Consider what passersby think when they see your headquarters or machinery on the highway. Do you want them to draw their own conclusions, or do you want to be the one telling the story?
A variety of production and marketing practices are available to help cow-calf producers enhance calf values. Though these practices are not new, many are still adopted by only a small percentage of producers. The following summarizes several surveys and feeder cattle pricing studies.
Concerns about livestock prices took some air out of the Purdue/CME Ag Economy Barometer, pushing the new index down to 97 in May from April’s 106.
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.
Will prices continue to decline, or will they trade steady or find support between May and October? That is a tough question at this point, but it is hard to imagine further significant declines at this time.
It seems certain that herd expansion has slowed to a snail’s pace compared to one year ago, but from a historical standard, expansion is likely still moving at a fairly rapid clip.
USDA's May Cattle on Feed report said there were 1.3% more cattle on feed than a year ago. April placements were up a surprising 7.5% and April marketings were up 1.2%.
There’s a close relationship between the two markets, explains Mark Gold, Top Third Ag Marketing. Meanwhile, hog producers should look to buy puts if prices continue to climb on demand from China.
Monthly fed cattle net returns have been negative since December 2014. A few months ago, it appeared that we would climb above breakeven this spring. However, that was before the recent drop in fed cattle prices.
Most analysts expected feedyards to be near breakeven by the time the calendar turned to May. May is here and the underperforming cash fed cattle market has kept feedyards struggling.
The Choice cutout was $212.05 down $0.45 from Thursday and down $8.45 from last Friday, while fed cattle trade was $2 to $3 lower than a week ago on a live basis.
There were 467 million pounds of beef in cold storage at the end of March. That was 5% less than the month before and 3% less than a year earlier.
What caused last year’s cattle price collapse? Washington could have some answers after an investigation of why cattle prices fell 15.1%in the last half of 2015.
Spring time marches on: Prospective Plantings was quite the surprise, a major moisture event causes flooding in the southern plains with concerns of excess up through Nebraska and generous needed snowfall in Colorado, and the deadline for filing your income taxes passes.
In a high or low cattle market environment, capturing the most pounds per calf affects a producer’s bottom line, said a Texas A&M AgriLife Extension Service economist.
Cash cattle prices may have been stuck in neutral last week, but cattle feeders saw an impressive gain in margins as the price of feeder cattle factored into closeouts dropped significantly.
The plantings report revealed that U.S. producers intend to plant 93.601 million acres of corn this summer, up 6 percent from last year’s 87.999 million acres and more than 2.6 million acres higher than even the highest trade estimate.
Cattle feeders generally expected margins to be much better by now. An anticipated spring rally that could have erased a lot of red ink has failed to materialize, leaving feedyard closeouts stuck in neutral with near $200 losses.
Cattle feeding margins gained only modestly, despite the fact feeder cattle factored into closeouts were $40 per head less than the previous week.
While the adverse impact on those directly affected is certainly real in both financial and emotional ways, it is also important to step back and examine any broader, cattle market impacts.