100-Dollar-Ideas

Profit Tracker: Losses Now Exceed $600!

Fri, 07 Jul 2023 19:16:43 GMT

Uncharted territory. That’s where America’s cattle feeding industry finds itself as fed cattle lose $611 per head. Calculated breakeven prices on closeouts last week were $170.56 per cwt., according to Sterling Marketing, Vale, Ore. USDA’s reported 5-area cash price last week was $123.52 per cwt., or $47.04 short of breakeven.

“This unbalanced situation cannot be sustained in a market that will see 4% more beef, continued record pork production, and a likely 4% increase in chicken production during 2016,” says Sterling Marketing president John Nalivka. “Prices are aligning to a changed supply situation. Cattle weights will remain relatively high during 2016 with increased numbers as herds expand. While hog producer margins have turned red with significantly lower lean carcass values, this is not likely to cause a setback in continued herd expansion through most of 2016. Poultry production will increase, too. The result will be increased total meat supplies and lower prices and it will be noticeable for beef after 2 years of record prices, although prices are expected to generally remain above 2013 levels.”

The ongoing market wreck has pulled feeder cattle prices significantly lower. Oklahoma City feeder steer prices factored into Sterling Marketing’s sample closeout against last week’s fed cattle was $225.79 per cwt. The same steers factored into last week’s placements at $172 per cwt., or $461 per head less.

Beef packer margins increased $9 per head, resulting in average profits of $28 on every animal processed. Packer margins are about $1 per head better than last month.

A month ago cattle feeders were losing $486 per head, while a year ago profits were pegged at $45 per head, according to Sterling Marketing . Feeder cattle represent 79% of the cost of finishing a steer, compared to 78% last year.

A month ago beef packers were earning $27 for every animal processed, while a year ago packers were losing $78, Sterling Marketing estimates.

Farrow-to-finish pork producers lost $26 per hog last week, slightly better than the $30 per head loss the previous week, but slightly lower than the $20 per head loss found a month ago.

Pork packers saw their margins decline $2 to a profit of $27 per head. Negotiated prices for lean hogs were $54.66 per cwt. last week, an increase of $1.59 per cwt. from the previous week. Cash prices for fed cattle are $43.25 per cwt. lower than last year, and negotiated hog prices are $33.31 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $490 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $295 per cow.

Profit Tracker: Catastrophic Feedyard Losses

Fri, 07 Jul 2023 19:16:43 GMT

Cattle feeders hope the cash market found its bottom last week. Cash prices tumbled another $11 per cwt., which produced an astonishing drop in margins that has the industry in turmoil and some on the brink of financial collapse.

Cash fed cattle prices for the 5-area direct steers averaged $117.79 last week, and the result was a $190 per head increase in cattle feeding losses for a total per head loss of $550, according to calculations by Sterling Marketing, Vale, Ore. Cash cattle prices have declined $24 per cwt. over the past month. Beef packer margins increased $14 per head to $99.40.

A month ago cattle feeders were losing $270 per head, while a year ago profits were pegged at $200 per head, according to Sterling Marketing . Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 73%.

A month ago beef packers were earning $118 for every animal processed, while a year ago packers were losing $60, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $19 per hog last week, an increase of $4 per head from the previous week and up $7 from a month ago.

Pork packers saw their margins improve $1 per head to $14. Negotiated prices for lean hogs were $72.85, per cwt. last week, an increase of $1.71 per cwt. from the previous week. Cash prices for fed cattle are $42 per cwt. lower than last year, and negotiated hog prices are $38 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $506 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $372 per cow.

Profit Tracker: $40 Gains, Packers Slip

Fri, 07 Jul 2023 19:16:43 GMT

Last week’s $2.50 rally in the cash market was another step in the right direction, but closeouts remain $26.46 per cwt. short of break even. Cattle feeding margins improved $40 per head which left losses at $343, according to calculations by Sterling Marketing, Vale, Ore.

Last week’s 5-area cash price was $136.69 per cwt., well short of the $163.15 per cwt. required to break even. Beef packer margins declined $37 per head, resulting in average profits of $13 on every animal processed. Packer margins have declined $70 per head in the past month.

A month ago cattle feeders were losing $360 per head, while a year ago profits were pegged at $213 per head, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 74%.

A month ago beef packers were earning $83 for every animal processed, while a year ago packers were losing $69, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $14 per hog last week, a decrease of $3 per head from the previous week and up $1 from a month ago.

Pork packers saw their margins improve $2 per head to $23. Negotiated prices for lean hogs were $71.56, per cwt. last week, a decrease of $1.38 per cwt. from the previous week. Cash prices for fed cattle are $32 per cwt. lower than last year, and negotiated hog prices are $23 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $490 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $277 per cow.

Profit Tracker: A Step Back

Fri, 07 Jul 2023 19:16:33 GMT

The march toward break even for cattle feeders stumbled last week as average losses increased $36 per head, leaving closeouts $113 in the red, according to the Sterling Beef Profit Tracker.

Feedyard margins have improved steadily the past six weeks, finally falling the below the triple digit loss mark two weeks ago for the first time in more than a year.

The retreat for feeding margins comes despite a $1 gain in cash cattle prices. USDA’s 5-area direct price was $139.04, yet breakeven prices increased to $147.73 due to higher feeder cattle prices calculated against last week’s marketings.

Feeder cattle prices averaged $192.24 against the fed cattle sold last week, an increase of roughly $50 per head more than the previous week, according to John Nalivka, president of Sterling Marketing, Vale, Ore. The total cost of finishing cattle marketed last week was $1,928 per head.

Beef packer margins improved $54 per head, earning profits of $93 per animal. Packer margins are about $78 per head better than a month ago.

Sterling Marketing estimates feedyards lost a cumulative unhedged $4.7 billion in 2015, with average weekly losses of $239.26 per head. That compares to an unhedged profit of $3.9 billion in 2014, and losses of $1.1 billion in 2013.

A month ago cattle feeders were losing $224 per head, while a year ago feedyard closeouts were $172 in the red, according to Sterling Marketing. Feeder cattle represent 77% of the cost of finishing a steer, compared with 81% a year ago.

A month ago beef packers were earning $15 for every animal processed, while a year ago packers were losing $48 per head, Sterling Marketing estimates.

Farrow-to-finish pork producers found profits of $6.10 per hog last week, about double the $3.05 profits of a week earlier.

Pork packers saw a $3 increase in profit margins to $12.62 per head. Negotiated prices for lean hogs were $64.69 per cwt. last week, down $1 per cwt. from the previous week. Cash prices for fed cattle are $24 per cwt. lower than last year, and negotiated hog prices are $4 per cwt. higher than last year.

Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $263 per cow. Last year’s estimated average cow-calf margins were $432 per cow. Cow-calf profits for 2014 were estimated at $517 per cow.

Profit Tracker: Gaining Momentum

Fri, 07 Jul 2023 19:16:30 GMT

A cash market rally helped add $62 per head to feedyard margins last week, ending with total average profits of $212 per head, according to the Sterling Beef Profit Tracker. USDA’s 5-area cash price increased more than $4 per cwt., closing the week at $129.01. The total cost of finishing cattle last week was $1,582, compared to $1,586 the previous week and $2,230 last year.

Beef packer margins increased $19 per head, resulting in average profits of $145 on every animal processed. Packer margins are about $100 per head better than a month ago.

A month ago cattle feeders were losing $30 per head, while a year ago losses were pegged at $64 per head, according to Sterling Marketing. Feeder cattle represent 72% of the cost of finishing a steer, compared to 78% last year.

