In this month’s podcast of Beef AG NEWS Today, Bradford Sherman sits in for show host Duane Rigsby and, along with OSU Extension Beef Coordinator John Grimes, takes a close up look at factors that affected beef cattle economics during the first half of 2018, and speculates on we might expect as we move into 2019.
Economics
Mid-year Cattle Inventory Suggests Slower Expansion Ahead
– Dr. Kenny Burdine, Livestock Marketing Specialist, University of Kentucky
USDA’s January Cattle Inventory Report suggested that growth in the size of the US cow herd was slowing. July’s numbers generally pointed in a similar direction. Both beef cow numbers and total cattle and calves were up about 1% from July 2017, which suggests a more moderate growth rate. This was coupled a 2% reduction in heifers held for beef cow replacement. Beef heifer retention as a percent of beef cow inventory was 14.2%, which generally does not suggest expansion. While this is significant, I tend to put more stock in the January numbers than the July numbers and January heifer retention was still pointing to some herd growth.
Several factors drive beef cow numbers, with calf prices likely at the top of the list. Our current calf market is very similar to where it was last year. Given the much higher meat supplies and uncertainty on the international trade front, I actually think this cattle market has been incredibly resilient. While many producers aren’t pleased with calf prices, I don’t think calf prices are low enough yet to Continue reading
Beef Continues to Fare Well, and a Personal Note
– Levi A. Russell, Assistant Professor and Extension Livestock Economist, Agricultural and Applied Economics, University of Georgia
Over the past few years we have been discussing the implications of rising beef, pork, and poultry production. It’s a simple story: if nothing else changes, higher production of beef will put downward pressure on beef prices, which means lower prices for fats, feeders, and calves. While this story is correct, the key assumption is that nothing else changes.
Fortunately, something else has changed. Specifically, beef demand is rising. In the 3rd quarter of 2017, it inched up Continue reading
Lots of Down-Side Risk Ahead
– Stephen R. Koontz, Department of Agricultural and Resource Economics – Colorado State University
Labor Day is upon us, at least from the perspective of retailers needing to secure beef volume for sales and featuring. The beef complex look ready to drift lower as, after this holiday, the seasonality in demand will wain and the seasonality in production will continue to escalate. Slaughter weights have continued their increases during the summer and will likely continue into the fall until the peak around October. The volume of cattle on feed over 90 and over 120 days continue to the high compared to last year and prior years. Fed cattle marketing were strong through June as revealed by the last month’s Cattle on Feed report and appear to be strong through July – especially heifers – as revealed by July’s weekly Livestock Slaughter reports. There does not appear to be an emerging problem with supplies but the steady seasonal increase in beef volume will continue. We have also seen Continue reading
Cattle vs. Beef Cycles
– Josh Maples, Assistant Professor & Extension Economist, Department of Agricultural Economics, Mississippi State University
The latest USDA Cattle report provided the most recent pieces of information to the ever-evolving cattle inventory picture. The big news was the number of heifers held for replacement declined year-over-year and the 2018 calf crop is estimated to be about two percent larger than 2017. The calf crop number tells a story of continued larger beef production for 2019 while the lower heifer retention rate suggests herd growth is slowing. Combine the retention rate with cow and heifer slaughter data and they collectively point to a significantly slowing herd growth rate.
Taken at face value, these two pieces of information can seem a little contradictory. One suggests Continue reading
Financial, Management Benefits of Pregnancy Diagnosis
– John F. Grimes, OSU Extension Beef Coordinator (originally published in the Ohio Farmer on-line)
We are entering an exciting time of the year for cow-calf producers. They have started or soon will be weaning their spring-born calves. Weaning is an excellent time to prepare the calf crop to become herd replacements or for future marketing opportunities by implementing health programs and transitioning to feed rations. It is also a great time to determine the pregnancy status of the breeding herd. Management practices for both these groups can go a long way to determine the ultimate profitability of herd.
