Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Max's Tractor Shed - September 10, 2016: 1964 International 806


This Week in Agribusiness - September 10, 2016


Over a Cup - September 10, 2016 : Saving monarch butterflies, the weather, Minnesota rainfall, and pumpkins

Over a Cup


Increased production challenges beef demand

Increased production challenges beef demand

Depending on your perspective, beef demand remains fairly strong, relative to recent history, or it’s beginning to waver even as retail beef prices decline.

Beef demand declined three of the last four quarters, according to the All-Fresh Beef Demand Index (AFBDI) calculated by agricultural economist Glynn Tonsor, at Kansas State University. The decline was marginal in the last quarter of last year (-0.97%) and in the first quarter of this year (-0.49%).

In the second quarter, though, it declined 3.07%. Other than a similar decline in the first quarter of 2014, that’s the most significant quarterly decline, year to year, since the first quarter of 2010. Since then, the AFBDI declined in only four quarters, counting the last three.

The Choice Retail Beef Demand Index is similar, also declining year-to-year for the last three quarters: -3.71%, -0.67% and -3.32%, respectively.

“This year’s ample supply of beef is primarily driven by year-over-year increases in commercial cattle slaughter (4% more) and heavy dressed weights (7 pounds heavier),” explain analysts with USDA’s Economic Research Service (ERS), in the August Livestock, Dairy and Poultry Outlook.

“Forward projections show a continued gain in beef production into 2017 as the increased availability of slaughter-ready cattle and generally heavier carcasses result in more beef," ERS analysts say. "Annual beef production is forecast to reach 25 billion pounds in 2016, up 5.3% from last year. Total commercial beef production in 2017 is forecast 3.4% higher at nearly 26 pounds”

“As beef production increases, beef prices are coming down from record levels at the wholesale and retail levels,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Monthly average boxed beef prices peaked at $240.25 per cwt for Choice in May 2015 and at $249.34 in April 2015 for Select.

“In the first half of 2016, monthly Choice boxed beef prices averaged 12.6% below year-earlier levels with Select boxed beef prices averaging 14.5% below 2015 levels. Choice retail beef price peaked in May 2015 at $641.20 per cwt and the All Fresh beef retail price peaked at $614.70 in July 2015. In the first six months of 2016, Choice retail beef prices averaged 4.1% below year-ago levels, while All Fresh retail beef prices were down 4.3% year over year.”

catte nutrition gallery

70+ photos showcasing all types of cattle nutrition
Readers share their favorite photos of cattle grazing or steers bellied up to the feedbunk. See reader favorite nutrition photos here.

 

For those frustrated by the slow decline in retail beef prices, relative to wholesale prices, Peel says several factors are responsible. Among them, he explains, “Changes in beef production do not translate directly into retail beef supplies. The domestic retail beef supply is up only 2.8% when production is adjusted for beef imports and exports. This is due primarily to decreased beef imports in 2016. Retail beef price adjustments also reflect the impact of competing pork and broiler supplies.”

For perspective, Peel points out domestic beef production through the first half of this year was 5.3% more than last year. For the year, he says production is expected to be 4.0-4.5% more.

 

 You might also like:

10 tips for avoiding baler & hay fires this summer

Are you the best ranch manager you can be?

60+ stunning photos that showcase ranch work ethics

Profit per cow or per acre?

7 common cattle fencing mistakes (and how to fix them!)

Calf and feeder prices continue decline

weaned calf

Sharply lower fed cattle prices and daily whipsawing by the futures market continued to pressure calf and feeder prices this week.

Feeder steers and heifers traded mostly $2-$6 per cwt lower, according to the Agricultural Marketing Service (AMS). Calves sold mostly $6-$15 lower. The AMS regional weighted average feeder steer price for 6-weight cattle declined $10-$17 in the last two weeks.

Although Feeder Cattle futures closed in a tame range week to week—65¢ to $1.00 lower in the front three contracts, and then narrowly mixed—there were daily triple digit swings along the way.

Cash fed cattle traded sharply lower as wholesale beef prices continued to erode. Live prices were mostly $5 lower at mostly $105 per cwt. Dressed trade was $4 lower in Nebraska at $166; as much as $8-$9 lower in Iowa-Minnesota at the same money in the beef.

catte nutrition gallery

70+ photos showcasing all types of cattle nutrition
Readers share their favorite photos of cattle grazing or steers bellied up to the feedbunk. See reader favorite nutrition photos here.

 

For all of that, week-to-week, Live Cattle futures were an average of $2.01 higher through the front three contracts ($1.30-$2.80) and then mostly narrowly mixed.

“It is abnormal for live cattle prices to continue finding new summer lows this late in the summer,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. He explains the summer low usually occurs in late June to early August as more cattle come off feed, and as consumer demand wilts in the summer heat.

