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LIVESTOCK MARKETS: Many factors affecting beef market

By Krissa Welshans

Oklahoma State University Extension livestock marketing specialist Derrell Peel said a wide variety of internal and external factors are impacting beef and cattle price levels and volatility.

“Beef production is at a seasonal peak in June with weekly beef production since late May estimated to be nearly 7% above year ago levels,” he said. “Fed cattle prices have dropped and could be near an early seasonal low with feedlots ahead of schedule for summer marketings.”

Year-over-year cattle slaughter is up while cattle carcass weights are lower compared to last year, moderating beef production increases somewhat, Peel added.

“With Independence Day meat already booked, wholesale beef values have dropped sharply the past ten days to support sales of seasonally large beef supplies.  If the three-day July 4 weekend results in strong retail beef movement, beef markets may maintain good momentum through the summer doldrums between July 4 and Labor Day meat sales in August.”

The latest retail beef prices indicated that beef prices are declining quite slowly. The all fresh beef price for May was slightly higher than April.

“Overall indications are that beef demand is holding strong in the face of growing beef supplies.  Beef movement this spring has been good; indicated in part by the drawdown of large beef cold storage supplies to levels six percent below year earlier levels in the latest report,” Peel noted.

The U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS) released last week the June “Cattle on Feed” report. Cattle and calves on feed in feedlots with capacity of 1,000 or more head totaled 10.8 million head on June 1, 2016, a 2% increase from June 2015.

Placements in feedlots during May totaled 1.88 million head, 10% above 2015. Net placements were 1.81 million head. During May, placements of cattle and calves weighing less than 600 pounds were 305,000 head, 600-699 pounds were 250,000 head, 700-799 pounds were 479,000 head, and 800 pounds and greater were 850,000 head.

Marketings of fed cattle during May totaled 1.79 million head, a 5% increase above 2015.

Other disappearance totaled 74,000 head during May, 4% below 2015.

Peel said the numbers were very close to expectations and wouldn’t likely provoke much market reaction.

“The report did confirm strong marketings that suggest that feedlots continue to be very current, as evidenced by declining carcass weights,” he noted. “The report also confirmed continued year-over-year increases in feedlot placements meaning that feedlot production will be cyclically higher late in the year.”

The increased placements were all in the heavy weight categories and will be marketed out of feedlots in the fourth quarter of the year, Peel added.

“Despite larger feedlot inventories and big feedlot placements, feedlots are in significantly better shape now compared to this time last year, and well positioned to handle the challenges of increased feedlot production in the coming months as long as marketings continue at a good pace.”

Managing Heat Stress

As temperatures rise, producers may need to pay closer attention to their synchronization programs.

Working cattle in hot weather can be detrimental to heat synchronization and artificial insemination (AI) programs, says Julie Walker, beef specialist for South Dakota State University (SDSU). When cattle need to be moved or worked, it pays to watch weather forecasts and try to choose a day that won’t be during a heat wave. Sometimes, however, producers need to get cattle in for a heat-synchronization program, and timing is crucial, regardless of the weather. 

Walker says more producers are shifting to April-May calving to match forage with nutritional needs of the lactating cow and to reduce labor at calving to avoid having to worry about cold weather in February-March. Now, she says, they have to deal with the heat instead. 

“They are breeding cows in July and August — which are often the hottest months, Walker explains. “This means that if they are putting CIDRs® in and synchronizing, and have to pull the CIDRs at a given time, they are under the clock and may have to get those cows in when it’s very hot. If they are going to do a fixed-timed AI in the morning, they are probably going to be pulling CIDRs at 7 p.m. the evening before.”

This can translate to more time and labor, particularly if cattle are away from AI facilities, she says. “If the cattle are not very close to the corrals, and we have to pull CIDRs at 7, this might mean we have to go get the cattle at 4 or 5 p.m., and that’s still during the hottest part of the day. We won’t be able to give them any time to rest and cool down and rehydrate because we have to sort off the calves before we put the cow through the chute. This often equates to 3 hours of working those cattle in the heat of the day,” she says.

Think about the heat and plan ahead, Walker urges. Consider moving cattle closer to the corrals in the morning while it’s still cool. That way, cattle are refreshed and watered before being worked, and maybe moving them will take less time. When moving and working cattle that time of year, make sure there is ample clean fresh water for them, so they won’t have any hesitation about drinking and getting rehydrated, she says.

