June 26, 2017
Cattle markets slide into summer; more cattle on feed
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
With July 4 beef purchases complete, wholesale beef prices have dropped sharply the past ten days. Beef and cattle markets, have defied gravity by staying stronger, longer than most expected this spring. However, with seasonal pressure prevailing, beef and cattle markets have weakened and will likely struggle seasonally for the next six plus weeks. Beef markets often weaken during the summer doldrums, that period of summer heat between Independence Day and Labor Day. The summer slump may be mitigated somewhat if July 4 beef sales are strong prompting follow-up beef sales. Wholesale markets will likely struggle until August when Labor Day purchases will pick up to support beef features for Labor Day, the last big grilling holiday of the summer. Cash fed cattle prices have correspondingly dropped over $10/cwt. in the past ten days or so. Feeder cattle prices have dropped $10-$12/cwt. in the past week. Domestic and international beef demand will continue to be a key as beef supplies will undoubtedly continue to increase year over year in the second half of the year. Recently released retail meat prices show that Choice and All-Fresh retail beef prices increased from April to May. Choice retail beef prices in May were up 1.0 percent from last year while the All-Fresh retail beef price was down 3.9 percent year over year.
Beef production for the year to date in 2017 is up 3.8 percent, with cattle slaughter up 5.7 percent but being offset by sharply lower carcass weights so far this year. At the current time, steer and heifer carcass weights are down 17 pounds from the same time last year. Steer and heifer carcass weights bottomed seasonally in early May and are expected to increase seasonally into the fourth quarter. However, a normal seasonal increase from current levels would still have carcass weight down significantly year over year and will continue to moderate larger slaughter numbers.
The June USDA Cattle on Feed report showed another month of large year over year increases in May placements pushing June 1 on-feed inventories to 102.7 percent of one year ago. May placements were 112.2 percent of last year. May marketings were 108.8 percent of last year, a continuation of strong marketings that began in mid-2016. For the year to date, January-May, feedlot placements are up 9.2 percent while marketings have been up 7.0 percent year over year. Most of the increase in May placements were cattle under 700 pounds which means that those cattle will be marketed towards the end of 2017.
Strong beef demand has helped make the first half of 2017 a pleasant surprise to all cattle industry sectors. Strong demand in the third and fourth quarters may help significantly but supply pressures are likely to weigh a bit more heavily on cattle and beef markets in the second half of the year holding markets generally to a sideways pattern for the remainder of the year.
Mid to late summer supplementation for fall-born replacement heifers
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Fall born replacement heifers have been (or soon will be) weaned and will be at a very critical growing period. It is important that they grow at about 1.5 pounds per day from weaning until the start of the breeding season. Currently summer pastures are green, growing, and adequate in protein content. However, warm season pastures such as native grass or bermudagrass can be expected to be declining in forage quality in the hot, dry days of July, August, and September. Also these grasses will be reaching plant maturity which accelerates the decline in protein content.
Therefore, the young heifers must receive supplemental protein to continue to grow at the necessary pace of 1.5 pounds per head per day going into their first breeding season. An economical solution would be to give these heifers 1.5 to 2 pounds per head per day of the protein supplement called Oklahoma Gold. This is an OSU-developed protein supplement scheme that consists of a high protein (38 percent – 45 percent) pellet that contains the label-recommended dosage of one of the ionophores. Ionophores are feed additives (monensin or lasalocid) that improve feed utilization, inhibit coccidiosis, and enhance the onset of puberty in growing heifers. Research from Texas A&M in the 1970’s indicated that heifers receiving an ionophore reached puberty about 2 weeks earlier than counterparts that did not receive an ionophore. Inclusion of the ionophore in the growing program should cause a few more heifers to be cycling early in the breeding season.
The protein supplement will allow microbial digestion of the average quality late summer forage which in turn provides the energy needed to support the desired amount of gain. If forage quantity is very limited, the protein supplement alone will not produce adequate gains. In this scenario, a rancher first needs to decide if keeping more replacement heifers is really in his or her best interest.
Light-weight or young, weaned heifers that need an added boost while still on late summer pasture may benefit more from the Oklahoma Super Gold supplementation program. “Super Gold” consists of feeding 3 pounds per head per day of a 25 percent crude protein pellet. Once again, an ionophore is included at the proper dosage and will be beneficial to these young growing heifers. Plan ahead for late summer supplementation of fall-born replacement heifers.
Cow-Calf Corner is a weekly newsletter from the Oklahoma Cooperative Extension Agency.