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OSU Extension - Fairfield County
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OSU Extension BEEF Team
BEEF Cattle questions may be directed to the OSU Extension BEEF Team through Stephen Boyles or Stan Smith, Editor
You may subscribe to the weekly Ohio BEEF Cattle letter by sending an e-mail to email@example.com
Previous issues of the BEEF Cattle letter
Issue # 911
November 19, 2014
When Temps Plummet, Energy Needs Increase! - Stan Smith, OSU Extension PA, Fairfield County
For me, the next week or so is "breeding season" at our place. Yes, we maintain cows with the intention of having them calve in the fall . . . in a perfect world, that means September 1.
Why you ask? There are several reasons . . . calves typically are born in pretty nice weather, they tend to be a little smaller with few calving difficulties, fall born calves that are ready for grass in April have tended to be a little more valuable over the years, the cull cows that we get to market shortly after the first of the year also seem to hit a better market, and . . . the weather during breeding is typically a lot nicer than early summer heat.
Needless to say, this will be the first time we've danced around a November polar vortex during breeding! That being said, while it's much earlier than normal to have this conversation, it merits mentioning that in order to maintain condition, the energy intake of a cow needs to increase about 1% daily for each degree of temperature below her "lower critical temperature" (LCT). For a cow that has barely grown her winter coat yet, that might mean today she's slipping into a declining nutritional plane at 32 degree F!
For more detail on a cow's LCT and the increased energy requirements that result, review these articles from the Ohio BEEF Cattle letter archives: Rory Lewandowski authored this piece in last December's issue #864 and Steve Boyles and Jeff McCutcheon offered similar concerns in issue #768. A few pounds of corn might be warranted, especially if you have cows in lactation and it's 'breeding season!'
2015 Ohio Beef Feedlot School to be held in Greenville
Farmers and producers interested in learning more about beef feedlot nutrition and maximizing profits can participate in a discussion of the issues by experts from Ohio State University Extension during a Beef Feedlot School January 8, 15, 22 and 29, 2015 from 7 to 9 p.m. at Anderson Marathon Ethanol 5728 Sebring Warner Road, Greenville, Ohio.
The school will focus on beef feedlot nutrition, maximizing profits by increasing feed efficiency and using byproducts to reduce feed costs.
The beef feedlot school will be taught by Francis Fluharty, a professor of ruminant nutrition at Ohio State. Fluharty specializes in feedlot nutrition and animal growth.
The sponsor is OSU Extension, which is the statewide outreach arm of Ohio State University's College of Food, Agricultural, and Environmental Sciences.
Registration is $50 by December 22. Participants can register by contacting the Darke County OSU Extension office at 937.548.5215.
The registration fee includes access to all four classes. To get the most of the school, producers need to come to all four nights to get information that builds each night.
The sessions will also be recorded and broadcast live at the Crawford County OSU Extension office. Producers in the Bucyrus area who want to attend the school but aren't able to travel to Greenville can contact the Crawford office.
Other sponsors include: Darke County Cattlemen's Association, Ohio Cattlemen's Association, Keller Grain & Feed, Inc., and Versailles Feed Mill, Inc.
For more information or a registration form, see the flyer linked here or contact Darke County OSU Extension Educator Sam Custer, firstname.lastname@example.org or 937.548.5215.
OCA Sale Videos are Posted
You can find the videos of the bred females consigned to the OCA Replacement Female Sale posted on the OCA YouTube channel linked here.
Pace of Expansion - Matthew A. Diersen, Professor, Department of Economics, South Dakota State University
A common question of late is, "How long will the high cattle prices continue?" The November WASDE report gives an overview of how the current and expected production of beef relates to prices. From a supply perspective beef production for 2014 is expected to be less than in 2013. The expectation for 2015 is for even less beef production than for 2014. Prices in 2015 are also expected to be higher than during 2014. The demand side is clouded by other meats. Broiler production for 2014 is expected to be higher than during 2013. Looking at 2015, production is expected to be higher for broilers again and for pork and turkey. Thus there will be slightly less beef, but more competing meats. The upside price potential for beef is limited. That does not say when the impact on other prices, such as for feeder cattle or calves, will occur.
The lower production levels and duration hinge on the pace of expansion. Several indicators are suggesting that cattle herd expansion is occurring. In the July 1 Cattle report there were 29.7 million beef cows and 4.1 million replacements in the U.S. Expansion could come from either less culling or from more replacements. Since July 1, the various Livestock Slaughter reports show sharply lower cow slaughter volumes, especially of beef cows. Overall heifer slaughter is lower too, giving at least the potential for expansion and a bigger 2015 calf crop. When a larger calve crop is combined with steady beef prices, the expectation would be for lower 2015 calf prices, especially in second half of the year.