A month ago beef packers were earning $46 for every animal processed, while a year ago packers were earning $13, Sterling Marketing estimates.

Farrow-to-finish pork producers earned $30 per hog last week, roughly the same as last week’s profits, but $4 better than a month ago.

Pork packers saw their margins improve about $2 from last week to an average of $7 per head. Negotiated prices for lean hogs were $76.88 per cwt. last week, an increase of $0.61 per cwt. from the previous week. Cash prices for fed cattle are $26 per cwt. lower than last year, and negotiated hog prices are $4 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $177 per cow this year. Last year’s estimated average cow-calf margins were $432 per cow.

Feeding Whole Cotton Plants to Cattle?

Wed, 05 Oct 2022 18:44:12 GMT

By Blair Fannin, Texas AgriLife Extension

Texas beef producers are exploring the use of whole cotton plants as a protein source for cattle due to extreme drought conditions, according to a Texas AgriLife Extension Service expert.

“Due to the continued extreme drought, many cattle producers are examining new options for feeding cattle instead of traditional grass hay,” said Dr. Larry Redmon, AgriLife Extension state forage specialist in College Station. “One new item with little nutritive value information is grazing unharvested cotton plants, baled whole cotton plants, (which) are simply baled cotton.”

Several livestock producers have inquired about crude protein value in cotton plants as well as energy content, Redmon said.

“In many places where cotton lint yield was so low, many people were considering baling their whole cotton plants and feeding it to their cattle or grazing the standing cotton.”

Redmon said he had never had the question before, but received some fresh cotton plant samples for analysis. Additionally, Dr. Tryon Wickersham, Texas AgriLife Research nutritionist in College Station, began testing cotton plant samples that he collected as well. Wickersham’s samples had already been defoliated or had been baled and were being fed directly as the cotton module.

The preliminary results were quite interesting, Wickersham said.

“Although a non-traditional feedstuff for cattle, the presence of the cotton seed with its high fat content and cellulose (lint) provides for a fairly high quality feedstuff,” Wickersham said. “The fat content is quite a bit higher than would normally be fed to beef cattle and some scouring may occur, but the animals do well with the cotton diet.”

Preliminary results included the following:

Fresh whole cotton plants, including stems, leaves and bolls: crude protein 13.3 percent, total digestible nutrients 62.4 percent.
Whole cotton plants including stems and bolls, but minus the leaves: crude protein 11.2 percent, total digestible nutrients 58.8 percent.
Cotton and seeds from a harvested cotton module: crude protein 15.6 percent, total digestible nutrients 59.4 percent.

Wickersham suggests the cotton could be used as a source of supplemental energy.

Meanwhile, Dr. Gaylon Morgan, AgriLife Extension state cotton specialist, notes most cotton defoliation or desiccation products prohibit grazing or feeding to livestock feed for at least 30 days to 45 days.

“We recommend referring to the product label to ensure the minimum labels restrictions are met,” Morgan said.

Redmon said weather conditions are not forecast to improve in the near future and those who continue to hold cattle during these unprecedented drought conditions will find it difficult to find hay.

“They will also pay extremely high prices for hay they do find, and can set themselves up for significant environmental damages by keeping animals in pastures that are devoid of any ground cover,” Redmon said. “As reluctant as we are to sell cattle, the best option from an economic and ecological standpoint is likely to simply sell out.”

Redmon also advises a sample of any cotton or cotton plants to be grazed should be analyzed for nutritive value prior to feeding or grazing.

Understand the Limits of Fecal Egg Count Reduction Tests

Wed, 05 Oct 2022 18:44:12 GMT

Source: Pfizer Animal Health

Many producers rely on fecal egg count reduction tests (FECRTs) to determine which parasites are affecting their herds or whether they might have resistant parasites on their property. However, knowing the facts about the tests can help you decide whether they are the right choice for your cattle — and your wallet.

An FECRT is a field-based tool that gives a qualitative estimate of internal parasite reduction in animals treated with a parasiticide. Many producers and veterinarians use FECRTs, but because the tests have many limitations, they often are misused or misinterpreted.

“FERCTs can be a useful tool if the producer has the right expectations of what they are looking for and are aware of the test limitations,” says Gary Sides, Ph.D., cattle nutritionist, Cattle and Equine Technical Services, Pfizer Animal Health. “This test can help determine which adult parasite groups are present and qualitatively evaluate the efficacy of recent deworming treatments.”

Even though many producers rely on them, FECRTs may often provide misleading results, Dr. Sides notes.

“You cannot distinguish between worm species that have similar-looking eggs,” Dr. Sides says. “And FECRTs are not able to account for larval stages since larvae do not lay eggs. Also, because of the immune system response, fecal egg counts do not correlate to abomasal or intestinal worm burdens in animals older than 6 months.”

In calves less than 6 months of age, there can be a fair correlation between egg numbers and adult worm numbers, except for the internal roundworm genus, Nematodirus. Additionally, fecal counts will produce a false negative results for inhibited larvae of Ostertagia ostertagi (the brown stomach worm) — one of the most damaging parasites.

For FECRTs to provide valid results and show the success of an operation’s deworming practices, the fecal sample must also be collected and analyzed properly.

“For the most accurate results, fecal samples must be taken all from the same animal, before treatment and again about three weeks after treatment,” Dr. Sides says. “These samples also need to be taken from the rectum — not off the ground — to ensure the feces are not contaminated with soil nematode eggs. Once samples are collected and submitted, a laboratory technician will conduct an analysis and report the findings on an eggs-per-gram basis.”

Dr. Sides adds that although fecal egg counts and FECRTs can be useful in evaluating your parasite-control program, conducting yearly performance evaluations and keeping accurate performance records are much more reliable and useful than counting eggs.

“To ensure that you are maximizing your parasite-control program, animals should be dosed properly, products should be stored according to label indications, and you should work with your veterinarian to design a strategic deworming program that includes all classes of dewormers in the spring and fall,” Dr. Sides says. “This conversation with your veterinarian should give you a reliable, efficient way to protect your cattle and bottom line.”

DNA Test for Gain, Grade Available Soon

Wed, 05 Oct 2022 18:44:12 GMT

Source: Certified Angus Beef

A new DNA test for marbling and post-weaning growth will soon help cattle producers better hit the high-quality beef target. The tool, set to debut in early 2012, will be made available under a development agreement between Angus Genetics Inc. (AGI) and Pfizer Animal Genetics, the companies announced.

Exclusive marketing rights are reserved for Certified Angus Beef LLC (CAB), in line with the company’s continuing effort to increase the supply of cattle for the brand. AGI and CAB are subsidiaries of the American Angus Association.

The test is being designed for use on high-percentage, commercial Angus cattle sired by registered bulls, according to AGI President Bill Bowman. “It should provide a valuable tool to increase the precision of selection decisions at the ranch, as well as differentiating value for the feedlot,” he said.

Test results will take the form of an index, which is being finalized this fall, said Mark McCully, CAB assistant vice president for supply.

“There have been lots of advancements in the purebred cattle industry utilizing DNA for selection,” Bowman said. “But this will be the first test at a price point that is economically feasible for commercial cattlemen. The American Angus Association, its subsidiaries and Pfizer Animal Genetics are excited to partner on bringing this technology to market for the users of Angus genetics.”

Scott Bormann, business director, Pfizer Animal Genetics, says the development of this product is another example of the strategic partnership between the companies.

