Cow-Calf Corner: More cattle on feed and less cold storage; Feed conversions of creep feeds for nursing calves

April 25, 2016
More cattle on feed and less cold storage
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
The latest Cattle on Feed (COF) report showed feedlot inventories (among feedlots with 1,000 head or more capacity) on April 1 of 10.853 million head, 100.5 percent of year ago levels. March feedlot marketings were 107 percent of last year and placements were 104.6 percent of year earlier placements. There was one more business day in March 2016 compared to one year ago. There were no major surprises in the report but it could be considered mildly bullish with placements on the low end of expectations. Nevertheless, this is the second month of year over year increases in feedlot placements; a trend that will continue as feeder supplies continue to grow in the coming months.
The COF report showed larger placements in the Texas, Oklahoma and Colorado compared to Iowa and Nebraska. All of the increase in March placements were feeders over 700 pounds with the largest increase in feeders 700-800 pounds. These cattle will hit the market mid to late third quarter and in the fourth quarter of the year.
This report also included the quarterly breakdown of steers and heifers on feed and indicates some changes. The total inventory of heifers on feed on April 1 was up 4.5 percent year over year. This is the first increase in quarterly heifers on feed inventory in 14 quarters, since July of 2012. This likely reflects both a growing heifer supply and some slowdown in heifer retention. Herd expansion is likely still occurring, but at a slower pace in 2016. In contrast, the inventory of steers in feedlots on April 1 was down 1.3 percent from one year ago.
This is the first year over year decrease in quarterly steer inventory in feedlots since July 2014. This follows the dramatic increase in steers on feed in 2015 that coincided with delayed marketings and a sharp increase in carcass weights. Though the current steer inventory in feedlots is still large, the decrease in quarterly supplies is a good sign that feedlots are moving steers at a more timely pace this year. Steer carcass weights are currently about 12 pounds heavier year over year while heifer carcasses are running about 10 pounds more than one year ago. However, both steers and heifer carcass weights have decreased seasonally in April.
The monthly Cold Storage report was also released by USDA on Friday. The report indicated that cold storage supplies of beef continued to decline in March. This follows considerable concern that developed in January as beef in cold storage reached the highest monthly totals since November 2006. Cold storage inventories are indicative of market conditions and may reflect changing short term beef demand conditions and changing beef imports and exports.
However, I think there is often misunderstanding of the role of cold storage and the implications of changing cold storage levels. I received many questions early in the year about whether cold storage supplies of beef were a major supply issue. Some producers wondered whether the recent record inventories meant that we had multiple years of beef supply in cold storage. It’s important to understand that cold storage inventories of beef represent a minimal pipeline level of supplies in the industry from month to month. The average monthly supply of beef in cold storage in 2015 was less than 2 percent of total beef disappearance for the year. The build-up of cold storage in 2015 was a useful indicator of sluggishness in beef movement (especially certain products) and large beef imports but was not, by itself, a major supply factor.
 
Feed conversions of creep feeds for nursing calves
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Feed conversions of calves fed creep feeds have been quite variable to say the least. Conversions of 5:1 or 5 pounds of grain consumed to 1 extra pound of calf weight are very rare and the optimum that can be expected when producers are using a “typical” high energy creep feed. Conversions may get as poor as 15:1 (or worse) in some situations. Therefore, it is obvious that several factors come in to play to determine the amount of creep feed that is consumed for each additional pound of gain.
Cows that give large amounts of milk to their calves will provide enough protein and energy to meet the growth potential of their calves. In that scenario, it is reasonable to assume that the feed conversion from creep feeding could be quite poor (10:1 or worse). If however the milk production of the cows is limited for any reason, then the added energy and protein from the creep feed provides needed nutrients to allow calves to reach closer to their genetic maximum capability for growth.
Calves from poor milking cows may convert the creep feed at a rate of about 7 pounds of feed for each pound of additional calf weight. Poor milking can be a result of genetically low milk production or restricted nutritional status.
Nutritional restriction due to drought situations often adversely affects milk production and therefore calf weaning weights. Shortened hay supplies and reduced standing forage due to drought or severe winter weather often set the stage for the best results from creep feeding. These feed conversion ratios become important when making the decision to buy and put out creep feed for spring born calves. As you are calculating the cost of creep feeds, remember to include the depreciation cost of the feeders and the delivery of the feed.
Then of course, it is important to compare that cost of creep feeding to the realistic “value of added gain.”
Although 500 pound steer calves may bring $1.80/lb at the market, the value of added gain is currently about 80 cents per pound. Therefore the estimated creep feeding cost per pound of added gain must be less than 80 cents for the practice to be projected to be profitable.
Different ranching operations will come to different conclusions about the value of creep feeding. In fact, different conclusions may apply to different groups of cows within the same herd. Creep feeding may be more beneficial to calves from thin, young cows and less efficient to calves reared by mature cows that are in better body condition and producing more milk.