Farming with Family through the Tough Times

Christine Gelley, Agriculture and Natural Resources Educator, Noble County, OSU Extension

There are days where every farmer wonders what they got themselves into. Days where the work ahead is overwhelming, the kids are sick, the cows are calving, your 4×4 is stuck in the mud, and to top it off, you are running low on stored feed and stored energy in your soul. Farming is tough. No doubt about that.

When the weather and the markets are uncooperative with your plans, the stress can pile up on the farm and on your family. One temporary way to deal with that stress is to be thankful for what you have. Someone out there always has it worse than us and we should be thankful for the things we have each day, instead of dwelling on the things we do not.

This past winter at the American Forage and Grassland Council Annual Conference, a beef farmer named Buron Lanier of Piney Woods Farm in North Carolina, shared a story of forage tragedy and triumph that can help put ‘thankfulness’ into perspective.

Mr. Lanier had presented at last year’s conference about the efforts made to convert his farm from KY-31 fescue to novel endophyte fescue. A significant portion of his farm is dedicated to silvoculture, combining the production of pine trees and feeding stocker cattle. With great effort, he progressed into a 365-day grazing system. He had no need to feed hay and very little supplemental feed. The system was Continue reading

Assessing Relationship Management and Leadership Skills

– Michael Langemeier, Center for Commercial Agriculture, Purdue University (originally published in farmdoc daily (9):109, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 13, 2019.)

As farms continue to consolidate it becomes increasingly important to assess a farm’s management skills. At a certain farm size, it is no longer easy or feasible for the manager or managers to wear every management hat. How does the management team determine when to focus on professional development, delegate management tasks among mangers, and seek outside assistance?

Continue reading Assessing Relationship Management and Leadership Skills

Summer Heats Up And So Are Brisket Prices

– David P. Anderson, Professor and Extension Economist, Texas A&M AgriLife Extension Service

Brisket prices are heating up just like summer temperatures. One of the most interesting beef demand trends over the last few years has been the growth in demand for briskets. It’s not just new craft bbq joints popping up everywhere in Texas, but even big chains like Arby’s jumping in and they all serve brisket.

Briskets used to be an inexpensive beef cut that benefited from long, slow cooking at low temperatures. They are no longer inexpensive. What used to be a very inexpensive cut, the primal brisket is now only behind the primal rib and loin in value. In the last week of May, the comprehensive cutout brisket value was $213.47 per cwt., up 19.4 percent from the same week the year before. Just during May brisket prices jumped from $194.39 to $213.47 by the end of the month. The monthly average price was up 12 percent compared to Continue reading

Kentucky Beef Cattle Market Update

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

This summer has once again shown us how brutal markets can be. In April, fall CME© feeder cattle futures were in the upper $150’s and I was surprised that calf prices weren’t higher given the profit potential of summer stocker operations. Two months later, those same contracts are down over $20 per cwt and many producers are wishing they had done something to protect those fall sale prices. I think the two largest reasons for the decrease are uncertainty created by trade issues and continued delay in corn planting.

Kentucky calf prices really did seem to hold on as long as they could, but finally broke hard through May and early June. After putting in their highs in April just under $160 per cwt, 550 lbs M/L 1-2 steers had moved into the mid-$140’s by the second week of June (see figure 1). Honestly, this is less drop than would be expected given the $20+ drop in the futures market. It’s as though our calf market didn’t completely buy into the Continue reading

Feed Prices in 2019

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

The USDA Crop Progress report released June 3, 2019 showed that as of the week ending June 2, 2019 only 67% of corn has been planted, compared to 96% in 2018. The July, September and December 2019 CME corn futures market contracts have increased an average of $0.59 since May 1. The average May change over the last 5 years has been a decrease of $0.11. Given the significant decrease in plantings and the percentage of corn that has been planted late, corn price may continue to increase. While the trade concerns with Mexico are the bearish indicators the decrease in acres will likely have a greater impact.