“We appreciate the American Angus Association and its affiliates continuing to foster innovation in the field of genetic evaluation,” Bormann said. “The forward-thinking collaboration should result in a DNA test that helps continue to advance genomic use and application, the Angus breed, as well as meet consumer demand for high-quality beef.”

McCully noted what are expected to be popular uses for the tool. “This is going to allow for more accurate replacement heifer selection and targeted management in feeding Angus cattle,” he said. “With demand for high-quality beef at an all-time high, commercial cattlemen will soon gain a greater ability to identify those cattle most able to access premiums in that marketplace.”

Heavy Rainfall Causes Forage, Pasture Challenges

Wed, 05 Oct 2022 18:44:12 GMT

Source: Ohio State University

It’s probably best not to invoke the old saying “Make hay while the sun shines” to forage producers this year. The sun hasn’t been shining very often, and they haven’t had the ability to make much hay.

Ohio saw a record rainfall in April with a statewide average of 7.42 inches -- that’s compared with 2.2 inches in April 2010. And so far, May has brought with it higher-than-normal rainfall as well.

“I’ve seen hay fields really suffering because of the excessive moisture,” said John Grimes, beef coordinator for Ohio State University Extension. “Cooler-than-normal temperatures have also impacted growth.”

Grimes and Jeff McCutcheon, OSU Extension educator in agriculture and natural resources, say livestock farmers they have talked with have tried to treat pasture gently this spring -- not grazing as much as usual to reduce damage to the sod.

“The forage is maturing,” McCutcheon said. “Normally they’d be trying to rotate rapidly through their fields to keep up with the grass. But this year, the forage is getting ahead of them, which means lower quality and lower yield later in the summer.”

McCutcheon said the nutritional quality in forage is still within an acceptable range for most livestock. “But if they’re heavily milking a dairy cow or they have animals they’re trying to grow, they might need to watch it. The higher the nutritional demand, the more you need to check the quality and possibly make some adjustments.”

More information on taking forage samples and interpreting test results is available in the OSU Extension fact sheet, “Forage Testing for Beef Cattle,” at http://ohioline.osu.edu/anr-fact/0002.html

The wet weather also has prevented new seedings of alfalfa and orchardgrass. “There’s still a window to plant other options,” McCutcheon said. “Sorghum/sudangrass, pearl millet -- those are the typical standby summer annuals to consider. If they’re going to graze, Italian rye grass and some brassicas are options. And, you can still plant corn for silage. That’s another option.”

Grimes said another option might be to plant soybeans and use the income from the crop to buy extra feed. “As with all farming, the big variable is the weather,” Grimes said. “To spread your risk out, consider a variety of strategies. It’s not a one-size-fits-all. Look at all of your resources before coming to a decision.”

Grimes added that farmers may want to plan now to attend the Ohio Valley Extension and Education Research Area’s Beef and Forage Field Day, scheduled for Aug. 25 at the Jackson Agricultural Research Station, to learn more about how to respond to this type of weather pattern. More information about the topics to be addressed will be available in coming months at http://beef.osu.edu .

“There’s a lot of frustration right now,” Grimes said. “There’s just too much water.”

Beef Profit Margins: Everyone Wins

Thu, 22 Sep 2022 04:55:44 GMT

There are few losers in the cattle market right now. From packers all the way down to cow-calf producers, current prices this summer are turning profits far into what is typically a seasonal lull.

While packer margins ended July very high, feedlot margins also remained high. Consumer demand for beef has outpaced many expectations and is supporting these higher prices throughout the summer months.

From the weekly Sterling Beef Profit Tracker, cattle feeders saw profits fall $30 from the week prior. For the month, packers saw July profit margins only drop $31 from the previous month. Packers were still netting $162.68 per head, according to Sterling Marketing, Inc.

Click here for Sterling Marketing’s Packer Margins report.

For the August to December time period, margins are expected to drop below $100 per head, but still remain in the black.

BT Feedlot Hereford Steers Fat Cattle

© Wyatt Bechtel

Profitable margins from packers are supporting fed cattle prices, Sterling reports. Feedlot margins ended July at $276.61 per head, down $78.26, but still tracking impressive returns.

Click here for Sterling Marketing’s Cattle Feeding Margins report.

Cargill Goes Tech With Plan to Nurture New Wave of Food Startups

Thu, 22 Sep 2022 02:34:37 GMT

(Bloomberg) -- Long synonymous with the buying and selling of U.S. grain, agricultural giant Cargill Inc. is taking a page out of Silicon Valley’s playbook with a startup accelerator that it hopes will identify important new food technologies.

Techstars Farm to Fork Accelerator is a partnership involving Cargill, water and hygiene technology company Ecolab Inc. and venture-capital firm Techstars. The initiative will focus on food security and safety, and will begin accepting applications next month. The first class of 10 startups will go to Cargill’s hometown of Minneapolis next summer and spend 13 weeks building their businesses and raising capital.

“We’re 152 years old and you don’t get that way without the courage to disrupt yourself,” Justin Kershaw, Cargill’s chief information officer, said in a telephone interview. “This is going to be disruptive and we want to be in the mix there and creating the disruption internally and externally.”

Agricultural technology is a burgeoning part of the food and farming industries, as farmers and corporations wrestle with how to feed the world’s growing population in a sustainable way. Early-stage investment in so-called agrifood technology was $4.4 billion in the first half of 2017, up 6 percent from a year earlier, according to AgFunder, a San Francisco-based firm that connects investors with agricultural startups.

Worldwide Interest

For Cargill, the accelerator is another step in its evolution into less traditional and potentially higher-value areas. One of the world’s largest private companies, it has been overhauling its business after posting a rare quarterly loss in 2015.

The accelerator, which will operate for three years, is expecting applicants from around the world, said Brett Brohl, its managing director.

“How do you feed the world in 30 years in a sustainable way?” he said in a telephone interview. “When there’s big problems and there’s big opportunity, entrepreneurs tend to be the one’s that figure out how to solve those problems.”

©2017 Bloomberg L.P.

Watch Dewormer Dosage

Thu, 04 Mar 2021 16:40:56 GMT

Source: Pfizer Animal Health

Operating costs continue to rise, making it more critical than ever for producers to ensure they are getting optimal results from their cattle dewormer. To get the best result, it pays to dose and store the product correctly since both factors can affect product efficacy.

To determine proper dosage, it is essential to have an accurate weight of each animal — underestimating weight can lead to underdosing of dewormers. Several methods are available for determining an animal’s weight, including weight tapes and visual observation; however, using approved and properly calibrated livestock scales are the most accurate and consistent for determining body weight. Visual observation is usually very inaccurate and not recommended for use when determining medication dosages for which weight is important.

“The average cow in the United States weighs about 1,350 pounds,” Gary Sides, Ph.D., Cattle Nutritionist, Pfizer Animal Health Veterinary Operations. “However, most producers are generally dosing to a 1,000-pound cow when many weigh much more than that. By underdosing, we run the risk of allowing parasites to become resistant.”.

By taking extra precautions with the storage and handling of dewormers, producers can help ensure a product’s effectiveness. Be sure to check the label for storage temperature instructions and follow them closely.

“Read the label directions before using any animal health product,” Dr. Sides says. “This reduces the risk of side effects, tissue residues, along with a multitude of other reasons besides efficacy and cost.”

Solving the Parasite Puzzle

Thu, 04 Mar 2021 16:37:01 GMT

Treat the right worms at the right times with the right dose of the right products. That might sound relatively simple, but as worms and the cattle industry evolve, it’s essential to customize parasite-control programs.

