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There has been, understandably, a drop in demand for beef the past few 
months, backing up the supply chain. Cattle in the feedlots are being held 
longer, so they are heavier when they go to market. These heavier cattle 
are more apt to grade Choice, resulting in a near-zero Choice-Select 
spread, and the trend in feeder steer and finished steer prices remains 
pointed downward.
http://www.ams.usda.gov/mnreports/lsddcbs.pdf

I'm not hearing of herd reductions locally, and in the Northeast we may 
remain relatively insulated until calves are sold this fall. As usual, I 
expect we will have a reasonably strong market this spring for calves from 
those who are doing a few in the backyard. I'm also not hearing of a drop 
in demand for freezer beef, but I suspect there must be a softening of that 
market, too.

Meanwhile, the rumblings of cutting the dairy herd continue - this week's 
Hoard's notes the "sense is that 300,000 cows need to be removed soon". 
Whether through a federal program, through CWT, or through farm failures, 
those cows will be coming into the beef market in the next year.

Is there a bright side? This winter was the quietest my phone has been with 
respect to complaints about slaughterhouses - things didn't get better, but 
at least they didn't get worse.

Also, those marketing local beef, who are often constrained by limited 
supply, may be able to explore new markets in these times of lower demand 
and higher supply of cattle.

For those of us with cattle, it always comes back to feed costs first, and 
attention to the many other cumulative management decisions second. It is 
nearly impossible to "manage" your way around $120 per ton hay when feeder 
steers are under a $1.

Looking forward, at some point the cycle will change and those positioned 
with replacements to sell will get some consolation. If you have cheap feed 
and are an optimist, this may be the time to be building the herd.