Cattle-Fax® analysts noted that sharply higher corn prices have created turmoil in the cattle market. Calf and feeder prices have declined significantly as feedyard costs of gain have increased. They projected that corn prices will likely move higher than the underlying fundamentals would suggest. Following is a table showing the effects of corn price and fed cattle price on the necessary breakeven purchase price for a 750-lb steer.

Fed Cattle price	Corn Price, $/bushel
	Necessary breakeven purchase price
	2.50	3.00	3.50	4.00	4.50
80.00	98.28	91.70	85.12	78.54	71.96
82.00	101.74	95.16	88.58	82.00	75.42
84.00	105.20	98.62	92.04	85.46	78.88
86.00	108.66	102.08	95.50	88.92	82.34
88.00	112.12	105.54	98.96	92.38	85.80
90.00	115.58	109.00	102.42	95.84	89.26
92.00	119.04	112.46	105.88	99.30	92.72

As shown above, a $0.50/bushel increase in corn price lowers feeder cattle prices by nearly $7/cwt (about $52/head), assuming a steady fed cattle market. Although not shown here, for every $0.50/bu increase in the price of corn, the price of a 550-lb calf decreases by about $12.50/cwt ($65 to $70/head).