Calendar-based deworming recommendations, in many cases, no longer provide the most cost-effective use of time or financial investment. Production environment, weather and biosecurity practices influence control priorities as well.

Parasite control in cattle has become more complex, partly because of worm populations developing resistance to some anthelmintics, says Tom Craig, a DVM, Ph.D., and retiree from Texas A&M who still spends time at the veterinary diagnostics lab. Movement of cattle from cow-calf to stocker operations, heightened in drought years, blurs the geographic lines of parasite distributions and likely introduces species to previously unaffected pastures.

“Where are you buying your worms from?” Craig asks.

Traditionally, strategic deworming has meant treating cows and calves in the spring, before turning out to pasture, to prevent shedding of parasite eggs, and then treating again in the fall to remove parasites they picked up during the grazing season. This approach doesn’t work for all production environments, and no single treatment or strategy will work for every operation, Craig says.

Ostertagia ostertagi, or the brown stomach worm, remains the primary nematode parasite causing production losses in cow-calf herds, Craig says. Within herds or surrounding areas ranchers could also face other types of worms including Cooperia species, Haemonchus, Nematodirus and liver flukes. The ideal timing for deworming varies based on type of worm, as does the degree of drug resistance.

Older cows generally develop a tolerance to Haemonchus species but the worm can cause damage, even in adult cows, when introduced to herds not previously exposed. Some Haemonchus populations have developed resistance to the macrocyclic lactone class of dewormers, which includes avermectins. These worms are active in warm weather, but can spread during the winter in the South.

Ostertagia, Craig says, reproduce and spread primarily during the winter in the South and the summer in the North. They are active above 50°F and go dormant during the hottest, driest weather, only to emerge later. Cattle ingest Ostertagia eggs while grazing; the eggs hatch and mature worms damage the stomach lining and impair digestive function. In Type II ostertagiasis, the worms encyst in the abomasum during cold or dry seasons and re-emerge later.

Most cows develop a tolerance to Ostertagia by five years of age. Depending on their tolerance level though, cows infested with Ostertagia can experience loss of weight, feed efficiency, body condition and even reproductive ability.

Customizing parasite control is a matter of timing, says University of Florida veterinarian Max Irsik, with regard to the:

life cycle or pasture buildup of infective larvae at deworming.
age of the cows.
overall body condition of the herd and individuals within the herd.

Older cows in good body condition might be best left untreated. If nutrition for the herd is adequate, thin cows or poorly conditioned cows are likely candidates for deworming. This could save significant pharmaceutical costs while helping minimize parasite resistance within the herd, Irsik says,
Parasite distribution isn’t usually consistent across the herd, Craig adds. “It’s the 20/80 thing,” he explains. “Twenty percent of the herd will have 80% of the worms.”

Craig stresses the importance of understanding how local climates and production systems affect the Ostertagia life cycle, pattern of infection and the duration of efficacy for anthelmintics. In the southern Plains, for example, Ostertagia tends to enter its dormant stage in late spring or early summer as the weather turns hot and dry, with adults emerging and egg shedding occurring from the fall into early spring. In the North, the pattern is reversed, with cold winter weather causing the worms to enter their dormant state and Type 1 infections taking hold in spring and summer.

Craig generally recommends deworming a cow herd in late spring to early summer with injectable avermectin to control Ostertagia. For suckling or weaned calves, he turns to white drench dewormers to control Cooperia and Haemonchus species. Cooperia, he notes, have become resistant to macrocyclic lactones in many areas.

On his Missouri operation, Mike John mainly uses injectable dewormers, and sometimes an oral drench, rather than pour-on products. John also serves as director of MFA Health Track and says many ranchers in the a value-added cattle-marketing program do the same for more reliable dosage and efficacy.

On his fall-calving operation, John usually deworms cows and calves 15 to 20 days after turning out to pasture in the spring, just before rotating them to the next pasture. This allows time for the larval worms picked up on the first pasture to mature. The treatment kills them and thus prevents egg shedding on subsequent pastures through the season. After calves are weaned in the spring, cows don’t return to the chute again until they calve, so he uses a long-acting injectable and pasture rotation to keep parasites under control through the grazing season.

Veterinarians increasingly promote injectables or oral dewormers for optimum efficacy. Canton, Mo., veterinarian Dan Goehl steers clients away from pour-ons and has reintroduced oral drench into some herds. “In cattle going into a drylot that will not again go to grass, we use combinations of drench and an avermectin. We try to be aware of the economic and resistance impact when choosing what to use on pasture cattle.”

Work with a veterinarian to devise and monitor a parasite-control strategy, Craig stresses. If performance and reproductive efficiency decline, strategic changes in timing or product selection could make a difference. If resistance seems to have developed, conduct fecal egg count reduction tests to evaluate efficacy of deworming products.

Declining production can indicate problems beyond parasites. Quoting a former student, Craig says, “You can feed a cow out of a worm problem, but you can’t worm a cow out of a feed problem.”

Integrate Fly Control for Disease Prevention

While external parasites, particularly flies, have always demanded attention, effective fly control has become even more critical in recent years. Given USDA’s veterinary feed directive and the limitations to purchase and use medicated feeds to prevent and control pinkeye and anaplasmosis, focus on controlling flies as a means of preventing disease.

The issue of drug-resistant worms also plays a role in controlling external parasites. Missouri veterinarian Dan Goehl says overuse of pour-on macrocyclic lactone products leads to risk of resistant parasites. The low price of some pour-on anthelmintics encourages producers to use them in place of products meant specifically for fly control. “Often when they are used for this purpose they are dosed incorrectly, misapplied and mishandled,” he says. “It is not uncommon to hear of a producer using them monthly for fly control.”

South Dakota veterinarian Jake Geis, with the Sioux Nation Ag Center, says to avoid macrocyclic lactone pour-ons for external parasites and use a permethrin insecticide, preferably with an insect growth regulator. His staff gives specific instructions on how to apply the permethrin products to maximize efficacy, rather than simply sending the product out the door, he says.

Bottom line: Rotate insecticides and use sanitation and other management practices to minimize the stress, disease and resistance issues associated with flies.

Tyson Foods on the Hunt for Acquisitions

Fri, 20 Nov 2020 05:49:14 GMT

(Bloomberg) -- Tyson Foods Inc. is hungry for more deals.

The largest U.S. meatpacker is looking to acquire companies that would boost its food brands and geographic reach, Chief Executive Officer Tom Hayes said in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland, last week. It also has an eye on expanding its international footprint by adding operations and increasing U.S. exports.

“If we can find those that are bolt-on to our current system that gives us more capacity in a growing category, that’s great,” Hayes said. However, valuations have been “very high,” forcing Tyson to take a cautious approach, he said.

While Tyson remains among the largest domestic processors of chicken, pork and beef, its recent acquisitions have been centered on prepared foods. Hayes, who’s been at the helm for about year, wants to continue the trend with a goal of transforming the commodity giant primarily linked with chicken into a “modern food company,” he said.

U.S. mergers and acquisitions may hit a record high this year amid the recent tax reform, according to a recent report from Bank of America Merrill Lynch. Hayes said the tax changes are “very positive” for Tyson and may save the company more than $300 million, some of which it will use to boost capital expenditures.

Last year, Tyson purchased sandwich maker AdvancePierre Foods Holdings Inc. for about $4 billion, its largest acquisition since the 2014 takeover of Hillshire Brands Co., and also bought Original Philly Cheesesteak Co. for an undisclosed sum. Tyson also recently boosted its stake in Beyond Meat, a plant-based burger manufacturer.

