Ohio BEEF Cattle Letter

– 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 as bid and ask prices were separated by as much as $8 on live basis. Prices are likely to settle near un-changed compared to last week.

The 5-area weighted average prices thru Thursday were $115.46 live, up $0.09 from last week and $183.08 dressed, up $1.59 from a week ago. A year ago prices were $120.68 live and $190.05 dressed.

Cattle feeders and packers were slow to agree on a price this week with cattle feeders asking $4 to $5 higher prices than the previous week while packers were bidding $3 lower than the prior week. It is highly unlikely the market will move much in either’s favor compared to week ago prices given the somewhat stagnant nature of live cattle futures following the Thanksgiving holiday. Cattle feeders should still hold some leverage over packers at this point in the Continue reading →

– Jared Geiser, Research Assistant, and Brenda Boetel, Professor and Extension Economist, Department of Agricultural Economics, University of Wisconsin-River Falls

Mexico historically has been an important source of feeder cattle for U.S. cattlemen, with feeder calf imports of approximately 1 million head a year since the mid-1980s. Imports grew from 702,000 head in 2008 to their peak in 2012 at 1.44 million head. The largest portion of Mexican cattle imports typically enter the U.S. as feeder calves between 200-700 lbs. Lightweight calves are backgrounded to gain additional weight before entering U.S. feedlots. These Mexican feeder cattle contribute to cattle on feed placements at varying amounts throughout the year.

2018 feeder cattle imports from Mexico through the month of October total 898,000 head, a 5 percent increase over the same period in 2017. Feeder cattle imports over the last 5 years, have been highest in the months of November and December and typically drop off in January. Many of these lightweight calves are turned Continue reading →

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

FED CATTLE: Fed cattle traded $4 higher on a live basis compared to last week. Prices on a live basis were mainly $115 to $117 while dressed prices were mainly $181 to $185.

The 5-area weighted average prices thru Thursday were $115.37 live, up $4.32 from last week and $181.49 dressed, up $5.23 from a week ago. A year ago prices were $118.92 live and $189.04 dressed.

The cattle on feed report was not as bearish as expected as cattle on feed numbers continue to exceed year ago numbers. The on feed report should not have Continue reading →

– Matthew A. Diersen, Professor and Extension Specialist, Department of Economics, South Dakota State University

Last week brought a flurry of market information from various NASS reports that give added insight into the cattle supply situation and the inventory levels likely in 2019. In the November Cattle on Feed report, placements were lower and marketings were higher than year ago levels. The placements were at the very low end of trade expectations, while marketings were at the very high end of trade expectations. The slight bump in futures last week, however, did not last long. The latest on-feed total of 11.7 million head continues to be a large absolute level of cattle to work through. Spatially, there was little disparity in the on-feed totals across major feedlot states. The marketings were a little higher in Nebraska than in other states. The implication of these factors is that the number on-feed is narrowing back toward the 2017 level.

There was a slowdown in placements weighing less than 800 pounds. Recent months have had Continue reading →

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

Cattle markets overall have shown impressive strength despite larger supplies during 2018. Feeder steer market averages have been near level or slightly stronger than 2017 levels in many markets over the past few months even in the face of larger calf supplies. USDA-AMS reported national feeder and stocker receipts were around 15 percent higher during August-October 2018 as compared to the same three months during 2017. Moving more calves at level or higher prices is a testament to the current demand-driven environment.

But the same “strength despite supplies” story does not hold for the cull cow market in 2018. Usually one of the more predictable seasonal markets, cull cow sellers have been plagued by low and going-lower prices for most of the year. Cull cow price data is a little more difficult to disentangle because there is often not as much volume or consistency across markets as there is for feeder cattle – but the trend has certainly been lower cull prices in 2018. In South Dakota, average cull cow prices reported by AMS were about 12 percent lower over July-October 2018 compared to the same four months of last year. In San Angelo, TX, cull cow prices were 18 percent lower over this same period and in Kentucky, cull cow prices averaged about 17 percent lower.

Larger supplies are indeed a big factor. Beef cow slaughter has been running Continue reading →

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

The fall run of feeder cattle is set to be essentially complete. The market will receive information on October placements and marketings this Wednesday. USDA AMS reports suggest the volumes of feeder cattle were slightly above the prior year. Likewise, weekly slaughter volumes suggest the total of steers and heifers will be reasonably strong compared to the prior year. Regardless of the outcome, the cattle and beef markets are entering into that time of year with continued large slaughter volumes and the heaviest slaughter weights. The hog and pork markets do the same. Thus, it is likely that the following weeks will see continued strong volumes of red meats, in the week with considerable focus on turkey.

Fed cattle and feeder cattle prices have remained at close to highs for the year. While boxed beef composite values and the choice/select spread have also remained strong. The underlying fundamentals are a bit of a mixed bag of Continue reading →

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

FED CATTLE: Fed cattle traded $2 lower on a live basis compared to last week. Prices on a live basis were mainly $112 to $114 while dressed prices were mainly $179 to $180.

The 5-area weighted average prices thru Thursday were $112.45 live, down $1.23 from last week and $179.58 dressed, down $0.42 from a week ago. A year ago prices were $123.05 live and $192.06 dressed.

Packers need cattle and feedlot managers need to move cattle, but these needs do not guarantee cattle trade at desired prices for either party. Many cattle feeders were asking as high as $118 through most of the week but settled for lower money as packer bids were lower due to the failure of whole-sale beef prices escalating. The price decline also coincides with live cattle futures losing value. The December live cattle contract traded near $117 most of last week, but it lost big on Continue reading →

– Rory Lewandowski, OSU Extension Educator, Wayne County

Recently I have received some questions about rental of livestock buildings, specifically dairy facilities. Typically, callers want to know a charge per square foot or a rental rate based on a per head basis or, for a dairy facility, based on number of free stalls. The reality is that there is no one right or correct answer. There are some basic methods or approaches that generate a dollar figure. However, view that number as a starting point in a rental negotiation. There are additional factors that affect the final rental rate. Those factors include the age and condition of the building, location of the building, the functionality or obsolescence of the building, the demand for rental of this type of building and the character and personality of the parties involved in the rental agreement.

The simplest and most direct way of calculating a building rental rate is to use a commercial rate, a known market. While these types of figures are available for grain storage and some equipment storage markets, they are not available for livestock building rentals. We don’t have a commercial livestock building rental market. A second method is to use survey data. Custom farm rates and cropland rental rates are based on surveys. The issue with livestock building rental surveys is that there are Continue reading →