Feedlot Inventories at Another Monthly Record High

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

Just like the past few months, the latest monthly Cattle on Feed report showed a record number of cattle in feedlots with 11.85 million head on feed as of June 1st. This was up 1.2 percent (or 142,000 head) over June 1, 2021 and is the highest on record for any June 1st since the series began in 1996.

Placements were down 2.1 percent during May 2022 as compared to May 2021. This was a surprise when compared to pre-report estimates which ranged from one percent lower to 1.5 percent higher than a year ago. Despite the overall decline, placements of Continue reading

Data That Delivers

– Jason Duggin, Beef Cattle Specialist, Department of Animal and Dairy Sciences – University of Georgia

Imagine a business that didn’t track its inputs or its outputs. Obviously, that would be a bad scenario. The demand for information is rapidly increasing when it comes to all sectors of the beef chain from commercial cow-calf to retail. The digital age we currently live in combined with genomic testing has streamlined selection and marketing to a speed that even now seems almost fictional. Inputs and outputs are the future of the industry and for all progressive cattle producers.

Retailers of all sizes are delving into marketing that connects consumers to the farm. As you may expect, large retailers can already scan a bag of lettuce and tell what farm it came from. If the thought of that makes you nervous, I don’t blame you. However, the pros may outweigh the cons for most. Some leaders in the retail segment are looking ahead to a time when consumers can scan a QR code on a package of ribeye steaks to learn about the ranch or farm that it originated from. At least as of this writing, people will pay for that kind of story. Restaurants are increasingly promoting premium known-source menu items. You may also hear the term Blockchain which is a digital record of transactions from start to finish.

If scenarios like this seem too far-fetched, that is understandable, but regardless of how far we take our marketing, the information we provide to the next person in the beef chain can make . . .

Continue reading Data That Delivers

Be Mindful of Heat Stress to Maintain Stocker Calf Gains

– Dr. Jeff Lehmkuhler, University of Kentucky, Department of Animal & Food Sciences

Continued drought conditions will continue to limit forage growth in some regions.

As I am writing this, bluegrass has flowered, and I’ve seen fescue plants with flowers emerging. This spring has been a bit cool slowing grass growth, but warmer temperatures will certainly begin to kick grass growth into high gear within the next couple of weeks. Precipitation and soil moisture continues to be a struggle in the western half the United States as shown in the Monthly Drought Outlook figure from the National Drought Monitoring website. These continued drought conditions will continue to limit forage growth in these regions.

Forage availability is a key driver of stocker calf performance followed by forage quality. As we move through the spring months and begin to see temperatures increase, forage growth slows. Previous research demonstrates that the photosynthesis of plants is negatively impacted by increasing temperatures. Photosynthetic rates of tall fescue can be reduced when temperatures reach 86F/77F degrees Fahrenheit, day/night. Areas in Kentucky had eight days in May during 2021 that had daytime high temperatures of 86 or higher. Several days in June, July and August are normally going to be 86 F or warmer. These warmer temperatures slow forage growth of our perennial cool-season forages. More importantly, research has demonstrated that Continue reading

Beef Business Foundations; Understanding Calf Price Differentials

A common question among cattlemen is why calf prices differ from state to state, from market to market, or from cattleman to cattleman. Understanding why price differentials exist is key to understanding how to maximize your selling price and make management decisions to support your operation and goals. Here, Dr. Kenny Burdine, Extension Professor for Livestock Marketing at the University of Kentucky answers that question.

Feeder Cattle Lot Size

– James Mitchell, Livestock Marketing Specialist, University of Arkansas

In the previous post to this site Kenny Burdine is featured in a video for the UK Ag Econ Beef Business Foundations series where he talks about feeder cattle price differentials. Among the factors affecting feeder cattle price, perhaps the most important, in my opinion, is feeder cattle lot size. Cattle producers receive premiums at auction for selling large lots of cattle of a similar type and quality – ideally, a pot-load. For producers selling 500-pound calves, this would equate to approximately 80 head. Premiums for lot size will vary. In Kentucky, 80 head lot sizes receive an average premium of $20-$23 per cwt (Halich and Burdine, 2015).

Lot size is one of the biggest marketing challenges for cattle producers. Many producers do not have large enough cow herds to sell 80 calves. For example, 80 percent of cattle operations in Arkansas have fewer than 50 beef cows. The discounts for small lot sizes will tend to outweigh the premiums that producers will receive for other cattle characteristics like preconditioning.

