Jan. 18, 2021
High grain price impacts on the cattle industry
By Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
Grain and oilseed prices have risen dramatically in the last three to four months. For example, the weekly cash price of corn reported for Dodge City, Kansas averaged $3.41/bu. from January-September 2020. The price rose above $4.00/bu. by mid-October and by mid-January 2021 was reported at $5.44/bu. July corn futures are currently priced at $5.20/bu. Market prices for corn are increasing to ensure that demand is rationed to match available supplies and adequate corn is available until the next harvest. Corn demand comes from many different markets including livestock feed, industrial use (primarily ethanol) and exports. As corn prices rise each market will react to reduce corn use in varying degrees according to the economic claim each demand type makes on corn. With corn as the main driver, other feedgrains and by-product feeds will all generally rise proportionally through market arbitrage.
The cattle industry will react to high feed prices somewhat differently than other livestock species. Unlike hogs and poultry, where their monogastric biology means that using less feed implies reducing production, the ruminant biology of cattle means that the industry will use less grain by changing how cattle are produced more than by changing production levels. Indeed, the supply of feeder cattle is mostly determined for 2021 and those cattle will go through the feedlot as usual but with a different production system.
The central decision that determines how feeder cattle get finished and become part of the beef supply is feedlot placements. Individual feedlots often have particular preferences for size, breed and type, gender and overall quality of the feeder cattle they purchase but also flexibility to feed a variety of animals. In general, feedlots can place feeder cattle weighting from less than 600 pounds to more than 1,000 pounds. One of the biggest decisions for feedlots is whether to “buy pounds” (place heavier feeder cattle) or “feed the pounds onto the cattle” by placing lighter weight feeder cattle. This decision will change according to feed prices. As high feed prices push feedlot cost of gain up, feedlots have an incentive to “buy more pounds” and place heavier feeder cattle. Thus, the cattle industry responds to corn market signals to use less corn by placing cattle at heavier weights and using other (i.e. forage) feeds to add additional weight to cattle prior to feedlot placement. This is the advantage (and necessity!) of the cattle industry to use the ruminant capabilities of cattle to respond to the corn market situation. If all the cattle finished in feedlots in 2021 (that would have been fed anyway) are placed, say, an average of 100 pounds heavier, the amount of reduction in total concentrate feed use is significant.
When feedlots demand heavier cattle, prices for lighter weight feeder cattle will decline relative to heavier cattle. For example, the price 825 pound steers in Oklahoma is currently about $131/cwt. When corn is, say $3.65/bu., feedlots would be willing to pay roughly $155/cwt. for a 575 steer based on the cost of gain to put on the 250 pounds from 575 to 825 pounds. When corn price increases to say, $5.35/bu., the increased cost of gain means that the feedlot would only be willing to pay roughly $146/cwt. for a 575 pound steer – even though the price of the 825 pound steer has not changed. Of course, higher feed prices likely also means that the overall feeder cattle price level will decline as well. The change in feedlot demand for light versus heavy weight feeder cattle simultaneously provides incentives for stocker producers to add the needed additional weight to feeder cattle. In the example above, the value of stocker gain is roughly $0.75/lb. when corn is $3.65/bu. but increases to $0.97/lb. when corn price increases to $5.35/bu.
Higher corn prices provide incentives for feedlots to change how cattle are finished and those decisions, in turn, will signal the rest of the cattle industry to make production adjustments utilizing the ruminant flexibility of cattle in response to changing feed prices. Relative to a given fed cattle price level, higher feed prices implies lower feeder cattle prices with prices of lighter weight feeder cattle under more pressure than heavier feeder cattle.
The 3 stages of parturition (calving)
By Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Each year in January, it is time to review and prepare for the most important season in a spring-calving cow operation. As the calving season approaches, an increased understanding of the parturition process is helpful. The more we understand about the physiology of the process, the more likely we are to make sound decisions about providing assistance. Parturition, or calving, is generally considered to occur in three stages.
Stage 1: The first stage of parturition is dilation of the cervix. The normal cervix is tightly closed right up until the cervical plug is completely dissolved. In stage 1, cervical dilation begins some two to 24 hours before the completion of parturition (two to six hours would be most common). During this time the “progesterone block” is no longer present and the uterine muscles are becoming more sensitive to all factors that increase the rate and strength of contractions.
At the beginning, the contractile forces primarily influence the relaxation of the cervix but uterine muscular activity is still rather quiet. Stage 1 is likely to go completely unnoticed, but there may be some behavioral differences such as isolation or discomfort. At the end of stage one, there may be come behavioral changes such as elevation of the tail, switching of the tail and increased mucous discharge. Also relaxation (softening) of the pelvic ligaments near the pinbones may become visually evident, giving a “sunken” appearance on each side of the tailhead. Checking for complete cervical dilation is important before forced extraction (“pulling”) of the calf is attempted.
Stage 2: The second stage of parturition is defined as the delivery of the newborn. It begins with the entrance of the membranes and fetus into the pelvic canal and ends with the completed birth of the calf. So the second stage is the one in which we really are interested. This is where we find all of the action.
Clinically, and from a practical aspect, we would define the beginning of Stage 2 as the appearance of membranes or water bag at the vulva. The traditional texts, fact sheets, magazines, and other publications that we read state that Stage 2 in cattle lasts from two to five hours. Data from Oklahoma State University (Putnam, et al. 1985) and the USDA experiment station at Miles City, Montana, (Doornbos, et al, 1984) would indicate that Stage 2 is MUCH shorter. In these studies, assistance was given if Stage 2 progressed more than two hours after the appearance of water bag at the vulva. The interesting thing about the data was that the heifers calving unassisted, did so in about one hour after the initiation of Stage 2, and mature cows calved within an average of 22 minutes of the initiation of Stage 2.
Those that took longer needed assistance. These and other data would indicate that normal Stage 2 of parturition would be redefined as approximately 60 minutes for heifers and 30 minutes for adult cows. In heifers, not only is the pelvic opening smaller, but also the soft tissue has never been expanded. Older cows have had deliveries before and birth should go quite rapidly unless there is some abnormality such as a very large calf, backwards calf, leg back or twins. If the cow or heifer is making good progress with each strain, allow her to continue on her own. Know your limitations. Seek professional veterinary help soon if you encounter a problem that cannot be solved easily in minutes.
Stage 3: The third stage of parturition is the shedding of the placenta or fetal membranes. In cattle this normally occurs in less than eight to 12 hours The membranes are considered retained if after 12 hours they have not been shed. Years ago it was considered necessary to remove the membranes by manually “unbuttoning” the attachments. Research has shown that manual removal can be detrimental to uterine health and future conception rates. Administration of antibiotics usually will guard against infection and the placenta will slough out in four to seven days. Contact your veterinarian for the proper management of retained placenta.
An important ingredient for your calving season preparation is the Oklahoma State University Extension Circular E-1006: Calving Time Management for Beef Cows and Heifers. Cow-calf producers will want to download this free circular and read it before the first calf is born this spring.