Weekly Livestock Comments for June 15, 2018

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle trade was not well established at press. Asking prices on a live basis were mainly $115 to $117 while bid prices were mainly $110.

The 5-area weighted average prices thru Thursday were $110.81 live, down $3.44 from last week and $177.94 dressed, down $2.96 from a week ago. A year ago prices were $130.23 live and $210.12 dressed.

Cattle feeders and packers continue to delay finished cattle trade until the end of the week. Packers, who would seem to hold leverage over cattle feeders due to the large number of market ready cattle, have consistently bid $5 to $8 lower than cattle feeder ask prices. However, cattle feeders have consistently refused lower bids with hopes of higher prices. Some packers may not have as much urgency to purchase cattle for next week because they had contracted several cattle for delayed delivery and those cattle will be rolling in this week. Cattle feeders have been successful in sup-porting the market, but there remains potential for the live cattle market to move to the $103 to $105 area depending on Continue reading

A Comparison of Continuous vs. Management Intensive Grazing Systems

Brady Campbell, Program Coordinator, OSU Sheep Team, with DeVaughn Davis, Nathaniel Kinney, Kristy Payne, Dalton Shipley, OSU Animal Science Undergraduate Students

While this grazing project was conducted with small ruminants, it also relates easily to pasture management of beef cattle.

Another school year has passed and I am happy to say that I have completed my third year of being involved in AS 4004, Small Ruminant Production at The Ohio State University. This year Dr. Liz Parker and myself co-instructed this course and worked diligently to expose our students to every aspect of the small ruminant industry, including extension outreach and producer education. As a part of the course curriculum, students were challenged to compose an Ag-note (educational poster) to highlight a specific topic that is related to sheep or goat production, management, and husbandry. As viewers, you will see these unique postings appear periodically and will be noted in the title as “Ag-note.”

For our first Ag-note (linked below), OSU students DeVaughn Davis, Nathaniel Kinney, Kristy Payne, and Dalton Shipley share an economic perspective on the comparison of Continue reading

Fed Heifer Marketings Surge over Last 6 Weeks

– David P. Anderson, Professor and Extension Economist, Texas A&M AgriLife Extension Service

Cattle slaughter surged over the last 6 weeks with weekly slaughter over 650,000 head every week since the first of May, except the Memorial Day shortened week. Total cattle slaughter is up about 9 percent compared to the same period a year ago. Much of the year-over-year increase in slaughter is from heifers.

Fed heifer slaughter is up about 17 percent over the last six weeks, using the daily slaughter data and estimating the first two weeks of June. Going back to the first of April fed heifer slaughter is up about 16 percent compared to a year ago. Weekly slaughter levels were the largest since May 2013.

Steer, heifer, beef cow, and dairy cow slaughter tend to have their own different seasonal pattern. These depend, in large part, on Continue reading

Weekly Livestock Comments for June 1, 2018

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle trade was steady compared to last week. Prices on a live basis were mainly $110 to $111 while dressed prices were mainly $177 to $178.

The 5-area weighted average prices thru Thursday were $109.82 live, down $2.70 from last week and $177.63 dressed, down $2.72 from a week ago. A year ago prices were $136.26 live and $215.14 dressed.

Cattle feeders are less than thrilled with packer bid prices on finished cattle which likely stems from the precipitous decline in prices. In three weeks, live cattle prices declined $14 to $15 per hundredweight which goes without mentioning that prices this week are $26 per hundredweight lower than the same week one year ago. Adding insult to injury, basis for fed cattle was near $20 per hundredweight and now sits near $5 with nearly all of the narrowing resulting from lower cash prices. The narrowing of the basis means that most hedging strategies did little to nothing to protect against the expected price decline. It may be several weeks before cattle feeders escape Continue reading

Weekly Livestock Comments for May 25, 2018

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle trade was not well established at press. Asking prices on a live basis were mainly $127 to $128 while bids were $120 to $122.

The 5-area weighted average prices thru Thursday were $121.21 live, down $3.75 from last week and $191.75 dressed, down $1.87 from a week ago. A year ago prices were $137.86 live and $220.53 dressed.

