Nov. 28, 2016
Beef cold storage myths and realities
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
Considerable ado has been made about large beef cold storage totals for the past year. This has resulted in questions, concerns and confusion among cattle producers and others about the implications of large cold storage holdings. I have gotten numerous questions about “huge supplies of beef in cold storage that would keep beef markets depressed.” Misunderstanding has been increased by misleading media stories about cold storage. One such recent article by a major news service was titled “U.S. Beef Supplies at Highest in Records Dating Back a Century.” The article was referring to the reported October beef cold storage total of 532 million pounds, the largest monthly total since records began in December 1915.
However, beef cold storage, which is frozen beef supplies maintained in commercial warehouses for more than 30 days, represents roughly two percent of annual beef production. In other words, 98 percent of beef is marketed as chilled fresh beef and does not pass through cold storage. Record cold storage inventories do not imply record beef supplies. Indeed, beef supplies, as measured by total annual beef production, exceeded the projected 2016 beef production total in 17 of the past 21 years.
October cold storage represented 2.15 percent of annual beef production (a rolling twelve month total of beef production), fractionally less than the 2.16 percent from one year ago and less than the record monthly level of 2.19 percent in January, 2016. Cold storage inventories typically increase seasonally in the winter and decrease into the middle of the year. Since beef in cold storage is typically held for six to twelve months, a twelve month average of monthly cold storage inventories provides a good measure of cold storage management over time. The twelve month average of cold storage inventories for October was 1.97 percent of annual beef production compared to 2.01 percent at the same time last year. Since 2012, the monthly cold storage pipeline has averaged 1.82 percent of annual beef production and has ranged from 1.61 percent (October and November 2014) to 2.07 percent (January 2016). Therefore, cold storage inventories, or more correctly, changes in cold storage inventories from month to month are too small to be a direct beef supply issue except possibly in a few specific markets.
While cold storage is only a minor component of total beef supplies, cold storage behavior is indicative of market conditions and challenges. Cold storage inventories include an unspecified mix of boneless beef trimmings and muscle cuts along with bone-in beef cuts. Bone-in beef cuts in cold storage have generally declined over time and represented 7.2 percent of October total cold storage inventories; the lowest proportion in over 20 years. The bulk of cold storage inventories are boneless product and are believed to consist mostly of trimmings and end meats. Rarely, and only under exceptional circumstances, significant quantities of middle meats may be put into cold storage. These frozen high quality steaks do not enter normal chilled meat markets when marketed and are typically sold at a discount. Trimmings and end meats are more commonly frozen though maintaining frozen stocks is expensive and is not done without a good economic reason.
Holding beef in cold storage is motivated primarily by two separate but related market activities: the ground beef market and international beef trade. Changing flows of beef imports and exports may contribute to variation in cold storage inventories. For example, the build-up of cold storage in late 2015 was undoubtedly related to the dramatic increase in beef imports last year, most of which was frozen processing beef and was pulled out of cold storage over several months. Beef destined for frozen exports may contribute to increased cold storage inventories when exports are growing. Increased fed slaughter in 2016 has produced more fed trimmings and lean beef supplies are larger due to additional cow slaughter. Sharply growing beef production and a relatively weak ground beef market in 2016 likely account for the build-up to record cold storage supplies in October. Despite being only a small part of the overall beef supply, large current cold storage inventories of beef certainly reflect the marketing challenges that accompany growing beef production in 2016.
Prepare now for the spring calving season
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Someone once said “that Success occurs when Opportunity meets with Preparation.” Planning and preparing ahead for next spring’s calving season can help increase the chances of success. There are several key preparation steps that would be good to conduct in December to insure success in February, March, and April.
Before calving season starts do a walk-through of pens, chutes, and calving stalls. Make sure that all are clean, dry, strong, safe, and functioning correctly. Check the gates and the squeeze panels to make certain that they are ready for use.
Many calving sheds are storage facilities during the off season. Do you have the extra barbed wire and steel posts, as well as grass seed and motor oil stored in the calving shed? Now would be a good time make certain that these items are placed in another facility or at least out of the way. This is a lot easier to do on a sunny afternoon than on a cold dark night when you need to have the calving area ready in a short time.
If calf diarrhea has been a significant issue in your herd in the past, now is a good time to visit with your large animal veterinarian. Ask about a scours vaccine given to the cows before calving, and about other management strategies that help reduce the pathogen exposure to baby calves when they are most vulnerable.
Larger cow calf operations may want to learn about the Sandhills Calving System. This is a calving time strategy that is meant to reduce the incidence of calf diarrhea by keeping cow/calf pairs pastured together by calving date. This system requires several pastures and weekly movement of cows that are yet to calve. The goal is to prevent newborn calves from being exposed to disease-causing organisms being shed by older calves. Several articles have been written about the Sandhills Calving System. Here is a link to one from the University of Nebraska: http://beef.unl.edu/beefreports/symp-2007-17-xx.shtml.
More information about management of cows and heifers at calving time can be found by downloading and reading the Oklahoma State University Circular E-1006 Calving Time Management for Beef Cows and Heifers.
Cow-Calf Corner: Beef cold storage myths and realities; Prepare now for the spring calving season
Nov. 28, 2016