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Feedyards have increasingly been feeding pens with heavier, not lighter, cattle.
July 8, 2014
There’s been an important shift occurring among the nation’s feedyards over time. Most notably, the composition of placements has undergone some significant changes since 2000.
Conventional wisdom would suggest that cattle feeders, challenged by tight supply, would be chasing lighter-weight calves to fill pens. That does happen in spurts. However, if maintained, that strategy in the aggregate would pull the feeder cattle supply ahead into the feeding sector and comprise a lighter-weight placement mix into feedyards. However, just the opposite has occurred. In fact, feedyards have increasingly been feeding pens with heavier, not lighter, cattle.
The heaviest category (800+ lbs.) has increased from about 23% of the placement mix in 2000, to nearly 32% in 2013. Meanwhile, the categories of 600-699 lbs. and 700-799 lbs. have collectively declined nearly the same portion (about 8%) during the same time frame.
Interestingly enough, calves weighing less than 600 lbs. have remained relatively steady – comprising about 25% of placements year-in, year-out (thus the category is not included on the graph).
The trend represents some important insight into the feeding business. There’s probably any number of causes including a tightening labor situation and rising feed costs over time. However, it’s also likely the trend represents a broader strategy to manage risk.
Heavier calves represent a shorter feeding period and thus reduce both performance and market uncertainties associated with extended feeding regimes.
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What other causes might be driving this trend? How do you foresee the influence on the feeding sector over time? What impact might this have on the market and stocker operations in the future? Leave your thoughts below.
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Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.
Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs. He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.
Contact him at [email protected].
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