One of the biggest comments I get from producers in the fall is that they Continue reading

Kentucky’s PVAP Program; Lesson learned about adding calf value

Stan Smith, OSU Extension PA

The Kentucky Post Weaning Value-Added Program (PVAP)-Precondition was started in 2019 to encourage cow-calf producers to wean and precondition calves prior to marketing. Recently Kevin Laurent, Extension Specialist in the University of Kentucky Department of Animal and Food Sciences, shared the following regarding what they’ve learned from the program about adding value to feeder calves:

So, what have we learned? Although market conditions can always derail the best laid plans, the best hedge against market swings from a feeding standpoint is weight gain. Anything we can do prior to and at weaning to promote feed intake and weight gain should pay dividends. Some of these strategies are as follows: Continue reading

Beef Cow Slaughter Remains Elevated

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

A few months ago, Kenny wrote about beef cow slaughter outpacing 2021 levels. He discussed how drought and cull cow prices, among other factors, were contributing to high beef cow slaughter totals in 2022. I want to follow up on his article with the most recent data and also discuss some of the regional breakdowns of cow slaughter.

So far in 2022, beef cow slaughter is 15 percent higher than the same period in 2021. This is equal to approximately 200 thousand more head of beef cows processed this year. Beef cow slaughter averaged about 65 thousand head per week in 2021 but is averaging about Continue reading

The Market Has Topped

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

One of the adages that makes analysis of cattle and beef markets so difficult is that the playing out of somewhat observable supply and demand scenarios seems to take so long – possibly twice as long as you might think.  That said, the cattle and beef markets appear to be returning to much needed and anticipated normalcy. And certainly – or at least more recognizable – than what we’ve lived with the past two years. There will continue to be lots of talk – and sticker shock – regarding inflation. But the large supplies of fed cattle, exacerbated but COVID supply chain issues, look to be worked out through this summer and into fall.

Beef prices are still strong and seasonally strong for the early summer but are softening, packer margins are shrinking but still large, the weekly kill is still very strong, and slaughter weights continue the seasonal decline and are perhaps more so than seasonal norms. Saturday slaughter is strong but below last year and weekly steer and heifer FI slaughter remains strong. Packers appear to be well-crewed, and a huge Saturday kill is not key to a strong weekly volume. These weekly kill numbers were key for market prices over the coming weeks. Short kills and weak prices while heavy kills allowed for Continue reading

Need More Hay or Silage Storage? Consider a USDA Farm Storage Facility Loan

Eric Richer, OSU Extension, Fulton County

On farm hay storage is eligible for low interest financing through FSA

For many farmers and ranchers, on-farm storage is a key part of a comprehensive commodity marketing plan and improved feed storage. University research and practical experience has shown that forage feed quality is significantly better and storage losses are much lower when stored inside out of the weather (see Hay Storage Considerations, OSU 21-96 Fact Sheet).

A unique farm program administered through the Farm Service Agency (FSA) is the Farm Storage Facility Loan (FSFL) program.  FSA is part of the U.S. Department of Agriculture (USDA) which uses this program to provide low-interest financing for producers to store, handle, and/or transport eligible commodities they produce. Many livestock and/or forage producers do not realize that flat storage and bunker-type storage structures are eligible as well as the associated trucks and handling equipment. Overall, the list of eligible commodities, facilities, equipment, and upgrades is quite impressive. Generally, they include Continue reading

How Significant are Discounts on Lighter Muscled Calves?

– Dr. Kenny Burdine, Extension Professor, Livestock Marketing, University of Kentucky

Over the last year, we have discussed price differentials between bulls and steers, and for weaned calves versus those straight off the cow. In both cases, there are management implications for cow-calf producers. Most of the time, there is a price advantage when steers and for selling preconditioned calves. The producer must decide if that price benefit is sufficient to justify implementing the management practice. In this article, I want to discuss the impact that feeder cattle muscling has on market value. While this is not a year-to-year decision in the same way that castration and preconditioning are, calf muscling is something that producers need to keep in mind as they make long term genetic decisions for their cow-herds.

Feeder cattle are generally graded based on two factors, (1) frame size and (2) muscling. Frame sizes are based on the expected weight of the animal when finished – large, medium, and small. Muscle grades are based on the thickness of the muscle, with a number 1 being the thickest / heaviest muscled. More detailed information about these grades can be found on the AMS website here.

While there are many ways to estimate the impact of muscling on calf prices, I am going to take a simple historical approach in this article. For market reporting purposes, cattle are often grouped by a combination of frame and muscle grades. For example, market reports typically share prices for Medium and Large Frame #1-2 calves and for Medium and Large Frame #2-3 calves. By comparing these price differences over time, one can get a feel for how much price discount is seen on Continue reading