Cow-Calf Corner is a weekly email newsletter by the Oklahoma Cooperative Extension Agency.
Oct. 5, 2020
Lack of moisture threatens winter grazing
By Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
Most of western Oklahoma has received little or no moisture in the past two to three weeks advancing drought conditions once again. From the worst levels in early July, drought conditions in Oklahoma had generally improved until mid-September. In the past two weeks, the Drought Monitor map for Oklahoma shows conditions once again deteriorating.
The Drought Monitor includes a Drought Severity & Coverage Index (DSCI), which provides an indication of how severe and widespread drought conditions are based on the Drought Monitor categories. The DSCI for Oklahoma was highest (indicating worse drought conditions) at 143 in early July. The DSCI improved to 55 by mid-September and has increased again to 64 in the latest Drought Monitor.
Nationally, the DSCI has worsened since May and currently stands at 148, with the majority of drought conditions in the western half of the country.
La Niña conditions have developed this fall in the Pacific Ocean and are expected to persist through the winter. The presence of La Niña in the winter typically results in drier than average conditions across the southern U.S. As a result, the drought outlook for the remainder of the year, provided by the Climate Prediction Center, indicates persistent drought in current drought areas with drought conditions expanding eastward into the central and southern plains, including much of Oklahoma. Current Oklahoma weather forecasts are consistent with these broader indications with scant precipitation prospects likely for the next two weeks.
Wheat pasture development and growth is likely to slow or even reverse if forecast weather conditions are realized. This, in turn, may reduce stocker cattle demand in the coming weeks. On average, Oklahoma calf prices are at or near the seasonal low in the late September/early October period. With larger fall runs of calves expected in October and November, the lack of wheat pasture demand may add additional seasonal pressure to calf markets this fall. Lack of wheat pasture or other forages may change the timing of calf and feeder cattle sales this fall.
A feeder cattle price pattern has developed this fall in Oklahoma that is very typical at this time of year. The price slides across steer weights are very different for feeder cattle below 600 pounds compared to cattle over 600 pounds. A larger price slide for the lightweight cattle means that the value of gain is lower.
For example, steer prices last week (Oklahoma combined auctions) showed that the value of increasing steer weight from 500 to 550 pounds increased animal value by $30/head or $0.60/lb. value of gain. From 550 to 600 pounds, steer value increased by $29/head or $0.58/lb. of gain. In contrast, steers from 600-650 pounds increased in value by $69/head or a value of gain of $1.37/lb. The same is true for heavier weight feeder animals. The same pattern is true for heifers with the price break occurring at about 550 pounds.
The current feeder price patterns mean that producers should consider the implications of current animal weight, short-term weight gain and timing as they evaluate fall marketing alternatives. In the current market for example, the value of 50 to 100 pounds of gain will be significantly lower for steers less than 600 pounds compared to steers over 600 pounds.
The impact of dressing percent on cull cow marketing
By Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
October is often the month of calf weaning and cow culling (for spring calving herds). Cull cows represent about 20% of the gross income in commercial cow calf operations. Understanding the major factors impacting cull cow prices is important to the bottom line.
Remember, cull cows that are destined to go to the packing house are graded by their fleshiness. In the USDA Market News reports cull cows are reported in four grades. The fattest cows are called breakers while moderately fleshed cows are boners or boning utility. Thin cows are called leans or lights, depending upon the weight of the cow. There will be price differences among these four grades.
However, within each grade, large variation in prices per hundredweight will exist because of differences in dressing percentage. Cow buyers are particularly aware of the proportion of the purchased live weight that eventually becomes saleable product hanging on the rail. Dressing percentage is (mathematically) the carcass weight divided by the live weight, multiplied by 100.
Key factors that affect dressing percentage include gut fill, udder size, mud and manure on the hide, excess leather on the body, and anything else that contributes to the live weight but will not add to the carcass weight.
Most USDA Market News reports for cull cows will give price ranges for High, Average, and Low Dressing Percentages for each of the previous mentioned grades. As you study these price reports, note that the differences between High and Low Dressing cows and bulls will generally be greater than differences between grades. Many reports will indicate that Low Dressing cows will be discounted $8 to $15 per hundredweight compared to High Dressing cows, and will be discounted $5 to $7 per hundredweight compared to Average Dressing cows. These price differences are usually widest for the thinner cow grades (leans and lights). See examples from last week’s sale in Oklahoma City National Stockyards at https://www.ams.usda.gov/mnreports/ams_1823.pdf
As producers market cull cows and bulls, they should be cautious about selling cattle with excess fill. The large discounts due to low dressing percent often will more than offset any advantage from the added weight.
Cow-Calf Corner is a weekly email newsletter by the Oklahoma Cooperative Extension Agency.