Hayes cited a recent surge in U.S. meat production as one of the challenges for the year ahead, as the larger supply suppresses prices. American output of red meat and poultry is expected to reach a record in 2018, topping 100 billion pounds for the first time ever, government estimates show. It’s also getting tougher to attract workers, and Tyson has boosted wages and is looking at more ways to use automation and robotics in its plants.

“The labor market will get tighter,” Hayes said. “That’s exactly the reason we need to be spending more money on innovation. Technology is going to play a critical role.”

Meanwhile, Tyson Foods Inc. is boosting its bet on meat that comes from the lab instead of the slaughterhouse.

The company’s venture capital arm has invested in Memphis Meats Inc., a company that produces cultured meat without raising livestock or poultry, Tyson said in a statement on Monday. It didn’t announce the terms of the deal.

Springdale, Arkansas-based Tyson has already put money into Beyond Meat, a U.S. company known for its plant-based burgers, part of strategic shift for Tyson, which is the country’s largest meat processor.

©2018 Bloomberg L.P.

The (New)Case for Animal ID

Fri, 20 Nov 2020 05:49:14 GMT

Riding a crest of popularity, Chipotle Mexican Grill’s profits reached $445 million on revenue of $4.1 billion in 2014. Then the crash came. In the fall of 2015, more than 500 people fell ill after eating Salmonella- and E. coli-contaminated Chipotle burritos. The Centers for Disease Control and Prevention (CDC) found a critical lapse in the restaurant chain’s trace back system: once ingredients arrived in stores, all tracking stopped. The CDC wasn’t able to determine exactly which foods were responsible. Chipotle’s 2016 revenue fell 13.3% to $3.9 billion, and profits dipped 95%. In response, Chipotle has implemented a system that uses package bar codes to identify which supplier sent which item to which restaurant tracking every ingredient “from seed to stomach.”

Many believe the Chipotle crisis underscores the need for a national animal identification system. They say it’s not a matter of if a crisis hits the livestock industries but when.

“Every week thousands of cattle are sold at auction, and within 24 hours they can be scattered a thousand miles from the auctions,” explains Derrell Peel, Oklahoma State University ag economist. “A disease outbreak at one of those locations means it would take weeks to trace those cattle in an effort to contain the disease. That’s the shadow the livestock industry is living under [without animal ID].”

Disease containment is just one of many reasons animal ID might soon be necessary. The U.S. food system is changing, too. Amazon entered the beef business when it bought Whole Foods Markets, and traceability is a core component of their model.

“The lack of an animal ID system is hindering our market access and commerce,” Peel says. “Virtually every other beef exporting country has an ID system in place.”

Uruguay, for example, has implemented one of the world’s most sophisticated supply chain tracking systems. Every calf born in the country is electronically tagged, and every stakeholder in the beef value chain is obligated by law to abide by the system. It’s a primary reason Uruguay exports nearly 75% of its production and has become the largest exporter of beef to China, displacing Australia.

Even in the U.S., the beef industry lags behind on the traceability scale. “More than 95% of all pork production premises have a registered PIN, or premises identification number,” says Dave Pyburn, vice president of science and technology at the National Pork Board. Support is high because the U.S. pork industry is much more dependent on export sales, he says.

As consumers demand more assurances about how and where their food is raised, the beef industry will be scurrying to play catch-up.

Purdue University economist Jayson Lusk says the demand for traceability hasn’t diminished. “Producers who are willing or able to participate are likely to be at a competitive advantage,” he adds.

Still, an industrywide animal ID system will face resistance as some legitimate concerns about privacy and market access exist.

“No producer has an absolute right to be able to sell cattle,” Lusk says. Rather producers compete in the marketplace and try to find customers who are willing to pay a price they’re willing to accept.

“Sometimes,” he adds, “that means adopting practices we’d prefer not to adopt so we have willing buyers.”

Drought Conditions Curb Beef Herd Expansion

Fri, 20 Nov 2020 05:49:14 GMT

Growth of America’s cowherd shows signs of stalling. As of Jan. 1, USDA reports total cattle and calves numbers at 94.3 million, which is an increase of less than 1% versus 2017. Total beef cows were 31.7 million—the largest level since 2008. However, breeding cattle inventories signal a decrease in the rate of expansion.

“The herd expansion is slowing down, and it looks like we’ll be at our peak cattle inventory numbers in 2019 or 2020,” says Randy Blach, CEO of CattleFax.

Since 2015, ranchers have added 2.4 million beef cows to their herds. This expansion was a sign of good times and ample forages, says John Nalivka, Sterling Marketing president. But, the tides have turned.

Drought spread across cattle country this past fall and intensified during the winter. The epicenter of the current drought rests over the Texas and Oklahoma Panhandles and southwestern Kansas, but extends into almost every state from the Gulf of Mexico to the Canadian border. This 14-state area is where 60% of America’s cowherds reside.

Drought conditions have already influenced beef production and cattle prices. Winter wheat grazing was poor, pushing cattle to feedyards earlier than planned. That led to larger feedyard inventories that could shift slaughter and production patterns. As of Jan. 1, 14 million head of cattle were on feed, which is largest amount since 2012.

“Beef production will be up 6% compared to 2017,” Nalivka says.

In 2017, the U.S. beef industry produced 745 lb. of beef per cow, and Nalivka projects that number to rise to 774 lb. per cow in 2018, a 4% increase.

JBS to Sell Five Rivers Cattle Feeding

Fri, 20 Nov 2020 05:49:09 GMT

JBS USA plans to sell Five Rivers Cattle Feeding to Pinnacle Asset Management, L.P., for approximately $200 million. Five Rivers Cattle Feeding includes 11 feedlots and has a total feeding capacity estimated at 980,000 head of cattle in Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas. As part of the purchasing agreement Five Rivers Cattle Feeding will continue to supply cattle to JBS USA’s beef processing plants.

“The sale of the Five Rivers Cattle Feeding assets and farms is a strategic move that will allow JBS USA to more efficiently deploy working capital and focus on the company’s core food and value-added products businesses,” says Andre Nogueira, CEO of JBS USA.

Representatives of Pinnacle Asset Management, an investment firm specializing in commodities and natural resources, voiced their approval of the agreement.

“The acquisition of the largest and most respected cattle feeding operation in the world continues Pinnacle’s strategic path of investment and development of our diversified, global, physical commodity platform, of which livestock is a critical sector,” says Jason M. Kellman, managing partner and chief investment officer of Pinnacle Asset Management.

JBS’s sale of Five Rivers Cattle Feeding is part of a divestment program to raise funds to cover a leniency fine of $3.2 billion against JBS S.A.’s owners. The Batista brothers, majority owners in the company, admitted to bribing government officials in Brazil.

After a plea deal they were later accused of insider trading and are currently waiting for trial.

The acquisition is pending U.S. regulatory and JBS S.A. board of directors approval and Pinnacle Asset securing the relevant funding.

Nogueira says the transaction completes JBS S.A.’s divestment plan.

No Fencing Payments In Sight

Fri, 20 Nov 2020 05:49:05 GMT

Eight months have passed since massive wildfires tore through the central and southern plains.

Nearly 2 million acres spanning four states was scorched by the fast-moving fires in March. Thousands of miles of fencing was destroyed. The rebuilding process has started thanks to the generosity of money, supplies and labor from across the country. Most ranchers are still waiting on payments from the federal government, though.

In Beaver County, Okla., rancher Bernie Smith has been building fence for weeks and will likely continue into spring.