Over the last 5 years Mexico has taken an average of 24% of our exports. 24% of the average 5 years of exports is 522 million bushels of corn. If one assumes corn planting will be down 6 million acres to 86.8 million acres and we see a decrease of 2 bushels/acre to 174.6 bu/acre yield we would see a decrease in corn production of 554 million bushels. Although the market may focus on the new news concerning Mexico and trade, the long-term impact (and in my opinion the more likely scenario) of lower acres and yield will Continue reading

Livestock Risk Protection Insurance Program Changes

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

Questions concerning price risk management are fairly regular in this line of business. It is prudent to inform producers that changes have been made to the Livestock Risk Protection insurance program.

The change that will likely have the most impact is the increased subsidy. LRP will now be subsidized 20 to 35 percent depending on the coverage level which is up from the original 13 percent subsidy. In other words, the cost of purchasing price insurance will be lower.

The second most useful change with be the increased number of Continue reading

USDA Cattle on Feed Report for May

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

The past several news has seen considerable volatility in cattle and grain markets, and it is doubtful the volatility will fall off over the next several weeks. Repeated storms across the upper Midwest has delayed a lot of corn planting that will likely become soybean plantings. The immediate forecast shows little prospects of drying out and heating up. The continuous trade-related surprises. Well, at this point in time, I am less surprised. I would be surprised without the emergence of news or announcement. And a Cattle on Feed report. Let’s talk about that.

The USDA NASS Cattle on Feed report for May was released last Friday. For as large as the numbers are, it has the potential to be bullish. Placements in feedlots during April totaled 1.84 million head, 9 percent above 2018. During April, placements of cattle weighing less than 700 pounds were Continue reading

Feeder Cattle Odds and Ends

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

The May feeder cattle futures and options contracts expire later this week. The contracts will settle to the CME Feeder Cattle Index, which now includes various cattle that were previously excluded from the index, mainly any cattle labeled as “fancy, thin, fleshy, gaunt or full.” A trace-back confirmed that some fleshy 8-weights from Billings, MT were added to standard 8-weights in a recent index. The CME has been reporting the side-by-side totals for most of the past year, and the series has been collected by the LMIC during that time. Logic dictates that adding additional cattle would mean that the new index procedure should have more cattle than the old procedure. The last date using the old procedure was April 18, 2019. The new index included 1,042 more head and was $0.13 higher than the old index on that date. Thus more head are represented in the index now, and the price is similar to before because, for example, the lower price for a few thin calves would be offset by the higher price for a few fancy calves.

A chart of the full side-by-side comparison (not shown) is a little messy. There are several dates where the volume with the added data is less than Continue reading

Weekly Livestock Comments for May 17, 2019

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

FED CATTLE: Fed cattle traded $3 lower on a live basis compared to last week. Live prices were mainly $116 to $117 while dressed prices were mainly $184 to $186.

The 5-area weighted average prices thru Thursday were $116.70 live, down $3.70 from last week and $185.89 dressed, down $6.53 from a week ago. A year ago prices were $114.88 live and $184.28 dressed.

Finished cattle prices continued their consistent weekly decline for the third consecutive week. If a fourth consecutive week of a $3 loss were to occur then most of the positive basis with the June live cattle contract will have evaporated. The positive basis has been the motivating factor for most feedlot managers to push cattle out of the feedlot even though they would prefer to hold the line on cash traded cattle. The current week’s cash trade is still resulting in Continue reading

Weekly Livestock Comments for May 10, 2019

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

FED CATTLE: Fed cattle traded $2 to $3 lower on a live basis compared to last week. Live prices were mainly $120 to $121 while dressed prices were mainly $191 to $193.

The 5-area weighted average prices thru Thursday were $120.40 live, down $3.30 from last week and $192.42 dressed, down $6.54 from a week ago. A year ago prices were $121.21 live and $191.75 dressed.

If the past two weeks are any indication of what to expect from the finished cattle market moving through the next few months then it is clear that it is going to be a tough few months. A $6 loss in two weeks adds to about $84 per head on an animal finishing at 1,400 pounds. There is good reason cattle feeders have been willing sellers at lower prices. That reason is the Continue reading