This year, though, Griffith says, “The finished cattle market continues to find a way to decline as cattle feeders continue moving animals in a timely manner. Declining prices may be sending the wrong signal, but it may result in decent prices late in the fall.”

Week to week, Choice boxed beef cutout value was $3.19 lower at $187.90 per cwt. Select was $4.80 lower at $182.27.

Combined with apparent currentness in feedlot marketing, the silver lining to lower wholesale and retail beef prices is the opportunity to grow consumer beef consumption, if not demand.

“Declining cattle prices and wholesale prices have allowed restaurants and grocers to reduce beef prices the past few months,” Griffith explains. “As of July, the All-Fresh retail price of beef was $5.75 per pound, which is the lowest retail beef price since July 2014…The struggle for beef continues to be its relative price compared to competing meats.”

From 2006 through 2012, Griffith explains the All-Fresh retail price of beef was 1.3 times higher than the pork retail price and 3.3 times higher than the broiler retail price. From 2013 through July 2016, the beef-to-pork retail price ratio has averaged nearly 1.5 while the beef-to-broiler ratio is just above 3.7.

"The ratios for July 2016 were 1.5 and 4.0 for beef-to-pork and beef-to-broiler, respectively," Griffith says. "These ratios are important because consumers do use relative prices at the meat counter. Research has demonstrated that pork and chicken are weak substitutes for beef, but consumers are looking for ways to stretch every dollar."

In the meantime, AMS analysts said Friday, “Over the last four weeks, the lower trend in the cattle complex has taken the air out of the sails of most everyone in the industry.”

Cyclically speaking, those sails will likely remain limp for a while.

“If price seasonality is intact, then there is more downside in the market this fall,” Griffith says. “However, this fall is not going to be the worst of it. The cyclical nature of beef cattle prices could force the calf and feeder cattle market even lower the next couple of years.”

“Total daily August steer and heifer slaughter was 15.9% larger than last year (through August 20),” says David P. Anderson, livestock economist for Texas A&M AgriLife Extension Service, in the most recent In the Cattle Markets.

“Digging deeper in the data is even more interesting. Steer slaughter is up 13.4%. Heifer slaughter was up a whopping 22%, compared to August last year. The increase in steer slaughter suggests a rapid pace of marketings, perhaps providing the opportunity to avoid the marketing backup experienced last year. The pace of heifer slaughter and the total numbers may suggest some information on the pace of herd expansion. Total cow slaughter is 19% larger than a year ago. While dairy cow slaughter is up about 7% in August, 37% more beef cows went to slaughter,” Anderson says.

“From the buyer’s perspective, this fall may be a good time to purchase some high- quality cows or heifers to breed. The initial investment should be much lower as heifer prices continue to wane,” Griffith says. “Additionally, this fall should play well into stocker producers’ plans as it will not cost nearly as much to secure inventory. The key message is to manage costs and keep financial records to determine if the enterprise is profitable or losing money.”

 

 You might also like:

Do small cows make more money?

13 utility tractors that will boost efficiency

How to get more value from your cull cows

14 thoughts to help get those heifers bred

Photo Tour: World's largest vertically integrated cattle operation

Meat Market Update | Drop in choice primal pressures cutout

Ed Czerwien, USDA Market News reporter in Amarillo, Texas, provides us with the latest outlook on boxed beef prices and the weekly cattle trade.

The daily Choice cutout dropped $8.39 during the week and ended at $191.09 on Friday, but the average Choice cutout only dropped $3.35 and ended at $196.32. The formula sales and out-front sales helped to cushion the impact of the big daily declines. Also one of the main reasons for the drop was that the daily Choice rib primal dropped from $329 the previous Friday down to $307 this week which really put downward pressure on the cutout.

Find more cattle price news here or bookmark our commodity price page for the minute-by-minute updates.

We can’t make sense out of a nonsensical world

We can’t make sense out of a nonsensical world

Trade agreements almost by definition create new winners and losers, but a marketplace free of distortions tends to create the most value and allocate resources more effectively over time. Agriculture tends to benefit greatly from trade agreements because we are interested in feeding a hungry world and are ultracompetitive with other nations.

But it isn’t just the beef industry and agriculture that benefits from fair trade. And yet, despite all the economic evidence, both presidential candidates are against trade agreements. The much-needed Trans-Pacific Partnership (TPP) agreement seems doomed, though everyone acknowledges it would be great for the country and critical to the U.S. economy as we continue to fall behind the rest of the world in gaining access to the most lucrative markets.

Somehow the politics are such that it makes sense to maintain a status quo that essentially gives the world unfettered access to our markets and keeps us from theirs. No wonder the rest of the world celebrates our reluctance.

