Reviewing Feed Costs, Drought, and Feedlot Inventory

– James Mitchell, Livestock Marketing Specialist, University of Arkansas

As I sat down to write CMN today, I struggled to think of a topic that wasn’t related to feeding costs, drought, or fed cattle supplies. Kenny, Josh, and I have taken turns taking a deep dive into each of these topics. Because of how important each of these issues will continue to be for cattle markets, I thought I would briefly summarize each of them. Throughout, I will reference past CMN articles for readers who want a more detailed explanation of feed costs, drought, and feedlot inventory.

A few weeks ago, Kenny did an excellent job connecting feed costs to feeder cattle markets. Kenny described how feeder cattle markets are driven by the expected future value of fed cattle and the costs of producing those fed cattle. If we think of feed and feeder cattle as inputs for fed cattle production, then an increase in feeding costs will impact feedlot demand for feeder cattle. Corn markets provide a good reference for feed costs. As of this writing, the nearby corn contract is trading at $6.48/bu. This gives a good indication of what it might currently cost to feed cattle. Currently, the December corn futures contract is trading at $5.37/bu. The December harvest contract is important to monitor as it coincides with fall cattle markets when a large share of calves are sold. With 67% of the corn crop planted, conditions this growing season will be important to monitor.

Drought conditions do not appear to be improving. Last Continue reading

Do changes in cattle crush provide any opportunities for profitability?

– Brenda Boetel, Professor, Department of Agricultural Economics, University of Wisconsin-River Falls

Where are live cattle prices going?  How about feeder cattle prices?  Or corn prices? Now ask another, more detailed question and ask if the forecast is a short-term forecast, or a longer-term forecast. Will nearby corn prices remain higher than deferred contracts? How long before feeder cattle prices increase to the level expected given that the cattle inventory is low? Whether you are bearish or bullish on this coming week’s forecasts, volatility in cattle prices and feed prices will remain high. Discussions on profitability and how to increase profitability will become even more important.

Every cattle producer wants to sell their cattle at the highest price, but profitability is dependent on more than just the output price. Profitability for any cattle producer is dependent on good cattle marketing and price risk management skills, and when prices are volatile those skills will be put to the test. Cattle marketing decisions include asking what type of Continue reading

Adding Calf Value Begins at the Working Chute

Stan Smith, PA, Fairfield County OSU Extension (originally published in Ohio Farmer on-line and Beef Magazine on-line)

Perhaps the path to greater calf profit begins at the handling facility!

Frequently over the years we’ve talked about Ohio’s average cow herd size – between 16 and 17 cows at any given time – and how it impacts management and marketing decisions for the ‘average’ size beef farm. Related to that, I’m often asked how ‘average’ size herds can compete economically with those who have the cow numbers that allow them to take advantage of the economics of larger scale by selling calves in pot load lots.

When thinking about the numbers it might take to capture the benefits of size and scale, keep in mind that most cattle travel to and from the feedlot in pot loads carrying 48,000 pounds. Also, the question of how smaller herds can compete on a scale with larger herds is not unique to just Ohio’s cattlemen.

As we look to our neighbors, we find the average cow herd sizes in the surrounding states of Indiana, Michigan, West Virginia and Pennsylvania range from just over 12 cows per farm to almost 19. Kentucky has the most of any neighbors averaging around 31 cows.

It’s apparent the challenges of competing economically when owning a relatively small cow herd is not just a concern in Ohio. None of our neighbors’ average size herds have the capacity to ship even a mixed sex, pot load of cattle themselves, much less a load of all steers or all heifers.

Since it appears much of the Midwest may be in essentially the same boat when it comes to average herd size, let’s explore a few alternatives that Continue reading

Management Considerations for Beef x Dairy Calves

Regardless the genetics of cattle you’re feeding, you will find value in listening to this three part webinar series.

While dairy steers have been an important part of the beef supply chain for some time, feeding half blood dairy steers sired by beef bulls has become a popular and more common practice in recent years. During the spring of 2021, Garth Ruff, Ohio State University Extension Beef Field Specialist, and Jerad Jaborek, Feedlot Systems Extension Educator at Michigan State University, hosted a three part webinar series on management considerations for beef sired calves from dairy cows that covered a variety of topics related to marketing, genetics, and management of crossbred beef x dairy cattle.

