There is a premium due to the longer useful life of the cow in the herd but smaller than expected due to potential issues with calving which can occur with first calf heifers. The premium is the widest in the Spring (March-May) and lowest in the Fall (September-November). In other words, bred heifers are on average 2.5% more expensive than bred cows. For example, the price ratio of bred heifers to bred cows has averaged 2.5% over the last 5 years. Bred heifers receive a premium over bred cows. The quickest way for these producers to increase the feeder cattle supply is through the addition of bred cows or bred heifers. There will be producers who have feed resources and believe profits are to be had in 20. For Northern Plains cattle producers, it may get a bit tougher before things improve from a feed perspective. If this weather pattern does materialize the change will benefit the Southern Plains with a cool and wet spring/summer whereas the Northern Plains generally stay dry in the summer before a cool/wet fall. Much has been said about the ENSO weather patterns changing this year. Some producers have already run out of hay as heavy snow has limited winter grazing and persistent drought conditions shortened the grazing season and reduced overall hay production. Higher prices for feeder cattle are expected but higher feed costs, especially hay, and other inputs are limiting the profit potential. Continued liquidation in 2023 will depend on the profit margins producers expect to receive. Feeder cattle supplies will be reduced nationally in 2023. The USDA Cattle Inventory report showed a 4% reduction in beef cows, a 6% decrease in heifers held back for retention, and a 5% reduction in heifers expected to calve this year (USDA-NASS 2023). This article was first published by "In the Cattle Markets" on Feb.
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