Sept. 28, 2020
Feedlot dynamics continue
By Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist
The September Cattle on Feed report was largely a replay of the August report with larger than expected placements pushing feedlot inventories higher. Feedlot placements in August were 109.1 percent of last year’s level, above the average pre-report estimate and at the upper end of analyst expectations. Marketings in August were 96.9 percent of year ago levels. However, with one less August business day this year compared to 2019, the average daily marketings were slightly higher than one year ago. The September 1 on-feed total was 11.394 million head, up 3.8 percent year over year. Large July and August placements have muted the seasonal low in feedlot inventories and pushed the September 1 total to record levels for the current data series back to 1996.
Reaction to this latest report is likely to be bearish. However, perspective is important to understand the current feedlot situation. Obviously, 2020 has been a strange year with unusual dynamics. Despite large placements the past two months, total feedlots placements are down 4.2 percent for the year to date (down 4.3 percent in the last six months). Two months of large placements does not mean that we suddenly have more cattle. Over the course of the year, the total number of feeder cattle in the pipeline has not changed from what was indicated early in the year. Cattle inventories peaked in 2019 and January 1 estimated feeder supplies were down 0.4 percent year over year. As we work through 2020 and into 2021, feeder cattle supplies should continue to tighten modestly. The indications are that September placements will not follow the pattern of July and August.
Because of the normal seasonality of feedlot inventories, placements, and marketings, a twelve-month moving average (12MA) of each data series allows valid month-to-month comparisons and provides a longer-term view of feedlot production. The 12MA of feedlot inventories peaked in March and, despite increasing the past two months, is currently 0.6 percent below the peak. The 12MA of marketings peaked cyclically in March 2020 as well. The 12MA of placements peaked recently in December 2019 and is currently 2.7 percent below the peak. The cyclical peak in 12MA placements was in Feb 2018. All of these highlight the fact that the industry has moved past the cyclical peak in cattle numbers and will see modestly tighter supplies going forward.
This does not mean that the current dynamics are without consequence. While the long-term totals have not increased, the unusual fluctuations in placements imply more short-term dynamics in the next few months. The July-August bulge in placements suggests higher feedlot marketings in the first quarter of 2021. July placements were skewed to the lighter weight cattle, while August placements included more heavyweight placements, which further implies that cattle could be somewhat bunched up. However, winter weather typically spreads cattle out a bit, so the exact timing is uncertain. The ripples from the first half of 2020 will extend into early 2021.
Poor temperament adversely affects profit
By Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist
October is a traditional weaning and culling time for spring-calving herds. Weaning for value-added calf sales is already underway. This is a time when producers decide which cows no longer are helpful to the operation and which heifer calves will be kept for future replacements. Selecting against ill-tempered cattle has always made good sense. Wild cattle are hard on equipment, people, other cattle, and now we know that they are hard on the bottom line.
University of Florida animal scientists recorded disposition scores over two years on 160 Braford and 235 Brahman x British crossbred cows. They wanted to evaluate the effects of cow temperament and energy status on the probability to become pregnant during a 90-day natural breeding season. Cows were scored as 1= calm, no movement to 5= violent and continuous struggling while in the working chute. Also a pen score assessment was assigned as 1= unalarmed and unexcited to 5 = very excited and aggressive toward technician. An exit velocity speed score was measured as the cows exited the working chute as 1= slowest and 5 = fastest. An overall temperament index score was calculated by averaging the chute score, pen score and exit velocity score. Blood samples were analyzed for cortisol concentrations. Cortisol is a hormone released when mammals are stressed or excited. Increased cow temperament score and elevated plasma cortisol concentrations both were associated with decreased probability of pregnancy. These results suggest that excitable temperament and the subsequent elevated cortisol concentrations are detrimental to reproductive function of cows. These authors concluded that management strategies that improve cow disposition, enhance their immune status, and maintain the cow herd at adequate levels of nutrition are required for optimal reproductive performance. Source: Cooke and co-workers. 2009 Florida Beef Research Report.
Mississippi State University researchers (Vann and co-workers. 2006. Southern Section of American Society of Animal Science) used a total of 210 feeder cattle consigned by 19 producers in a “Farm to Feedlot” program to evaluate the effect of temperament on performance, carcass characteristics, and net profit. Temperament was scored on a 1 to 5 scale (1=nonaggressive, docile; 5=very aggressive, excitable). The temperament scoring system was similar to that described in the Florida cow study. Exit velocity and pen scores were highly correlated. As pen scores increased, so did exit velocity. As pen score and exit velocity increased, health treatments costs and number of days treated increased, while average daily gain and final body weight decreased. This outcome makes perfect sense. Other studies have shown that excitable temperament can diminish immune responsiveness, with more temperamental calves having a reduced response to vaccination when compared with calm calves.
In the Mississippi study, as pen temperament score increased, net profit per head tended to decline. Pen temperament scores and net profits per head were as follows: 1=$121.89; 2=$100.98; 3=$107.18; 4=$83.75; 5=$80.81. Although feed and cattle price relationships have changed since this data was collected, one would expect similar impacts from the temperaments of cattle under today’s economic situation.
“Heritability” is the portion of the differences in a trait that can be attributed to genetics. The heritability of temperament in beef cattle has been estimated to range from 0.36 to 0.45. This moderate level of heritability indicates that real progress can be made by selecting against wild cattle. Whether we are marketing our calf crop at weaning or retaining ownership throughout the feedlot phase, wild, excitable cattle are expensive to own and raise.