During the first session (embedded below) held on April 21 the focus was on marketing dairy beef calves and featured Larry Rose and JT Loewe of JBS as they discussed the quality of the cattle they seek to purchase, their pricing structure, and the demands they have for high quality, consistently sized and correctly finished dairy crossed beef cattle. Regardless the genetics being fed, the speakers shared a strong message for the value of consistency and proper finish the market is demanding in all fed cattle Continue reading

How much plastic wrap do I put on each bale for baleage?

During the second session of this past winter’s Ohio Beef Cattle Management School, one focus of the evening was effectively utilizing plastic wrap for fermenting baled forages and making baleage. In the 5 minute excerpt of that evening’s presentation, Jason Hartschuh answers the question, “How much plastic wrap do I put on each bale for baleage?”

In the entirety of the presentation, Hartschuh discussed harvest options, correct harvest moisture, and properly baling and wrapping wet forages. You can find that entire presentation, “The Do’s and Don’ts of Making High Quality Baleage” embedded below.

Rotational Grazing and Water Quality

Steve Boyles, OSU Extension Beef Specialist

Maintaining forage cover and using it for pasture or hay production should meet conservation compliance demands. A diverse group of people representing the local cattle organization, feed store, auction facility, fence building business, veterinary clinic, and the soil and water conservation district cooperated on a grazing project. The primary objective was to observe nitrates levels in surface water run-off from grazed and ungrazed sites. This information could be used to evaluate if rotational grazing is compatible with surface water quality requirements.

An intensive rotational grazing project was initiated within the Indian Lake Water Shed.  The land was seeded to orchardgrass, timothy and red clover. The soil was a Napponee St. Clair silt/loam with 6-12% slopes which is typical of Logan County, Ohio. There were not any trees within or adjacent to the grazing site.

The 40 acre area was divided into four sections. Perimeter fence was high tensile fence (5 strands, 3 electrified) on wood posts. Internal fence separating sections was 1 strand of electric wire on wood posts. However Continue reading

Feeder Cattle Adjust to Limited Fed Cattle Opportunities and Higher Feeding Costs

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

Futures price for most the live cattle and feeder cattle contract have shown substantial weakness through much of April 2021.  Optimism from late in the winter and early in the spring is being replaced by realism that it is going to take another 2-3 months to work through the large front-loaded fed animal inventories, that fed animal slaughter is at capacity, and that costs of gain are now substantially higher than the past several years.  Futures prices now reflect more the conditions that the underlaying cash market has been showing since the beginning of the year.  The cash market has been much less optimistic than the futures market – although the futures have changed over the prior month.

Fed cattle slaughter has been persistently high for much of the year and Saturday slaughter has been routinely over 60 thousand head.  Combined fed steer and heifer slaughter has been just short of 525 thousand head per week.  And it is likely that this is a reasonable maximum that the packing industry can process.  Packer margins are strong but there is little incentive to Continue reading

Saturday Totals and Weekly Cattle Slaughter

– Josh Maples, Assistant Professor & Extension Economist, Department of Agricultural Economics, Mississippi State University

The weekly number of cattle processed has been stronger than previous levels for most of 2021. Slaughter on Saturdays has been an important driver of this increase.

As shown in the chart above, the weekly number of cattle slaughtered has been near or above year-ago levels for most weeks in 2021. The impacts from the winter storm in February can clearly be seen in the blue line. It is also easy to see in the dotted line the sharp drop in processing last year due to the pandemic. The number of cattle slaughtered last week was 45 percent higher than a year ago – but that was driven by the low number last year instead of Continue reading

Maximizing Feeder Calf Value

The sixth and final session of the 2021 Ohio Beef Cattle Management School was hosted via ZOOM by the Ohio State University Extension Beef Team on February 22nd. During the concluding session, OSU Extension Beef Field Specialist Garth Ruff discussed a variety of ways cattlemen might improve profitability in a cow/calf enterprise including utilization of superior genetics, capitalizing on seasonal marketing trends, and calf management strategies that add value to individual, and groups of calves. Listen in below as Garth shares insight into maximizing feeder calf values.

Find recordings from all the 2021 Ohio Beef School sessions linked here.

When making baleage, what plastic do I use?

During the second session of this past winter’s Ohio Beef Cattle Management School, one focus of the evening was effectively utilizing plastic wrap for fermenting baled forages and making baleage. In the 2 minute excerpt of that evening’s presentation, Jason Hartschuh answers the question, “When making baleage, what plastic do I use?”

In the entirety of the presentation, Hartschuh discussed harvest options, correct harvest moisture, and properly baling and wrapping wet forages. You can find that entire presentation, “The Do’s and Don’ts of Making High Quality Baleage” embedded below.