Bred cow prices at auctions during the fourth quarter of 2018 were 10-20% lower than a year earlier in key cattle production regions, according to the Livestock Marketing Information Center (LMIC).

The U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) reported average prices in Georgia auctions for 1,200-1,300 lb. cows bred four to six months earlier at $912.30 per head in December versus an average price in December 2017 of $1,119.89 -- a 19% decline. LMIC noted that the same comparison in Montana for mid-aged 1,200-1,300 lb. bred cows showed a 6% price decline in December compared to a year earlier. Not surprisingly, LMIC said Midwest auction cow price changes from late 2017 to late 2018 posted a drop between that of Montana and Georgia, as St. Joseph, Mo., prices were down 15%.

Further, LMIC reported that interest in purchasing breeding stock has been cautious relative to current spot and futures market pricing for calves and yearlings. Steer calf prices in Oklahoma City, Okla., during December were only 4% lower than a year ago. Feeder cattle futures prices for delivery in November 2019 were 2% higher in December than one year earlier. In mid-January, the November feeder cattle contract closed at $149.85/cwt. versus $144.93 a year earlier.

LMIC is projecting southern Plains steer calf prices (500-600 lb. steer) in 2019 to average $167-174/cwt., which compares to the 2018 calf price average of $171.39/cwt. LMIC’s forecast for yearlings (700-800 lb. steer) is $145-150/cwt., providing a reference point for current futures market values. The yearling price for 2018 was $150/cwt.

According to LMIC, 2018 average annual bred cow (or replacement cow, per the St. Joseph auction market quote) prices reported by AMS dropped to the lowest levels in five years. In fact, LMIC said prices in some markets declined to averages last seen in 2010.

LMIC noted that St. Joseph "is the case in point, where drought last summer in northern Missouri led to some forced liquidation of herds. At the time of those lower bred cow prices (2012-13), the beef cow herd was shrinking at a 2-3% annual rate, and the number of beef heifers being retained for breeding purposes was 20% lower than in 2018.”