If you’re using a fountain-type tank, make sure there’s enough water pressure to keep it full, Walker says, and make sure calves can reach the water. 

“We always need to think about heat stress and take care to minimize it while moving or working cattle, because heat stress can impact reproduction,” she says. “A lot of the risk is during early pregnancy for cows, and heat also has a negative impact on bull fertility.” 

Producers should also take into consideration that if you are doing heat detection during hot weather, cows won’t be very active during the heat of the day; they will be lying around in the shade to stay cool. You’ll have your best luck checking cows early in the morning or late in the evening, Walker notes, and they may be most active at night.

“When breeding cows that late in the summer when it’s hot, it really helps with the heat detection to use patches on them, to know which ones have been ridden,” she says. “We may not be out there during the coolest part of the day or night to see the riding activity, so we can use that tool to help us identify the cows that need to be inseminated.”

Editor’s Note: Heather Smith Thomas is a cattlewoman and freelance writer from Salmon, Idaho.

Why the Choice-Select spread matters to you

Jun 22, 2016by  in BEEF Editors’ Blog

Many a cow-calf producer has declared that the packer reaps the rewards from the high-quality genetics produced on the ranch. The math tells a different story.

“It’s been declared in many a cow camp and auction barn café, ‘I sell calves, and the packer is the one getting all of the premiums for my high-quality genetics,’” observes Paul Dykstra, beef cattle specialist with Certified Angus Beef (CAB). To determine whether or not that’s true, Dykstra did a little mathematical noodling to figure out what the recent $23 per cwt Choice-Select spread would do to improve the feedyard’s grid premium-discount structure for Choice carcasses.

The national average is about 70% of the fed cattle will grade Choice. Since packers are willing to pay for above-average cattle, Dykstra took the remaining 30% from 100% and multiplied by the Choice-Select spread to arrive at the premium for each Choice carcass. The resulting carcass premium was $6.90 per cwt using the $23 per cwt spread (Figure 1).

“Take that back to the rancher’s pocketbook with the other math in the table and you can see it puts an added $9.10 per cwt. premium there, on top of the price for a 650 pound steer, provided that two or more buyers are competing to own these Choice-grading type cattle,” Dykstra says.

A more typical $8 per cwt Choice-Select spread contributes about 3.30 per cwt to the bottom line on that 650 pound steer, he says. So the near-record spread we’ve seen of late makes the numbers look much better than the average Choice-Select spread. But a premium is a premium and often is worth pursuing.

But the Choice-Select spread isn’t the only quality-based premium out there. “That’s why we’ve got to consider the additive value of Choice premiums with perhaps 10% or more Prime carcasses at $18 per cwt. over Choice and let’s say 50% CAB carcasses at $5 per cwt over Choice,” Dykstra says. “We’re quickly back to adding almost $8.90 per cwt to the value of our 650 pound steer, even with the ‘normal’ $8 per cwt Choice-Select spread. But maybe ‘normal’ is out the window.”

Micromanaged Program | Measured Grazing Pays Off

Micromanaged Program

Measured Grazing Pays Off

James and Barbara Strickland move their cow herd daily using a system of paddocks created with electric tape. (DTN/Progressive Farmer photo by Becky Mills)James and Barbara Strickland move their cow herd daily using a system of paddocks created with electric tape. (DTN/Progressive Farmer photo by Becky Mills)

James Strickland might have wanted to take some time off after he retired from his day job in 2010, but his neighbor had other ideas.

“A day or two after I retired, he showed up at my house and told me it was time to get my pastures ready,” said the Chipley, Fla., producer. Strickland didn’t put up too much of a fuss.

“My neighbor had about 40 cows on 28 acres. His cows were always in good shape, and it was unbelievable how little hay he fed,” he said. Impressed by those results, Strickland decided it was time to rethink how he was using his pastures.

The first thing neighbor Christian Tibler did was measure Strickland’s pastures. He already had his 16 acres of pasture divided into four sections of 4 acres each, which he used to rotate his small herd. He also has a couple more acres in rough ground and swampy land.

Tibler walked off half of each of those 4 acres, measuring four more minisections, or paddocks, in each half. Then he sent Strickland to buy wire and fenceposts.