“We built a mile yesterday and a mile the day before,” says Robert Moore, one of the volunteers helping Smith. “It’s pretty good for just an old country bunch from Tennessee.”

At $10,000 per mile, rebuilding fence is expensive. “We have not received any [payment] yet,” Smith says. “As we build our fences, we turn in our paperwork and they [Farm Service Agency, FSA] assure they’re going to pay us.”

It’s the same situation for the owners of Giles Ranch in Ashland, Kan. There, 30,000 acres and 100 miles of fence burned in less than two hours.

“I know no one who’s received a payment yet if they have their fencing completed. The people in our office are wonderful people, trained very hard to do their best for their job, but their hands are tied,” says Jenny Betschart, an Ashland, Kan., rancher.

Earlier this year, several UDSA offices were realigned to put FSA, the Natural Resources Conservation Service (NRCS) and the Risk Management Agency under one umbrella. The restructuring is an effort to improve customer service.

“You really can’t staff for disasters because typically you don’t know when they’re going to happen or you don’t know where you’re going to staff,” explains Steven Peterson, FSA acting administrator. “We’re finding we have to move a lot of resources to those disaster-affected areas to try to accommodate the workload.”

FSA’s emergency conservation program (ECP) provides funding to restore fencing from a natural disaster. Producers must complete paperwork and submit invoices to FSA.

“On the fencing side, they have to inspect every inch of your fence before you can get a payment,” Betschart says. “That’s thousands of miles in our county, and they expect two people in one office to efficiently inspect all of that?”

Peterson says NRCS and FSA are working together to inspect fences and split resources. They’ve pulled together “jump teams” of employees from other locations to help out.

Kansas lawmakers, Rep. Roger Marshall and Sen. Jerry Moran, introduced four bills in November they hope will improve livestock disaster programs through ECP and the Livestock Indemnity Program (LIP). Some producers have received payment from LIP for the cattle they lost.

“Our bill would allow them to go get this money payment ... before they build the fence,” Marshall says.

Ranchers will take the help anyway and from anywhere they can get it.

Montana Sees Heavy Snow Fall This Weekend

Fri, 20 Nov 2020 05:48:58 GMT

Snow is falling across a large portion of Montana today, bringing relief to areas struggling to control multiple wildfires . Some mountain passes could see up to 8” of snow by Saturday, with 12”-18” of snow falling above pass level. The storm will also affect eastern Idaho, western Wyoming and northern Utah.

A statement from National Weather Service in Great Falls said Webcam images across North Central and Soutwest Montana support higher snowfall totals than previously observed . As of 8:30 a.m. MDT on Friday, Sept. 15, Great Falls has recorded 1.40” of precipitation since the event began Wednesday evening, the agency reports.

Mother nature decided to go from summer straight to winter across the mountains of SW and NC Montana. Photo from Great Divide. #mtwx pic.twitter.com/jQscPtn7q4
— NWS Great Falls (@NWSGreatFalls) September 15, 2017

The latest forecast calls for heavy snow in the mountain passes, which could make driving difficult Friday and Saturday.

Friday morning, the National Weather Service issued a Winter Storm Warning, the first of the season, for elevations above 5500' until noon Saturday. This includes Kings Hill Pass, Flesher Pass, MacDonald Pass, Boulder Hill, Elk Park Pass, and Homestake Pass.

The area is desperate for any moisture at all. Producers in Montana shared photos of devastation from the Montana fires with AgDay.

As of Sept. 14, there were 64 active large fires in the U.S., affecting 1.6 million acres, according to the National Interagency Fire Center.

New numbers from USDA show the cost of fighting wildfires topped $2 billion in 2017 , a new record.

Cattle Markets Suffer August Swoon

Fri, 20 Nov 2020 05:48:49 GMT

Cattle markets moved lower this week, spurred by futures markets that nosedived on Wednesday. Compared to the previous week, USDA Market News reporters said feeder steers and heifers began the week at steady to $4 per cwt. higher prices. Late week trading, however, was $3 to $11 lower.

“There was optimism going into the week, in spite of August having a bad reputation for being tough on the markets,” Agricultural Marketing Service reporters said. “Despite the lower market, low feed costs and the surplus of corn in farmer feeder country continues to spur demand for steers. Prices in the Northern Plains and upper Midwest continue to be the highest in the nation.”

Direct fed cattle trade was called $1 to $3 lower, with the bulk of the week’s business conducted on Tuesday and Wednesday. Fed steers sold mostly at $115 to $116, with dressed sales at $185. Those prices are the lowest since December of last year.

Choice boxed-beef closed Friday $4.01 lower at $199.60, and Select $1.19 lower at $196.12, when compared to last Friday’s close. The Choice-Select price spread was $3.48 per cwt versus $6.30 per cwt last Friday.

Expect Stronger Weights Through Fall

During a recent segment of U.S. Farm Report, Don Close of Rabobank noted weekly slaughter data was showing stronger cattle weights in spite of the “aggressive marketing we saw throughout the spring.” Click above to hear his take on the exceptional margins that hedgers had earlier this year and why that might translate into heavier weights through the fall.

The last time cash fed prices and spot live cattle futures were this low was in December 2016, USDA says. The cooler temperatures throughout the past two weeks has helped relieve cattle from heat stress and allowed them to perform well in the feed yards. Livestock have seen quick gains from the previous month.

Mark Zuckerberg Visits a Cattle Ranch

Fri, 20 Nov 2020 05:48:45 GMT

When you have a cough, you visit a doctor. When you want to know where your food comes from, you should ask farmers and ranchers.

That’s what Mark Zuckerberg did this week. On July 13, he stopped and visited the Norman Ranch, near Piedmont, S.D. The technology entrepreneur learned about the process of raising cattle until they are harvested for meat.

“Several years ago at Facebook, our chefs cooked a whole pig. I remember someone saying it would be delicious but she wished she didn’t have to see where the meat came from. I’ve always thought we should be thankful and understand where our food comes from -- so for that year I set a goal to only eat meat that I killed and helped butcher myself,” Zuckerberg wrote in his Facebook post.

Zuckerberg also detailed the challenges farmers in that area are facing—longterm drought has forced many ranches in North Dakota, South Dakota and Montana to cull herds or find supplemental forages.

Technology farmers and ranchers use was obviously of interesting to Zuckerberg. Advanced machinery capabilities and drones made it in to his Facebook report. And yes “AI” does mean something different out here.

Read Zuckerberg’s Facebook post, shared on the Drovers Facebook page:

Amid Scandal, JBS Names New Chairman

Fri, 20 Nov 2020 05:48:38 GMT

Ensnared in an enormous corruption scandal, Brazilian president Michel Temer has vowed to serve out his term until the 2018 election. But many doubt Temer’s confidence.

“The government is hanging from a thin thread,” Jimena Blanco, head of Latin America research at Verisk Maplecroft, told the Financial Times . Brazilian’s confidence in their government is diminished by the fact the latest scandal comes less than a year after former president Dilma Rousseff was impeached.

Temer’s corruption was revealed two weeks ago when Joesley Batista, the former chairman of JBS SA, the world’s largest meat packer, released a secretly recorded conversation he had with Temer allegedly discussing bribes to be paid to the Brazilian politicians including the president.

Since that revelation, Batista and his brother, CEO Wesley Batista, have resigned their positions. Read more from Drovers.

Some High Plains Farmers Struggling After Fires, Drought

Fri, 20 Nov 2020 05:48:34 GMT

Deep snow is melting into western mountain streams, but some farmers and ranchers on the high plains are struggling amid a lengthy dry spell and the aftermath of destructive wildfires.