There has been movement towards narrowing the basis on finished cattle, but it appears the way packers want to narrow basis is through lower cash prices which would be to their benefit. There were mod-est gains for June live cattle compared to last Friday with the futures price whittling off about $1.50 of the basis. On the cash side, cattle feeder and packers were slow to come to terms on finished cattle prices this week. Packers were trying to purchase cattle $4 to $5 lower than the previous week while cattle feeders were aiming to gain $2 compared to a week ago. Ask and bid prices placed a serious divide between Continue reading

Gaining Greater Market Access for Ohio Feeder Calves

John F. Grimes, OSU Extension Beef Coordinator

You do not have to look long and hard to find plenty of evidence that feeder calf marketing is undergoing significant changes across the country. The market is currently sending a clear message that buyers are demanding more for their purchasing dollars. Significant discounts are occurring in the market place for feeder calves that are not weaned 45-60 days, castrated & healed, dehorned, and given 2 rounds of a modified live vaccine for the shipping fever complex. In 2019, a major restaurant chain is going to start requiring their suppliers of fed cattle to be Beef Quality Assurance certified. This will in turn be pushed down to the producer level. Exports to China and other countries are going to require age and source verification. These are growing realities for cow-calf producers if they want access to as many markets as possible.

The OSU Extension Beef Team is pleased to announce that they have completed two pre-recorded presentations under the theme of “Gaining Greater Market Access for Ohio Feeder Calves”. These videos contain Continue reading

Initial Hay and Pasture Data Don’t Look Good

– Levi Russell, PhD, Assistant Professor & Extension Livestock Economist, Department of Agricultural and Applied Economics, University of Georgia

The recently-released hay and pasture conditions report doesn’t look particularly good for producers across most of the country. The bearish May WASDE report – higher production and larger ending stocks for 2018 – compounds the problem, but pasture conditions could very well improve as the season goes on.

May 1st hay stocks are down significantly across vast swathes of the country. Texas, Indiana, Missouri, and Louisiana are all down 60% or more relative to May 2017 and another 7 states across the West, Plains, and Midwest are down more than 40%. These reduced stocks are consistent with Continue reading

Weekly Livestock Comments for May 18, 2018

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle traded $6 lower than last week on a live basis. Prices on a live basis ranged from $110 to $117 while prices on a dressed basis were mainly $182 to $186.

The 5-area weighted average prices thru Thursday were $114.88 live, down $6.33 from last week and $184.28 dressed, down $7.47 from a week ago. A year ago prices were $134.27 live and $212.74 dressed.

Finished cattle prices have declined $10 per hundredweight in a two week period which has resulted in the basis narrowing $8. In other words, cattle feeders are not happy with how basis is narrowing, because all of the narrowing is coming from losses in the cash market and very little change in the futures market. Basis may not be cattle feeders’ biggest worry as this week’s cash cattle trade is the lowest price they have accepted since the middle of October. Looking back one year, finished cattle prices declined Continue reading

Entering the Summer Doldrums

– Stephen R. Koontz, Department of Agricultural and Resource Economics – Colorado State University

Memorial Day is soon to pass and the impact of the holiday on cattle and beef markets, if not already, is soon to be complete. The impact on prices was positive, especially the Choice-Select spread, but the fundamentals going forward look to be a very mixed bag. There is bullish information, there is bearish information, but there will likely be a lot of beef and other protein production through the remainder of the summer. This is and will continue to weigh on cattle markets.

The bullish news is as follows: the packer margin is strong, as are net exports of beef, Saturday and total slaughter volumes have been strong, slaughter weights continue their seasonal decline and boxed beef composite values have been relatively high. The Choice-Select spread, as mentioned, is also very strong indicating excellent demand going into summer. All of these indicate strong beef movement and good demand in the face of high production. But the bearish news is Continue reading

Kentucky Beef Cattle Market Update

– Dr. Kenny Burdine, Livestock Marketing Specialist, University of Kentucky

After focusing on cattle inventory in February, summer stocker programs in March, and fall calving cow-calf profitability in April, I want to focus more specifically on the market this month. Overall, the first four months of 2018 have not been kind to cattle producers. Fed cattle prices fell by more than $10 per cwt from late February to early April. While slaughter has been up in 2018 (especially for cows), uncertainly about trade was also at play. Cash fed cattle prices had actually improved some by early May.

It’s really the expectation for late fall / early winter fed cattle prices that is driving our current feeder cattle market. As I write this (May 9, 2018), December CME© Live Cattle futures had decreased by $7 to $8 per cwt from where they were in late winter. This translates back directly into feeder cattle values and Continue reading