Today, Strickland has a herd of 20 cows on the same ground where he used to keep five. He lets them graze for a day in each strip, then he takes down the electric tape and moves them to the next paddock. They can back-graze the paddocks they’ve just moved out of to access water, minerals and liquid supplements, but just for three days. After that, he moves them to the other side of the 4-acre pasture. By the time he goes through each strip in each 4-acre pasture, it is almost a month before he comes back to the original pasture and starts the process again.

During periods of lush growth, he’ll double his grazing areas. He can divide each ministrip in half and get 60 days of grazing out of each rotation.

Bahiagrass is Strickland’s permanent forage. The variety he prefers is Tifton 9, one of the more productive and durable varieties. Extra production is turned into a bonus hay crop, which he has custom-cut and baled. This past summer, he reports getting 24 rolls off of 6 acres.

“In the spring, I’ll probably drill some millet in and some Argentine bahiagrass, too. The Tifton 9 stays green way into the fall. I need it to go dormant so my rye can come up,” he said.

Jennifer Johnson, University of Georgia (UGA) beef nutrition researcher, cautions bahia can complicate overseeding. She points out that bahiagrass sod is compact and dense, making it very competitive. When overseeding winter annuals into sod, she reports it’s typical to see greater success planting into bermudagrass sod rather than bahiagrass.

“This year, in the most Southern regions of Georgia, Alabama and northern Florida, we have seen a prolonged season of growth for our warm-season perennials,” Johnson reported in December 2015. “Due to unseasonably warm weather and a lack of a killing frost, neither bermudagrass nor bahiagrass have reached dormancy. Thus, they are continually growing and competing with winter annuals that were overseeded in the fall in anticipation of a typical frost date that has yet to occur.”


As for warm-season annuals, this will be the second spring for millet in Strickland’s grazing system.

“We had a pasture where we fed hay for four or five years,” he said. “It was in bad shape. It is amazing how fast the millet grew.”

He first bottom-plowed the pasture, which he uses as a sacrifice paddock when he doesn’t have growing forage. He disked it lightly and then waited a month until rain softened the soil. He planted the millet lightly with a no-till drill the first of April. Four weeks later, cattle were grazing the pasture.

Strickland’s county Extension agent, Mark Mauldin, said, “Pearl millet is a highly productive, high-quality forage. It helps James increase his stocking rate and does it fairly economically.”

Strickland planted Tifleaf 3 millet at the rate of 25 pounds per acre, fertilizing it in mid-June with 200 pounds of blended fertilizer an acre. Seed and fertilizer costs combined were about $90 an acre.


Winter is when Strickland’s micrograzing system really shines.

“Our best pastures are in the winter, starting in February and going until mid-May,” he said. He normally no-tills ryegrass and clover into the bahia sod, but this fall, he went with Wrens Abruzzi grain rye seed and Big Boss ryegrass, hoping for even earlier grazing.

He drilled 65 pounds per acre of rye seed Oct. 1. Because of the dry and warm conditions, he was reluctant to plant ryegrass at the same time. He waited until Oct. 30, then broadcast 25 pounds of ryegrass and 200 pounds of blended fertilizer per acre. Seed and fertilizer costs combined were $95 an acre.

The freakishly warm fall meant the Tifton 9 bahiagrass never really went dormant and competed with the rye. It was the first week in December before Strickland could turn his cows out on it. He plans to go back to clover in this year’s mix.

“I love clover. The cows do well on it. When the calves nurse, you can see the milk dripping down,” he said. He left the clover out in 2015 because he was afraid to put too much in his seed mix.

“This past spring [2015], the ryegrass and clover choked out the bahiagrass. If I could have found somebody to bale it for me, I’d have cut hay,” he said.

In the fall-grazing gap, when bahia normally goes dormant and before winter annuals reach grazing height, Strickland puts cows in a 2-acre sacrifice paddock for six to eight weeks. They get good-quality hay and a free-choice high-energy liquid supplement, Mix 30, which is a blend of corn and/or soy coproducts, containing 16% protein and 10% fat. Normally, the herd will consume a roll of hay a day during this period.

Besides a brief hay-feeding period, Mauldin said Strickland’s grazing system has another big bonus: His annual soil tests call for very little additional fertilizer beyond what he applies when no-tilling in his winter-grazing forages.

“His system forces the cows to spread the manure across the field evenly,” said the county agent. Strickland does drag his paddocks when cows are through grazing them, a practice Mauldin points out breaks up the manure piles but doesn’t do much to spread them. Most of the benefit is from the grazing program itself.