A swath of Colorado, Kansas, Oklahoma and Texas has been in a drought or near-drought condition for six months, putting some of the winter wheat crop in doubt.

The March fires burned nearly 2,100 square miles in the four states. Six people died. Agriculture officials say the fires also killed more than 20,000 cattle and pigs and damaged or destroyed about $55 million worth of fences.

“The first word you think of is devastating, financially,” said David Clawson, a farmer and rancher in southwestern Kansas who lost 40 head of cattle to the fires. “But it’s hard to really quantify yet. We’re just 30 days into it.”

The governors of Kansas and Texas have signed disaster declarations. The U.S. Department of Agriculture hasn’t calculated the total damages, but Texas alone estimated the cost to farmers and ranchers to be $25.1 million.

“That first week, we were in shock,” said Clawson, who also is president of the Kansas Livestock Association.

April rains on parts of the high plains have eased the drought and helped the grassland recover, but it could be weeks or longer before cattle can be turned out to graze, leaving some ranchers a choice of buying costlier feed or culling their herds.

“Some of the ground will not be grazed this year at all to let it recover,” said Oklahoma Agriculture Commissioner Jim Reese.

The U.S. Drought Monitor, operated by federal weather and agricultural agencies, showed much of the area either abnormally dry or in a moderate drought on April 18.

The outlook through June was for drought to persist in a crescent-shaped area from northeastern Colorado, across southwestern Kansas and into central Oklahoma. Drought could worsen in the Texas Panhandle, the outlook said.

Drought is a constant threat in this semi-arid region, which saw the worst devastation from the Dust Bowl of the 1930s.

Scant precipitation last fall left newly planted winter wheat struggling to take hold in many areas.

“It needs to germinate and emerge to hold the ground from erosion,” Colorado Agriculture Commissioner Don Brown said.

Farmers won’t know how healthy the wheat crop will be for a month or so.

“We just don’t know if we’ve got enough green growth and root strength,” Brown said.

Crops and grassland across the high plains thrived last year after a far worse drought from about 2010 to 2015.

Some ranchers had just begun to rebuild their herds after cutting back during the earlier drought, when grazing was poor.

Stanley Barby, a lifelong rancher in the Oklahoma Panhandle, said he had been adding to his herd slowly to protect the recuperating grassland.

“We were trying to let that grass recover from the drought and so we didn’t overgraze,” he said. “We stocked really slow.”

But the thicker grass turned into fuel for the wind-driven wildfire in March.

“That’s why the fire was so hot, why it did so much more damage than usual,” he said.

Barby said his ranch is 65 to 70 square miles, and fire charred about 50 square miles. He lost nearly 50 cattle, three houses and more than 150 miles of fence.

“We just put our heads down and go to work,” he said.

Barby, Clawson and other farmers and ranchers said they were overwhelmed by a flood of donations from farmers, ranchers and others who offered feed, fencing materials and cash. Students and 4-H members helped clean up.

“They’re just showing up, not asking for anything,” Clawson said.

“We’re just very grateful for all the support that we’ve gotten, and the thing is, none of us know how to say thank you, or in the right way,” he said.

Market Highlights: Undervalued Cattle Making Comeback

Fri, 20 Nov 2020 05:45:06 GMT

By: Andrew P. Griffith, University of Tennessee

FED CATTLE: Fed cattle trade was not well established at press. Asking prices in the South were around $135 while asking prices in the North were $208. The 5-area weighted average prices thru Thursday were $123.20 live, up $4.68 from last week and $198.56 dressed, up $8.56 from a week ago. A year ago prices were $163.74 live and $257.75 dressed.

The upswing in the cash market and the futures market last week is witnessing some follow through this week. The only slowdown is that packers are extremely hesitant to pay higher prices. It is understandable to be hesitant or even resistant considering asking prices in the South and North are $8 to $9 higher than last week’s price.

The feedlot is who has been losing money as of late, but the packer is not ready to relinquish the margins that continue to pay the bills. It appears the feedlot manager and the packer will be pulling rope the next few weeks to see who can acquire the best deal. There may be tough times ahead until holiday buying begins to support prices in November and December.

BEEF CUTOUT: At midday Friday, the Choice cutout was $211.21 down $0.01 from Thursday and up $8.24 from last Friday. The Select cutout was $197.93 down $1.06 from Thursday and up $8.24 from last Friday. The Choice Select spread was $5.04 compared to $5.04 a week ago.

Just as the Select cutout fell below the $200 mark and the Choice cutout was approaching the same, the beef cutout prices turned on their heels and experienced large gains this week. There are concerns about the domestic market, the export market, the value of the dollar, and competing meat prices which all impact the demand side of the equation.

Demand concerns are viable and impact the price of beef and thus the price of cattle. However, the fundamentals of the market are not much different from one year ago.

There is still a smaller quantity of beef production due to the relatively small cow herd. The relatively low production will continue to support prices the next couple of years. There will be a slow erosion in wholesale beef prices as well as retail beef prices as the cow herd grows and as beef production increases.

The Choice and Select cutout prices will likely be sub $200 once the supply side of the equation significantly changes. The supply side is the primary driver of where the market has been the past couple of years.

OUTLOOK: The first thing to remember with most agricultural markets is that they tend to overreact to good news but even more so to bad news. The cattle industry is not immune to these overreactions, and it has been evident with the price swings the past eighteen months.

Most analysts and cattle producers would agree that cattle prices last fall exceeded expectations and thus were higher than what the fundamentals of supply and demand would have warranted with perfect information. But, part of the allure to the cattle business and agriculture in general is the risk that is incurred due to the lack of perfect information.

Imperfect information in the market is a large part of why cattle prices witness rather large swings. So, prices exceeded expectations during the last half of 2014 and continued to do so the first half of 2015, but prices started a steady decline from the back half of June through August before dropping like a rock through last week.

The price decline has been fueled by extremely heavy finished cattle which depressed fed cattle price and thus feeder cattle prices. There is also some uncertainty about how many feeder cattle are still out in the country and how heavy those entering the feedlot over 800 pounds really are. Now that there is some indication the front end of the heavy cattle have been harvested, the fed cattle market and the feeder cattle market have regained some life. Most analysts and producers would say that feeder cattle and finished cattle have been somewhat undervalued the past several weeks which is likely the leading factor of prices making a small resurgence.

Based on the Tennessee weekly auction average steers are up $10 to $14 dollars compared to a week ago while heifer prices increased $6 to $11 over the same time period. There may be some additional upside potential for calf and feeder cattle prices, but it is important to remember that calf prices will be pressured as producers continue to set wheels under freshly weaned lightweight calves. The market will likely try to level out some the next several weeks which should provide buyers and sellers an opportunity to do business. Sellers should not be surprised if calf prices take another dip before gaining more traction.

ASK ANDREW, TN THINK TANK: A question was raised in Decatur County concerning why cattle feeding is concentrated in the Plains States and the Mid-West. First, it is less expensive to haul the cattle to the feed than it is to haul the feed to the cattle. Assuming 6 pounds of feed per pound of gain and 500 pounds of gain in the feedlot then it takes 3,000 pounds of feed per animal. It is less expensive to haul 62 animals weighing 800 pounds to the corn than it is to haul 186,000 pounds of corn to the truckload of animals. Transportation cost of an animal is about 25 percent of what hauling the feed would cost. Second, the harvest facilities are located in those regions. Then the question arises about why Texas feeds cattle but does not produce much corn. The cattle in the South are largely ‘ear cattle’ and are good at handling high temperatures. What they are not so good at is handling cold temperatures which results in poor performance and sometimes death in northern feedlots. Thus, they are kept in moderate climates for production purposes.

Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996.

FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –October $135.95 3.00; December $139.55 3.00; February $141.58 3.00; Feeder cattle - October $193.63 3.85; November $190.00 4.10; January $182.23 3.03; March $179.50 3.05; December corn closed at $3.77 up $0.01 from Thursday.

Cattle Numbers Up, But Prices Down

Fri, 20 Nov 2020 05:44:39 GMT

Cattle prices are very good, but for how long? The more people jump into production, the greater the likelihood of prices falling.
By: Les Harrison, University of Florida Extension

In a report dated July 24, 2015, the USDA’s National Agricultural Statistics Service (NASS) has stated there are 98.4 million head of cattle on U.S. Farms. This marks the first inventory increase since the pre-recession days of 2006.

The report also forecast the 2015 calf crop to be 34.3 million head. 24.8 million were born during the first half of the year and 9.5 million are expected to be born during the last six months of 2015.

Cows and heifers which have calved account for 39.8 million of the national number. Of the 39.8 million cows and heifers that have calved, 30.5 million head were beef cows and 9.3 million were milk cows.

In another USDA report dated July 30, 2015, the June price index for all meat animals is down 2.3 percent from the previous month and 1.6 percent lower than a year earlier. However, the June 2015 beef cattle prices were $8.00 higher than June 2014, but down $5.00 from May 2015.

This report also indicated hay prices have retreated. On average in the “all hay” category, June 2015 prices have dropped 7.5 percent from a month ago, and almost 18 percent from a year ago.

The June Index of Overall Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW), settles at 109 and is unchanged from May 2015 but is down 3.5 percent from June 2014.

The June 2015 Fertilizer index, at 92, is unchanged from May but is eight percent below June a year ago. Since this May, lower prices for nitrogen have offset higher prices for mixed fertilizer along with potash and phosphate.

For more information and data related to this topic, please see the USDA’s National Agricultural Statistics Service (NASS) General Economic Reports .

Chinese Billionaire Buys 1.7 Million Acre Australian Cattle Property

Fri, 20 Nov 2020 05:44:15 GMT

A Chinese billionaire purchased two cattle stations beside the Northern Territory-Queensland border in Australia for $34.62 million.

Xingfa Ma, owner of ball bearing manufacture Tianma Bearing Group, bought the Wollogorang and Wentworth stations, along with the 40,000 cattle roam the expansive properties.

According to Reuters , this is the third major Australian agriculture land purchase made by a Chinese investor in 2015. Ma has already purchased farmland in Australia such as vineyards and cattle stations.

The official sale of the stations occurred on July 16 and the following Monday it was announced Australia inked a deal with China to export live cattle for beef consumption.

Market Highlights: Cattle Prices Slide

Fri, 20 Nov 2020 05:44:03 GMT

Cattle prices fall while beef prices teeter-totter.
By: Andrew P. Griffith, University of Tennessee

FED CATTLE: Fed cattle traded $2 lower on a live basis compared to a week ago. Live prices were mainly $148 while dressed trade was mainly $238 to $240. The 5-area weighted average prices thru Thursday were $148.68 live, down $2.61 from last week and $238.01 dressed, down $2.19 from a week ago. A year ago prices were $151.35 live and $242.36 dressed.

Based on weekly weighted average fed cattle prices, this is the first week since September 2013 where the fed cattle market experienced a year over year price decline.

The last time year ago prices were higher than the same week prices in the current period was just prior to sequestration which occurred in October of 2013. Since that time, the fed cattle market made a steady march up the price chart all the way through the end of 2014. Since the end of 2014, live cattle prices actually have a steady to downward price trend through the first six months of 2015.

The downward price trend has become more prevalent in the past three months. Live cattle prices have declined more than $13 the past seven weeks and nearly $19 since the first week of April. Since April, a 1,380 pound steer has lost $260 worth of revenue due to output price alone which wipes out profits.

BEEF CUTOUT: At midday Friday, the Choice cutout was $254.53 down $0.63 from Thursday and up $3.69 from last Friday. The Select cutout was $249.68 down $0.45 from Thursday and up $3.89 from last Friday. The Choice Select spread was $4.85 compared to $5.05 a week ago.

As Independence Day quickly approaches, beef is likely experiencing its last shot of support until Labor Day purchases. Most grocers and restaurants have already finished their purchases for the holiday, but they may have to restock some of the inventory following the long holiday weekend.

Meat proteins have met significant resistance in 2015 relative to 2014. The strength of the dollar relative to other currencies has put a damper on some export markets while the value of the dollar in conjunction with record U.S. beef prices has slowed other export markets.

Commercial beef production through May was down 4.7 percent compared to the same time period one year ago. Alternatively, commercial pork production has increased 5.6 percent while chicken production has increased 3.8 percent the first five months of 2015 compared to the same time period a year earlier.

Increased production of competing meats will result in lower prices relative to beef. One thing that could support beef would be if the broiler industry is hit by highly pathogenic avian influenza this fall during migration.

OUTLOOK: Feeder cattle prices were steady to firm this week across weekly auction markets while calf prices softened. How long feeder cattle prices will maintain current price levels is a major unknown especially with the limit lower move Thursday on feeder cattle futures.

Fed cattle prices normally soften during the heat of summer but prices have declined more than many industry experts expected. The fed cattle price decline will undoubtedly put pressure on feeder cattle prices. Additionally, corn prices have started a quick ascent with more than a 40 cent per bushel price increase on the December contract in the past two weeks which will put downward pressure on calf and feeder cattle prices.

It sounds like the odds are stacked against cash feeder cattle prices with the decline in feeder cattle futures, the decline in fed cattle prices, and the rising corn prices. However, the cash price for feeder cattle has not been as responsive the past six to twelve months to price movements related to the futures market.

If feeder cattle futures continue to decline then it is almost certain cash feeder cattle prices will decline, but cash prices are not likely to be as volatile as futures market prices. It is important to remember that feeder cattle prices generally reach their yearly apex between the end of July and the first couple of weeks of September. Thus, seasonality is on the side of feeder cattle producers the next few months.

Producers planning to market calves in the fall may want to consider some type of price protection such as Livestock Risk Protection Insurance, futures hedge or forward pricing, because there have been some signals for the fall market to be soft relative to today’s market price. This does not mean the bottom will fall out of prices this fall, it just means that producers should be prepared to see slightly softer prices than current prices and much lower prices than year ago prices.

ASK ANDREW, TN THINK TANK: Several producers have asked questions regarding THE Beef Cattle fIRM which is a record keeping software for cow-calf producers developed at the University of Tennessee Institute of Agriculture. The software is a tool to maintain individual cow, bull, and calf performance, sale information, and inventory records. The program is primarily a production record keeping system that allows several different reports to be compiled with the click of a button. However, if additional analysis is desired, users of the program can import and export data in a spreadsheet. For more information concerning the program, producers can visit THE Beef Cattle fIRM page on our site where they will find functions of the program, computer system requirements, and cost of the program. Additionally, the website contains videos of producers who have been successful in using the software program and how they use it to keep records for their operations.

Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996.

FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –June $148.40 -0.10; August $148.53 -0.05; October $151.00 -0.10; Feeder cattle - August $217.25 -1.80; September $215.90 -1.38; October $214.60 -1.10; November $213.50 -0.65; July corn closed at $3.85 up $0.09 from Thursday.