– Elliott Dennis, Assistant Professor & Livestock Extension Economist, Department of Agricultural Economics, University of Nebraska – Lincoln

〈EDITOR’s NOTE: Beyond what you find in this article, learn more about Livestock Risk Protection (LRP) and Livestock Gross Margin (LGM) insurance this evening during the OSU Extension Beef Team’s Ohio Cattle Feeding School webinar beginning at 6 p.m. It’s offered free, but registration is required. Find more information linked here, or just click here to register.〉

The changes to the U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) Livestock Risk Protection (LRP) insurance plan took effect on January 20, 2021, for the crop year 2021 and succeeding crop years. These changes included: (a) increasing livestock head limits for feeder and fed cattle to 6,000 head per endorsement/12,000 head annually and swine to 40,000 head per endorsement/150,000 head annually; (b) modifying the requirement to own insured livestock until the last 60 days of the endorsement; (c) increasing the endorsement lengths for swine up to 52 weeks; and, (d) creating new feeder cattle and swine types to allow for unborn livestock to be insured. These changes, in addition to the dramatic changes in subsidy levels and allowing premiums to be paid at the end of the coverage endorsement period, should significantly improve the use of LRP. How much so likely depends on several factors including Continue reading →

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

Will higher corn prices or the expectation of higher corn prices temper the expectation for higher feeder cattle prices this year?

The simple answer is yes. If input costs increase then that means there is less money available for the feedlot to pay for feeder cattle. However, live cattle futures have been gaining strength which provides support for feeder cattle prices. Thus, corn and other feedstuff prices are increasing which is putting pressure on feeder cattle prices while the expectation for finished cattle prices is supportive of higher prices. This means that the two most important aspects of the feeder cattle market are pulling market prices in opposite directions. It is not known at this time which one will exert more force and win the tug of war, but what is known is that they will temper each other.

What is known at this time is that the futures market and livestock risk protection insurance are providing an opportunity to hedge summer and fall cattle sales at profitable prices. It may be worth considering.

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

If you are reading this, there is a good chance you have been dealing with impacts from the significant winter storm wreaking havoc on a large portion of the U.S. – even in the deep south. Power outages, school or business closures, and cold cattle are all occurring. This storm is rare due to not only the cold temperatures and ice/snow, but also the duration of the event.

Cattle sales volumes will be low this week in most places as some auctions close along with a reduction in the supply of cattle that would show up for auction even if they are open. The impact on winter pasture will be seen in the coming weeks as there will likely be at least some cattle that go to market sooner than intended due to reduced pasture conditions.

While there are certainly market impacts that will play out over the next few weeks, the production challenges faced by cattle producers are the most severe during an extreme winter weather event such as this one. For operations who have started calving, harsh temperatures and precipitation create significant stress for newborn calves (and cattle producers). Calving is not yet in full swing for most producers but there will be Continue reading →

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

FED CATTLE: Fed cattle traded steady to $1 higher compared to last week on a live basis. Prices on a live basis were primarily $113 to $114 while dressed prices were mainly $180.

The 5-area weighted average prices thru Thursday were $113.78 live, up $0.50 compared to last week and $180.07 dressed, up $0.75 from a week ago. A year ago, prices were $118.88 live and $190.26 dressed.

It would appear the cash price is attempting to catch live cattle futures, but that process is tougher than herding cats. The cash price remains $2 lower than the February live cattle contract, and there are two weeks left to close the gap. The more optimistic part of the market is April live cattle trading near $125. The ability to reach or surpass this price level is dependent on beef demand. Beef supply may play a role as well if the extremely cold temperatures persist and result in reduced cattle performance in the feedlot. It is always difficult to predict markets and weather. In this particular case, the Continue reading →

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

Cattle slaughter got a lot of attention in 2020 as the sector raced to deal with labor challenges in the spring that greatly impacted processing volumes. At its lowest point, federally inspected cattle slaughter was down by more than one-third from 2019. But the processing industry showed a lot of resiliency through summer as slaughter levels picked back up, despite the challenges the pandemic created.

While cattle slaughter is often considered as a whole, I want to focus this discussion on cow slaughter for three reasons. First, cow slaughter was not impacted the same as steer and heifer slaughter during the pandemic. Secondly, cull cow prices were relatively strong last year, which created additional incentive for culling. And third, 2020 cow slaughter volumes impact beef cow numbers in 2021. This final point should be reflected in USDA’s cattle inventory estimates that will be released on January 29th.

The beef cow slaughter chart that I am sharing this month compares beef cow slaughter in 2019 and 2020. The sharp drop in slaughter levels from March to April is clear in the chart. However, cow slaughter was not Continue reading →

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

The current outlook communications for the cattle and beef markets in 2021 are commonly optimistic –bullish. The underlying market fundamentals support this position. On feed number are currently high and will moderate through the remainder of the year with smaller placements and smaller calf numbers. Further, the currently very large carcass weights will shrink into the spring as winter weather has its impact. Similar optimistism is often offered for feeder cattle and calves but I believe this is a tenuous perspective. Rather, I believe cow-calf producers should look hard at Livestock Revenue Protection (LRP) insurance. My outlook communications discussed to potential for returning to normal seasonal patterns and opportunities this year. For cow-calf producers that involves diversifying and making some sales in the spring and early summer with fed cattle and beef price rallies. I am concerned that this year may playout more like last year. In 2020, selling opportunities evaporated through March. If the current changes to feed costs persists then we may be in for a repeat.

The February WASDE report will be released this week and the first look at USDA grain acreage forecasts will be offered at the Agricultural Outlook Forum at the end of next week. This information will update us on the tightness of corn and soybean stocks and possible acreage relief with this crop year. Regardless, stocks are considerably Continue reading →

As part of our 2021 ‘virtual’ winter programming, the Ohio State University Extension Beef Team was privileged to host University of Kentucky Livestock Marketing Specialist Kenny Burdine via ZOOM on January 26th. During his presentation, after reviewing the impacts of COVID-19 on the 2020 beef cattle market and laying the foundation for what may be on the horizon, Burdine offered his insight into what we might expect the markets to look like as we progress through 2021. Excerpted here in about 9 minutes from that presentation are Dr. Burdine’s projections for what he expects from the beef cattle markets throughout the coming year.

Throoughout his presentation Burdine detailed the impact of the COVID-19 pandemic on the 2020 livestock markets, and offered insight into the Continue reading →