Mauldin is a fan of Strickland’s grazing system for more than the nutrient distribution. He said the producer almost has three systems in one the way he works his program.

“He has mob- and strip-grazing systems within a rotational-grazing system. He gets really high forage utilization. He has been able to increase his carrying capacity to way less than an acre per animal because he uses the forage so efficiently,” he explained.

UGA’s Johnson agreed. “With rotational grazing, you can better manage your forages so as to not over- or undergraze them. You can, as we like to say, get the goodie out of them.”

Johnson’s coworker, UGA extension forage specialist Dennis Hancock, added: “Rest periods allow plants to produce new leaves, which collect energy, transform it into sugars and store these sugars. More leaves can be produced following the next grazing cycle. Not only is regrowth potential improved, but root depth and stand life are improved, as well.”

The two biggest drawbacks of an intensive rotational system, Johnson explained, are the up-front cost of supplies, including a watering system, and the ongoing cost of time and labor.

For Strickland, the start-up cost was around $800, which was minimized since he already had his 16-acre pasture crossfenced with gates and a lane with a water trough and mineral feeder in place.

As for labor, he said, “Once you get it set up, it takes no time at all. You do have to be there every day to move the cows. It takes me maybe 15 minutes every morning. But you need to look at your cows and calves, and eyeball them anyway.”

Strickland’s wife, Barbara, grew up on a family dairy and swore she wouldn’t touch his cattle. However, she’s been won over and helps James move the cows when needed.

Looking back, Strickland said he’s more than glad his neighbor didn’t let him coast in retirement.

“This helps me be a better steward of the land. You get the most benefit you can from your pastures. There is a savings. I’m probably spending the same on 20 cows on 16 acres as anybody who has seven to eight cows.”

Strickland said a friend who worked for the Internal Revenue Service told him years ago that he was a hobby farmer. “I wish he was still alive so I could show him different,” he said. “I sold $20,000 worth of calves last year.” He figures his annual cost per cow, including minerals, liquid feed supplement, purchased hay, seed and fertilizer, ran around $325 a cow.

4 steps for properly tube feeding colostrum in first 24 hours

4 steps for properly tube feeding colostrum in first 24 hours

Tube feeding a newborn calf can be tricky. Here are four tips to avoid trouble when administering colostrum through a tube and ensuring the long-term health and survival of the calf.

It seems like every calving season, there is always a calf or two that fails to get up and nurse. Perhaps the labor was stressful. Maybe the calf is slow to figure things out. Possibly the first-calf heifer is confused and kicks at the calf. Whatever the reason, it’s hard to avoid having to milk out and tube feed a few calves every year.

It’s critical to get colostrum in the calf within 24 hoursafter birth. This ensures the passive transfer of immunity before the closure of the intestine, which allows the calf to absorb good quality immunoglobulin, explains Michelle Arnold, DVM, University of Kentucky ruminant veterinarian, in a recent article for the Ohio State University Extension Beef Newsletter.

BEEF Roundtable: Considerations for a successful calving season

Arnold says there are four key factors that contribute to the goal of successful passive transfer of immunity and ultimately determine the health and survival of the newborn calf.

1. Quality

Arnold recommends, “Feed a high quality colostrum with a high immunoglobulin concentration (>50 g/L) or use of a good quality powdered colostrum replacer (not a supplement).”

2. Quantity

She also suggests, “Feed an adequate volume of colostrum (2 quarts to beef calves at birth followed by 2 more quarts in 4-6 hours).”

3. Quickly

She advises producers to, “Feed colostrum promptly after birth (within 1-2 hours and again by 6 hours maximum).”

4. Quietly

Finally, she warns, “Passing the tube too quickly may result in damage to the laryngeal area and passage into the trachea and lungs. Handling the calf correctly minimizes this risk.”

To achieve the appropriate quality and quantity as quickly and quietly as possible, she also gives advice on how to properly handle the calf, insert the tube, check placement of the tube, administer the colostrum, remove the tube, and clean the equipment, which you can read here.

Arnold concludes, “Learning to use an esophageal feeder may mean the difference in life or death to a newborn calf. Esophageal feeders can also be used to administer vital electrolytes to scouring calves if reluctant to nurse a bottle.”