Record prices for feeder steers and cull cows signal that the market wants beef now and later.

Feeder steer prices soared to new heights across most weight categories in recent weeks. Oklahoma feeder steers have been 86% higher on average than the 2021 annual average for the past 10 weeks.

For example, 600- to 650-pound feeder steers at combined Oklahoma auctions touched the $3-per-pound mark in late March for the first time and averaged nearly $2.90 per pound since February.

The market clearly wants more feeder animals.

At the same time, cull cow values increased nearly 40% in just the past couple of months, also reaching record levels. South Dakota cow prices have been 94% higher than their 2021 annual average for the past five weeks.

The market wants more cow beef. It is an exciting time to be a cow-calf producer, but what market should you be targeting?

Strategic choices for beef producers

Every operation and every producer are unique in terms of strengths, weaknesses and long-term goals.

If you have been considering reducing the size of your operation, it is certainly not a bad time to send cows to market.

With U.S. ground beef supplies running well below market demand (as evidenced by beef import levels during the first two months of the year that were 32% above year ago) and production expected to decline even more when herd rebuilding finally begins in earnest, cow values should remain historically strong for a while.

But if you have been looking to grow your herd, passing up today’s record-high cow market to tap into what should be a very lucrative feeder calf market for the next few years might be your best option.

The important thing is to not allow the current lofty market prices throughout the cattle sector to lead to complacency. While there are multiple profitable strategies for producers to take advantage of today, only one will be the best fit for your operation.

Mixed signals for beef herd growth

While some areas of the country are still dealing with abnormally dry conditions, national drought coverage and severity improved quite a bit relative to last fall.

Still, signs for beef cow herd rebuilding remain mixed.

While the beef cow slaughter rate for the first quarter of 2024 is down compared to each of the past two years, it is still well above the average of the past 20 years and much higher than the rates observed from 2015-17, when the last beef cow herd rebuild was in full swing.

Likewise, the percentage of cattle on feed that are heifers decreased marginally for the past two quarterly data points, but it is still far higher than historical levels that have been associated with herd rebuilding.

Brown is a livestock economist with the University of Missouri. He grew up on a diversified farm in northwest Missouri.