Source: Oklahoma Cooperative Extension Agency | April 29, 2019
What does May bring?
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
Does May bring flowers or more showers? The question of whether April showers continue into May will become important in terms of crop production. The next few weeks will determine whether planting intentions for major crops will be realized. From a feed perspective, there appear to be ample supplies and production potential to maintain attractive concentrate feed prices for the foreseeable future.
From a forage perspective, excellent moisture conditions suggest tremendous pasture and hay potential. The latest Drought Monitor shows the least amount of dry conditions across the country since the Drought Monitor began in 2000. The upcoming May Crop Production report from USDA-NASS will likely show that May 1 hay stocks are low following reduced Dec. 1 hay stocks and cold, wet conditions affecting cattle production this past winter. However, good hay production prospects for 2019 alleviate much of the concern about end of crop year stock levels as the 2019 hay crop year begins.
Beyond the weather, seasonal supply and demand conditions will influence cattle and beef markets in May. Beef production grows seasonally from April to June on the heels of seasonal peaks in steer slaughter in June. Total beef production actually peaks in October with seasonal peaks in heifer and cow slaughter added to steer slaughter. Steer and heifer carcass weights are approaching the seasonal low in May before climbing to a peak this fall. At this time, steer and heifer carcass weights are close to year ago levels after being lower for the year to date, largely as a result of weather impacts. Fed cattle prices are currently at or just past the seasonal peak this spring and typically decline to late summer lows.
Boxed beef prices typically peak in May, driven by summer grilling demand. Rib and Loin primal prices are seasonally high at this time while Chuck and Round primal prices are seasonally soft in the summer before increasing in the fall. Beef exports in the coming months may impact these seasonal patterns, in particular to moderate the summer lows for Chuck product prices, which are seeing growing export demand.
Prices for lightweight calves and stockers are likely at or just past the seasonal peak. Good but slow developing forage conditions this spring have spurred strong grazing demand and maintained calf prices near the seasonal peak through April. Prices for big feeder cattle typically increase from early spring lows and push steadily higher to late summer price peaks.
Cull cow prices have been quite erratic this year, spiking up seasonally a couple of times but falling back each time reflecting variability in the ground beef market. The ground beef market has been quite dynamic for several months with changes in both supply and demand conditions.
With the exception of the cull cow market, cattle and beef markets are behaving seasonally with little underlying trend in most markets. All in all, we are seeing the most stable cattle and beef markets in many years. Until or unless outside shocks rise up to impact supply or demand conditions, expect cattle and beef markets to remain pretty calm in the coming months.
Calculating the pros and cons of creep feeding
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Feed conversions of calves fed creep feeds have been quite variable to say the least. Conversions of 5:1 or 5 pounds of grain consumed to 1 extra pound of calf weight are very rare and the optimum that can be expected when producers are using a “typical” high energy creep feed. Conversions may get as poor as 15:1 (or worse) in some situations. Therefore, it is obvious that several factors come in to play to determine the amount of creep feed that is consumed for each additional pound of gain.
Cows that give large amounts of milk to their calves will provide enough protein and energy to meet the growth potential of their calves. In that scenario, it is reasonable to assume that the feed conversion from creep feeding could be quite poor (10:1 or worse). If the milk production of the cows is limited for any reason, then the added energy and protein from the creep feed provides needed nutrients to allow calves to reach closer to their genetic maximum capability for growth.
Calves from poor milking cows may convert the creep feed at a rate of about 7 pounds of feed for each pound of additional calf weight. Poor milking can be a result of genetically low milk production or restricted nutritional status. Nutritional restriction due to drought situations often adversely affects milk production and therefore calf weaning weights.
Shortened hay supplies and reduced standing forage due to drought or severe winter weather often set the stage for the best results from creep feeding. These feed conversion ratios become important when making the decision to buy and put out creep feed for spring born calves. As you are calculating the cost of creep feeds, remember to include the depreciation cost of the feeders and the delivery of the feed. Then of course, it is important to compare that cost of creep feeding to the realistic “value of added gain.”
To calculate the value of added gain, determine the actual per head price of the calf after the added weight gain (due to the creep feed). Then subtract the price per head of the calf if it was sold at the lighter weight (not fed creep feed). Divide the difference in dollars by the amount of added weight. Although 500 pound steer calves may bring $1.80/lb at the market, and a 550 pound steer brings $1.71/lb, the value of added gain is about 80 cents per pound. Therefore the estimated creep feeding cost per pound of added gain must be less than 80 cents for the practice to be projected to be profitable
Different ranching operations will come to different conclusions about the value of creep feeding. In fact, different conclusions may apply to different groups of cows within the same herd. Creep feeding may be more beneficial to calves from thin, young cows and less efficient to calves reared by mature cows that are in better body condition and producing more milk.