTION The price of products produced from fed cattle (beef) The price of competing products (pork and poultry) 02 03 Consumer tastes and preferences 04 Income of the consumer who will be consuming the beef SUPPLY FORCES Expected price of outputs produced from those inputs (fed cattle) Technology (growth promotants, etc.) 102 03 Input prices (feeder cattle and grain) FOR FED CATTLE, SUPPLY DETERMINANTS OR FACTORS AFFECTING THE QUANTITY OF BEEF PRODUCED INCLUDE Different commission rates are worth considering when choosing a sale barn. In east-central Mississippi, it might range between 3 and 5 percent. FEEDER PRICE FORMULA THE TWO PRINCIPLE FACTORS THAT AFFECT THIS BIDDING PROCESS ARE: 01 SLAUGHTER CATTLE PRICE Feeder prlces are bld up and down depending primarlly on economic conditions In the cattle finlshing Industry 02 COST OF GAIN COMBINING THESE TWO FACTORS IN A SIMPLE FORMULA SUMMARIZES HOW DEMAND AFFECTS FEEDER CATTLE PRICES FP = SPE + (SW -FW)(SPE-CG) FW FP = feeder price at a glven welght ($/cwt). SPe = slaughter price expectation: finishing Industry's average expectatlon of price of slaughter steers or helfers at the time when slaughter welght Is reached ($/cwt). SW = slaughter welght of fed cattle (Ib). FW = feeder welght (Ib). CG = finlshing Industry's average cost of galn, excluding cost of feeders ($/cwt). CATTLE PRICE SEASONALITY Seasonal price patterns are normal price movements or fluctuations that occur within a year. Recognizing the presence and magnitude of seasonal price patterns can improve many cattle producer marketing and production management decisions. FEEDER AND CULL COWS FED CATTLE CALVES IMPACT OF CATTLE PRICE SEASÓNALITY Cattle price seasonality is generally most pronounced for lighter weight animals (calves) and generally I/ dampens in magnitude for largér animals (feeder and fed cattle). Cull cows, however, have the largest seasonal price swings of all cattle classes. SSD Sources www.beefcattle.com/cattle-prices BEEF www1.agric.gov.ab.ca/$departnent/deptdocs nstall/sis10943 FAIR MARKETING CATTLE http:/www.agmanager.infolivestock/marketing.bulletins_2 todays_market/CattleMarketEnvironmert.pdf Infographic by SSD FairMarketing www.beefcattle.com http://en.wikipedia.org/wiki/Cattle www.fairmarketing.com