The heifers have not moved to feedlots. While the total number of cattle on feed is down slightly from a year ago, the mix of heifers is down sharply. The rest of the feedlot situation explains the recent high prices and high demand for calves. Despite a slightly higher projected calf crop for the second half of 2014, the number of feeder cattle outside of feedlots is down sharply from last year. The feeder cattle futures market is inverted at present - the market is demanding feeder cattle today. From the supply side, the low available volume of cattle to feed will be supportive of prices for the first half of 2015. Ultimately it will take more calves to allow for some expansion and some increase in feedlot volumes.
Expansion would also imply at least some producers are holding back heifers. Consider recent sales data from the National Feeder and Stocker Cattle Summary report from the Agricultural Marketing Service. The mix of heifers the past few weeks has been at 37% of the trade, down from 39% in 2013. Heifers can also be sold as replacements, but this gives some indication that some are being held back. This particular trend has to continue too in order to give expansion, but it is a necessary first step. Calves (5-600 lbs.) in South Dakota last week averaged $290 per cwt. for steers. Heifers at the same weight sold at a 7% discount, at $270 per cwt. Heifers sold as replacements were $306 per cwt. or at a 6% premium to steers.
More Records Set in Cattle Market - Tim Petry, Livestock Economist, North Dakota State University Extension Service
Fed cattle prices surged to new record highs last week as tight supplies of cattle continue to support the market. USDA-Agricultural Marketing Service (AMS) reported the average 5-area weekly weighted average direct fed steer price at $169.90 which was up $1.11 from previous record of $168.79 for the week ending October 24. By the end of the week live cattle futures also reached life of contract and all-time record highs. On Friday the December live cattle contract settled at $170.20.
Calf prices are record high for this week of the year, but in some cases may be off a few dollars from a month ago before the large fall runs hit. There are individual lots selling for record high prices. Since USDA-AMS does not report an average calf price, determining a record high is more difficult and depends on individual markets.
There is also a wide range in prices for the same weight and grade of calves at the same market. In the USDA-AMS North Dakota weekly auction summary for last week, the reported range in 550-600 pound, medium and large #1 steer calves was $261-$294. That wide range results from the many factors that affect the value of calves. 550-600 pound heifers were quoted from $237-$294. Notice that top heifer calves in North Dakota sold for the same price as top steers due to the demand for replacement heifers.
Feeder cattle futures increased last week and by Friday were just slightly lower than the previous life of contract and record highs that occurred on October 8. For example, the January contract settled at $236.12 on Friday compared to $236.32 on October 8.
The CME Feeder Cattle Index (Index) is often used as a barometer for feeder steer prices in the U.S. Since CME Group feeder cattle futures are cash settled rather than requiring actual delivery of cattle, all open contracts after termination of trading on the last Thursday of the contract month are settled with the Index price.
The Index is based on a sample of USDA-AMS reported transactions for 650-849 pound, Medium and Large #1 and the combined #1 and #2 market classes of feeder steers. The sample consists of all feeder cattle auction, direct trade, video sale, and internet sale transactions within the 12-state region of Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming for which the number of head, weighted average price and weighted average weight are reported by AMS.
The actual Index is a 7-day weighted average price which is computed and released every weekday on the CME Group website: www.cmegroup.com. The Index is a good proxy for the current U.S. feeder cattle cash market, while feeder cattle futures prices are what traders are willing to buy and sell at for future contract months.
Although feeder cattle futures prices almost reached record highs last week the Index did not. The record high Index price occurred on October 14 at $244.04. The latest recorded Index for November 14 was $239.19.
During the life of a feeder cattle futures contract, prices may be above or below the current Index depending on trader's expectations for the future. But, the Index and the expiring futures contract price are always very close at maturity. For example, the last day of trading for the October 2014 feeder cattle contract was Thursday, October 30. The futures contract settlement price that day was $239.75 compared to the Index price of $239.95.
The November feeder cattle futures contract matures on November 20. Both the futures price and Index price are close to $240 as expected. Since the Index is an average, some geographic areas will have higher cash prices with others experiencing lower prices. Producers should be aware of their basis, which is the difference between the local cash price and the Index or futures price.
Visit the OSU Beef Team calendar of meetings and upcoming events
BEEF Cattle is a weekly publication of Ohio State University Extension in Fairfield County and the OSU Beef Team. Contributors include members of the Beef Team and other beef cattle specialists and economists from across the U.S.
Ohio State University Extension embraces human diversity and is committed to ensuring that all research and related educational programs are available to clientele on a nondiscriminatory basis without regard to race, color, religion, sex, age, national origin, sexual orientation, gender identity or expression, disability, or veteran status. This statement is in accordance with United States Civil Rights Laws and the USDA.
Keith L. Smith, Associate Vice President for Agricultural Administration; Associate Dean, College of Food, Agricultural, and Environmental Sciences; Director, Ohio State University Extension and Gist Chair in Extension Education and Leadership. TDD No. 800-589-8292 (Ohio only) or 614-292-6181.
Fairfield County Agriculture and Natural Resources