In general, the heavier the weight, the lower the price per hundredweight. If we plot average feeder cattle prices as a function of weight, we have a downward sloping price schedule of decreasing market prices as weaning weight increases. A price schedule is defined here to be a series of market prices that corresponds to alternative market weights of feeders. A price schedule allows us to determine a market price for each and every market weight within the price schedule. We also know that the absolute level of feeder cattle prices is heavily determined by the overall supply of feeder cattle.
Market prices tend to move in the opposite direction of cattle numbers.
The 1996 drought in the southern Great Plains caused a lot of cows to be culled and slaughtered. Part of the current strength in today's cattle market is related to the 1996 decrease in beef cow numbers. As cattle numbers decrease we see the schedule of feeder calf prices shift upward. Another fundamental impact on feeder cattle prices is coming from changing corn prices, which have two effects. First, decreasing corn prices and the resulting increase in the demand for feeder cattle shift the feeder cattle price schedule upward for all weights of feeder cattle.