The highest average price typically occurs in late winter and early spring. The lowest average price occurs in the fall. This  implies that cow-calf producers that calf in the spring and sell their calves in the fall, sell during the lowest prices of the year.   Fall calving operations have the opportunity to sell during the highest seasonal prices, but fall calves face the low gains, extra  feed costs and potentially high death loss during the winter months.

The Beef Cycle
     The size of the U.S. beef herd does not remain constant over time, rather it increases and decreases depending upon the level of profit achieved by cattle producers.  If the industry is profitable cattle producers retain heifers, breed them and in time  expand the size of the herd.  When the supply of beef exceeds demand, prices fall and the cattle producer diminishes the size  of his herd by culling cows and by selling heifers. This process continues through time as the industry tries to adjust the size of the herd to reflect the signals it receives from the forces of supply and demand at work in the market. The term used to  explain this process is "the cattle cycle". The cycle is frequently defined as the time between when the cattle numbers are at a  lowest point and the next time cattle numbers reach a low point.

      The significance of the "cattle cycle" to the beef industry is that it reflects profit potential to the individual cattle  producer.  When inventory levels are expanding profits are being made, but at some point in time profit levels will be squeezed out of the market.  Prices will fall and adjustments in herd size must be made if the producer is to ready for the next upswing in the "cattle cycle". This is the nature of the beef industry.   It will happen again, and producers need to be aware of the cycle and its affect on their profitability.

Cow Slaughter Numbers And Calf Prices
     Another relationship may also help us understand why prices react as they do to market forces. This is the relationship between cow slaughter numbers and calf prices. As cow slaughter numbers increase, calf prices decline. Low numbers of slaughter indicate a healthy cow-calf segment within the beef industry. Cattle producers are making a profit; consequently, they will  retain cows and heifers in an attempt to build the herd and have more animals to sell.

USDA Hog, Poultry And Crop Reports
     Other USDA reports are useful in evaluating intermediate and long-run trends in the beef industry. Production reports  indicate the progress of grain crops, and the supply and demand estimates of these crops, particularly corn and soybeans.   Estimates of hog and poultry numbers also provide the cattleman important information of the volume of competing meats  today and in the future.

      USDA's crop and livestock reports are also readily available to the cattle producers. Cattle and hog slaughter numbers are  released each day and are available over the news wires; also, a few local newspapers.  Full service commodity brokers  provide this information, or if the local sale barn, grain elevator or cotton gin has access to a news wire, the information may  be obtained from them.

     Feedlot cattle placements and marketings are also available from these market reports. Some farm radio reporters  periodically give this information. Also, cattle brokers and merchandisers keep up with how current feedlots are today.

Marketing Alternatives
     A cattleman's marketing plan starts with the production of the animal. A solid production program is the basis of the cattle  producer's marketing plan.  The cattleman must use his knowledge of animal production to produce a product that is  acceptable to the market. He must also produce this animal in a timely manner in order to minimize production costs. The  cattleman’s knowledge, timing and effort are essential in the production of the animal. Knowledge, timing and effort do not  guarantee a profit, but they improve the odds. Knowledge, timing and effort are also essential for good marketing.

     Marketing, therefore, is a systematic approach toward achieving a reasonable return for the producer’s money, labor,  management ability and other resources he has invested in the production of his animals.  Marketing requires detailed  planning and the estimation of costs and prices.  Simply put, marketing involves knowing the alternatives, what the  alternatives offer, how the alternatives meet the goals of the operation and how best to use each marketing alternative.

     The first step in the development of an individual cattle producer’s marketing plan is to estimate his cost of producing the calf; it is the MARKET TARGET PRICE. The objective of any plan is to receive a market price that will meet or exceed this cost of production. The producer must keep this market price target in mind when he develops implements and evaluates his marketing efforts.