Feeder Cattle Future Price Spreads: Opportunities to Hedge?

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

Feeder cattle future price spreads across all months have recovered to near pre-COVID-19 levels as quarantine restrictions and packing plant capacity issues have been mostly sorted out. For example, for the week of July 17, 2010, prices reached levels not seen since the beginning of March 2020. Pasture and corn progress are two factors that have the potential to push prices lower in the next coming months. Given current market conditions, producers have some options to lock in a margin.

Pasture Conditions

One the primary factors to continue to watch are declining pasture conditions. The weekly US range and pasture conditions rated “poor” and “very poor” has continued to rise since late May and early June. As of the middle of July, pasture conditions were 15% worse than the five-year average and 20% worse than 2019. Declining pasture conditions are largely the result of a drought progressing from the Southwest into the Great Plains. These conditions are largely consistent with the La Nina weather pattern. Pasture conditions are worse in Texas, Colorado, and New Mexico whereas most of the Southern and Western Cornbelt states have pasture conditions in “poor” and “very-poor” below 10%. If pasture conditions deteriorate it could force producers to Continue reading

The “D” word is back, and it’s Déjà vu, all over again!

Stan Smith, OSU Extension PA, Fairfield County

Adding to marketing complications resulting from COVID-19, and on the heals of one of the wettest springs in history, drought has now returned to Ohio!

After experiencing one of the wettest years ever through mid-May, over half of Ohio suddenly finds itself listed as either Abnormally Dry or in a Moderate Drought condition by the U.S. Drought Monitor. At a time when last year’s depleted inventory of quality forage has yet to be restored, the various aspects of managing feed resources will remain a primary concern for Ohio cattlemen in the coming weeks and months.

As we navigate the path of inadequate forage feed resources which it seems is becoming an annual ritual, we’ve now added challenges that result from a pandemic. COVID-19 related supply chain disruptions in April and May created a backlog of fed cattle that is likely to continue through the summer. This translates into heavier harvest weights and a lack of feedyard capacity that could easily Continue reading

Don’t Stop Managing Now: Preconditioning Pays

Garth Ruff, Extension Educator OSU Extension Henry County (originally published in the Ohio Farmer)

As we approach fall, now is the time to maximize the value of your spring calf crop. Cattle buyers have placed a premium on preconditioned cattle, and as preconditioning becomes more of the norm across the U.S., unweaned, uncastrated, and unvaccinated cattle are receiving greater discounts.

Here in the Eastern Cornbelt where cow herds tend to be smaller, the number one barrier to preconditioning calves is often a lack of facilities to wean, vaccinate, and to feed calves. Even for smaller herds the cost of workable facilities can prove to be a sound investment with the increase in value of a calf crop

Here we will look at the different processes involved in preconditioning calves and the potential for increased revenue from each practice.

Weaning. Across the industry, a standard for many preconditioning programs is to have calves weaned for at least 45 days. CattleFax in their May, 2020 Cow-Calf webinar reported that calves weaned over 45 days had an average value of $898 than calves that were sold right off of the cow at $800. That said, calves that were “trailer weaned” had Continue reading

Replacing “Junk” Forage with “Quality” Forage

Christine Gelley, Agriculture and Natural Resources Educator, Noble County OSU Extension (originally published in the Ohio Cattleman summer issue)

Do these comments sound familiar to you?

  • “I really need to do something with that junk pasture this year.”
  • “The bales off that hay field are junk. I’m going to reseed it.”

If stand decline is limiting production, perhaps it’s time to reseed.

Issues with “junk forage” can include low yields, weed encroachment, and low-quality feed value. Forage growers tend to lament over junk forage two of the four seasons of the year. One is the summer, when their hay equipment is running, their animals are grazing, and the forage is right in front of their eyes. The other is winter, when forage is in short supply, quality issues are leading to low animal productivity, and when pastures look more like mud spas. The time to make progress on correcting the factors that lead to junk forage is primarily in spring and fall.

Summer is the season for evaluation and making plans for improvement. Before implementing solutions for that junk forage, understanding what factors contributed to stand decline is crucial.

One of the first solutions often considered is Continue reading

Late Summer Establishment of Perennial Forages

Mark Sulc, OSU Extension Forage Specialist

If no-till is not an option, a firm seedbed is a must to establish a new seeding.

The month of August provides the second window of opportunity for establishing perennial forage stands this year. The primary risk with late summer forage seedings is having sufficient moisture for seed germination and plant establishment, which is a significant risk this summer given the low soil moisture status across many areas.

The decision to plant or not will have to be made for each individual field, considering soil moisture and the rain forecast. Rainfall/soil moisture in the few weeks immediately after seeding is the primary factor affecting successful establishment.