And that is just one example of the frustration of trying to make sense out of a nonsensical world. Here are some others:

Pundits valiantly strive to explain the last collapse in the cattle market. Yet supplies are up marginally, exports are increasing and demand remains strong. The futures market and the basis between it and actual prices continues to diverge with unprecedented volatility, but the cattle markets continue to allow themselves to be driven by it.

EPA announces partnerships with the radical environmental groups and then is generally shocked when agriculture raises concerns. Our two parties nominate candidates in convoluted processes, one which assured that Hillary Clinton would not have any serious opposition, and the other that allowed Donald Trump to emerge from the most crowded field in history.

The result is two candidates with the highest negatives in a very long time, and people being asked to decide between a candidate that they know is unfit for the job, and one that they fear could even be worse.

A federal government that continues to live beyond its means, virtually ensuring hardship and disaster for future generations, and yet no semblance of responsibility among elected politicians. In fact, anyone who advocates financial responsibility is castigated as not only detached from reality, but in all likelihood, a hateful, cruel individual as well.

seedstock 100

BEEF Seedstock 100 List
Looking for a new seedstock provider? Use our UPDATED Seedstock 100 listing to find the largest bull sellers in the U.S. Browse the list here.

 

I could list the disconnects for pages, but in the end, the only conclusion is that facts, logic and common sense are becoming less and less relevant in a world that rejects these things as relics from a bygone era. It is no longer about understanding the underlying principles that drive outcomes, but rather merely creating a reality by creating perception. 

Whether it be climate change, upcoming elections or the marketplace, the only heretics are those who rely on actual facts and data as a basis for their decisions. It is difficult to make sense of what is an increasingly nonsensical world.

 You might also like:

Are you the best ranch manager you can be?

60+ stunning photos that showcase ranch work ethics

Profit per cow or per acre?

7 common cattle fencing mistakes (and how to fix them!)

Get to know the 2016 Seedstock 100 operations

Help promote proper consumption of free choice supplements

Free choice supplements are designed to increase animal performance, improve health and well-being, and balance diets. Several factors can influence the intake of a free choice supplement, which makes getting cattle to consume the proper amount both a science and an art.

Monitoring these factors and making adjustments will ensure that the animals are eating the correct amount, said Twig Marston, PhD, Technical Sales Field Manager in BioZyme's Supplement Division. Marston has more than 30 years of experience in the beef industry, having previously worked as a beef specialist at Kansas State University and as Director of Nebraska's Northeast Research and Extension Center.

"Our expectations are always that all animals will consume the desired amount on a daily or a regular basis. However, age of animal, herd dynamics, feeder placement, forage availability and quality, and supplement composition will all influence the amount and regularity of consumption," said Marston.

Animals have certain preferences for taste and/or mouth feel that will attract or deter them from eating supplements. Examples of attractants include molasses, distillers grain co-products, salt, phosphorus and grain. These ingredients are commonly used to attract cattle to a supplement, said Marston.

"Over 30 years ago, experiments were conducted to determine if cattle could balance their own diets by selecting specific ingredients placed in a single feeding station. That research indicated that cattle choose ingredients that simply taste or smell good to them, but cattle cannot selectively balance their diets for deficiencies on their own," he said.

An excellent example of cattle not wanting to consume a supplement to correct a nutritional imbalance is when cattle refuse to consume high-magnesium mineral supplements to prevent grass tetany, a potentially fatal livestock disease caused by a magnesium deficiency. Magnesium compounds are bitter in taste and therefore need to be masked with another ingredient to ensure proper consumption.

"The take-home message is you should avoid supplying several products simultaneously unless they are designed to be fed together by the manufacturer. If you do feed several products at the same time, expect the cattle to select the one that is the tastiest or most convenient and not necessarily the product that is best for them," said Marston.

Research also indicates that cattle will often over-consume a supplement. Adjustments can be made to alleviate this problem as well. Moving the feeder away from high traffic routes, like near water sources, will usually decrease consumption. Also, salt, certain ionophores and other ingredients have been shown to reduce intake of free choice supplements, said Marston. When these ingredients are added to the supplement, producers need to keep a watchful eye on the feeders to make sure the proper amount of supplement is being consumed.

Social behavior within a herd also affects intake. Dominant animals have been observed driving away timid animals from a feed supply. This can be remedied by providing more feeding stations to the herd. If you are using a tub product, it is extremely important to follow label recommendations for number of head per tub so that over-consumption doesn’t occur, he said.

"Supplement intake is also greatly dependent on forage quality and availability. When forages are readily available, succulent and growing rapidly, livestock will graze to satiety and depress supplement intakes," Marston said. "Later in the growing season when grasses mature or when forage supplies become less palatable, the consumption of free choice supplements returns to normal."