The factor that should ultimately sort a female to the keep or cull pen is pregnancy status. The three primary methods used in pregnancy diagnosis are rectal palpation, ultrasound evaluation, or blood testing. Each of these methods can effectively diagnose the female’s pregnancy status when properly implemented. Obviously the preferred result is for the female to be pregnant. Pregnancy diagnosis is relatively inexpensive, especially when Continue reading
Flip this Cow: Adding Value by Reconditioning Cull Cows
– Matt Hersom, University of Florida Extension
Culling cows from the herd is a normal part of annual ranch management. How and when cull cows are marketed represents your last opportunity to generate revenue from each cow. There is an opportunity to add value to cull cows to generate some additional revenue for a cattle enterprise. Just as there are options to be compared before marketing weaned calves, producers should weigh their options before marketing cull cows.
There are a number of reasons for a cow to be culled from the herd. A primary reason is that the cow is open (not pregnant) when the herd is pregnancy tested. Without the prospect of a calf to sell, the open cow becomes an expense. Secondary to pregnancy status is age, as older cows are less productive or have greater risk of health and structural issues. Other reasons to cull a cow include disposition, not weaning a calf, overall poor performance, poor body condition, sickness, or injury. Certainly cows with active sickness/disease or that have not yet cleared withdrawal dates for animal health products should not enter market channels. Cattle producers may have an interest in adding value to their own cull cows, or in creating another potential revenue stream, there is opportunity for improving the value of culls cows.
Adding Value to Cull Cows
Figure 1. Example of the before and after of cull cow 931. (Gainesville FL, Photo credit Matt Hersom).
Before embarking on the process of adding value to cull cows, you need to identify your goals and what resources you have available. Many cull cows are in poor body condition and will require a higher plain of nutrition to add weight. A primary consideration then for adding value to cull cows are economical feed resources. If pastures will be used to provide the base nutrition for reconditioning cows, make sure there is enough extra so that the main herd will not be impacted. Any supplemental feed-stuffs used must provide the opportunity for a low cost of gain. Often these supplemental feeds might be Continue reading
Weekly Livestock Comments for July 27, 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 $116 while bid prices were mainly $109 to $110.
The 5-area weighted average prices thru Thursday were $110.10 live, down $3.01 from last week and $176.09 dressed, down $4.09 from a week ago. A year ago prices were $117.18 live and $187.88 dressed.
When cattle finally traded last week, they were $2 higher than the prior week, but cattle feeders and packers continue to be slow coming to terms on price again this week. Packers have been losing dollars in the wholesale market and cattle feeders are marketing cattle that are doing well to break-even in some cases. The struggle between the two has brought Continue reading
Weekly Livestock Comments for July 20, 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 $114 to $115 while bid prices were mainly $108 to $111.
The 5-area weighted average prices thru Thursday were $113.11 live, up $3.11 from last week and $172.00 dressed, down $2.86 from a week ago. A year ago prices were $118.02 live and $188.06 dressed.
Fed cattle trade continues to be delayed until late in the week. Maybe cattle feeders and packers were waiting on the cattle on feed report. It just so happened that the pre-report estimate averages hit the nail on the head this month. Maybe it was the July 1 cattle inventory report they were waiting on to see how many animals are actually in the pipeline to enter feedlots in the third and fourth quarter of 2018. Maybe it had nothing to do with USDA reports at all, and it all had to do with securing the best price possible. No matter the reason, trading cattle the past couple of weeks has been more difficult than sucking a bowling ball through Continue reading
No Huge Surprises in Cattle on Feed Report, But . . .
– David P. Anderson, Professor and Extension Economist, Texas A&M AgriLife Extension Service
USDA’s Cattle on Feed report, released July 20th did not include many big surprises, but there were some interesting points. But, first the basics. The number of cattle on feed were reported up 4.1 percent over a year ago, on placements up 1.3 percent and marketings up about 1 percent. The 11.282 million head on feed are the most for a July 1 in the history of this report going back to the mid-1990s.
While placements were up, they represented a Continue reading