No-till seeding in August is an excellent choice to conserve soil moisture for good germination. Make sure that the field surface is relatively level and smooth if you plan to no-till seed because you will have to Continue reading

Done correctly, fall seeding forage has multiple advantages

Fall seeding forages has multiple advantages that can be adventitious for forage managers. In this episode of Forage Focus, OSU Extension Educator Christine Gelley visits with the staff of the Noble County Soil and Water Conservation District about fall seeding options and tools. Dave Schott and Jessie Radcliff discuss the reasons to consider fall seeding, potential methods, trouble shooting, and the use of no-till drills for forages. Christine explains the process and importance of calibrating your drill to increase chances for success.

Short-Season Forages for Late Summer Planting

Mark Sulc, Extension Forage Agronomist and Bill Weiss, Extension Dairy Nutritionist

Early November growth of Italian ryegrass (left) and oat+winter rye (right) after mid-September planting in Ohio

Short-season forages planted in late summer can be sources of highly digestible fiber in ruminant livestock rations. There are several excellent forage options that can be considered for no-till or conventional tillage plantings in the late summer or early fall planting window. These forages can be a planned component of the overall forage production plan. They can be utilized on land that would otherwise sit idle until next spring, such as following wheat or an early corn silage harvest.

Oat or Spring Triticale silage
These cereal forages can be planted for silage beginning the last week of July and into early September. Dry matter yields of 1.5 to 3 tons per acre (about 5 to 5.5 tons at 30 to 35% DM) of chopped silage are possible if Continue reading

Weekly Livestock Comments for July 17, 2020

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

FED CATTLE: Fed cattle traded steady compared to last week on a live basis. Prices on a live basis were primarily $95 to $97 while dressed prices mainly $157 to $158.

The 5-area weighted average prices thru Thursday were $96.32 live, up $0.35 com-pared to last week and $157.58 dressed, down $0.09 from a week ago. A year ago, prices were $113.02 live and $182.97 dressed.

The cash market and the futures market are providing a little optimism for the fall finished cattle market. The October live cattle futures contract has gained $6 since the beginning of July while the December live cattle contract has gained about $5.50 over that same time frame. These prices still do not put finished cattle where cattle feeders want them, but there is a lot of time between now and the fall marketing time period for cattle to keep creeping higher. Another point of optimism is the fact that Continue reading

Could early weaning increase your profits?

Dean Kreager, Licking County Agriculture and Natural Resources Educator (originally published in the Ohio Farmer)

Early weaning can reduce daily forage consumption between 25 and 40%.

Over the last couple of years, making hay in a timely manner has been nearly impossible.  There just were not 3- or 4-day windows of dry weather without water standing in the fields.  The result was a lot of poor-quality hay resulting in poor body condition scores of cows coming out of the winter.  This year, hay production has started out much better for most people.  We had a couple nice dry periods in late May and early June that allowed baling of good quality hay.  The issue this year is quantity.  Many people are reporting reductions of 30 to 50% in tonnage of first cutting hay.  There are probably two factors that are causing this.  First the cold weather and numerous frost and freeze events in April and May slowed the hay down growth.  Much of the alfalfa was at a bud stage on the first of June instead of flowering.  This likely helped the quality but hurt the quantity.  The second factor is that we simply would expect less hay when it is baled at the beginning of June than the end of June.  Time will tell whether the season long hay production remains low or if second and third cuttings make up the difference.

It is never too early to plan.  There are options to consider to be sure enough forage will be available for the winter.  This comes down to either Continue reading

Supplementing to Stretch Pastures

– Jeff Lehmkuhler, PhD, PAS Associate Extension Professor, University of Kentucky

Drought continues to impact the high plains area stretching down to the pan handle of Texas. The dry conditions will continue to impact pastures potentially lowering beef cattle numbers at year’s end. The recent high temperatures and limited rain will dry out pastures and limit forage regrowth on recently cut hay fields here in the Commonwealth. As forage growth slows, supplementation may be needed to provide beef cattle adequate levels of nutrients to support target production levels and limit condition loss of lactating cows.

Fibrous coproduct feedstuffs that are low in starch but high digestible fiber work well for supplementingcattle on a high forage diet. Soybean hulls, corn gluten feed, beet pulp, distillers grains, wheat midds, and rice bran are a few commonly available feedstuffs that would be lower in starch and high digestible fiber. These feedstuffs would be higher in available energy than most pasture forages that are going or already dormant. Depending on the maturity and digestibility of the forages, supplements could provide twice as much energy on a dry weight basis. Therefore, supplementation would need to be limited and not offered free-choice to avoid over conditioning as well as to avoid digestive upsets.

Cottonseed hulls are lower in digestible energy than the supplements listed above and most cool-season forages. Cottonseed hulls would be deemed as more of a forage replacement than a supplement. The crude protein value is Continue reading