BioZyme provides feeding directions on all of its supplement products. Additionally, BioZyme’s Area Sales Managers and nutritionists will work with producers to ensure that their livestock are hitting consumption targets and optimizing their performance.

Material on BEEF Briefing Room comes directly from company news releases. Source: BioZyme

Limousin Foundation launches revamped website

The North American Limousin Foundation (NALF) is pleased to announce its newly revamped website. This fresh design offers quick and easy access to essential information and features that promote not only Limousin cattle, but also NALF’s brand as a whole. The new website has a clean uncluttered look, improving functionality.

NALF’s website is designed to assist members in finding the information needed, quickly and efficiently. To assist in this efficiency, the website is a responsive design. A responsive web design means the layout has multiple fluid grid layouts. www.NALF.org can be easily navigated from a desktop browser to a tablet to any mobile device.

To help members and commercial users market their Limousin influenced cattle, “For Sale Listings” have been added to NALF.org. Feeder cattle, commercial females and seedstock sale listings have designated pages for accessibility.

Breeders with feeder cattle and commercial females for sale may post their listings free of charge. Once the ad with the listing information has been submitted, a NALF staff member will approve the listing before it is visible to the public.

The seedstock for sale listing utilizes the MarketPlace on the NALF-DigitalBeef platform. These are private treaty sale offerings from Limousin, Lim-Flex, and fullblood seedstock breeders. Members have the ability to list bulls, females, embryos, and semen for sale. Anyone can access the MarketPlace, which is also sortable by state.

As part of its objective to provide members and the industry with up-to-date information, the new NALF.org provides all sale reports and show results in their respective pages. All reports and results may be used for additional publication purposes by accessing the sales and shows pages.

Members and sale managers can submit sale report information via the form found by hovering over the “Sales” tab or by sending the information to Jennifer Scharpe, director of public relations and media, at LimousinMedia@gmail.com. Show results can be submitted to Kindra Hall, assistant communications director, at LimousinDigital@gmail.com. The results will be posted on NALF.org as soon as possible.

“In today’s informational age, a company’s website is the key to their entire business,” said Frank Padilla, NALF director of marketing. “NALF.org services members and all stakeholders of the Limousin breed. The website provides animal genetic evaluation data, news, marketing and educational information to a world-wide audience.”

Digital advertising opportunities are available through banner ads. Two exclusive ads lie on the home page and the majority of the sub pages, and four premium ad spaces are present on the shows and sales pages. For more information about these digital advertising opportunities, contact Frank Padilla, frank@nalf.org or Kindra Hall, LimousinDigital@gmail.com.

For more information about Limousin and Lim-Flex® cattle and the North American Limousin Foundation programs and services, visit www.nalf.org or contact the NALF office at 303-220-1693.

Material on BEEF Briefing Room comes directly from company news releases. Source: NALF

 

Monitoring parasite pressure in pastures just a click away

Parasite infections can lead to a number of herd health problems, including negative effects on the immune system, decreased appetites, decreased weaning weights and lower conception rates.4 Because parasites cannot be seen in plain sight, cattle producers need a parasite pressure tool that will allow them to see when and why their cattle are at risk.

That tool is now online. Merial introduces a new parasite pressure tool that will allow cattle producers to monitor parasite pressure in their pastures and become aware of the conditions that could threaten their cattle. The tool was developed for and added to the LONGRANGE® (eprinomectin) extended-release injectable website.

Based on a producer’s Zip code and forage type, the tool calculates a custom Grass Growth Index (GGI) and a Nematode Suitability Index (NSI), which show the likelihood of parasite presence within the grass type at specific times of the year.

When a producer enters their location and operation’s forage type, the tool generates the GGI and NSI on a scale of 0-100; 100 represents extremely favorable conditions for grass growth and parasite infection.

“This tool allows producers to be one step ahead of parasites by knowing when and where they are prevalent,” says Steve Vandeberg, Director of Endectocide Marketing, Merial. “We hope producers take advantage of the benefits this innovative resource can offer.”

With the information the tool provides, producers can work with their veterinarian to choose the parasite control product that is best suited to battle parasites present in their pasture.

LONGRANGE, from Merial, is an extended-release dewormer that delivers up to 150 days of continuous parasite control in a single dose.5 One subcutaneous injection offers producers season-long treatment that can help save time and money.

Labeled for treating numerous species of internal and external parasites, LONGRANGE is the go-to solution for producers with cattle on grass.

Producers can learn more about the parasite pressure tool and LONGRANGE by visiting www.theLONGRANGElook.com or contacting their local Merial Sales Representative.

 

Material on BEEF Briefing Room comes directly from company news releases. Source: Merial