Nov. 9, 2020
Winter wheat grazing revisited
By Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
The early winter storm in late October brought timely and much-needed rain to much of Oklahoma and sharply reduced drought conditions. The latest weekly Oklahoma Drought Monitor showed D0-D4 conditions of 26.13%, down from 52.06% the prior week.
With much of the winter wheat crop planted (88% as of Nov. 1) and emerged (71%), the crop responded quickly to the moisture. The latest Crop Progress report showed that Oklahoma wheat rated good to excellent jumped to 34%, up from 11% the prior week. The improvement in the wheat crop revived prospects for grazing winter wheat, albeit with some delay.
Oklahoma feeder cattle markets jumped sharply last week from the low two weeks ago during the storm. Prices last week for steers weighing 450-600 pounds were the highest since late August/early September. For example, the combined Oklahoma auction average price for 450-500 pound, medium/large frame #1 steers was $166.89/cwt, compared to $147.34/cwt. the previous week.
The chart below shows current prices for feeder cattle in Oklahoma auctions. The market is quite different for animals below and above 600 pounds. For animals below 600 pounds, the price drops sharply with additional weight (i.e. a bigger price rollback). Above 600 pounds, the price changes little with additional weight. A bigger price rollback reduces the value of gain. For example, the value of gain for 200 pounds of gain from 450 to 650 pounds is $0.62/lb. but for 650 to 850 pounds, the value of gain is $1.36/cwt.
This price pattern suggests that stocker producers will want to consider several factors including beginning weight, how long the animals will be owned and how much gain will be added to the animals. With a possibly-shortened winter grazing period, a heavier beginning weight currently offers a higher value of gain and may make sense.
The next few weeks may result in additional demand for stockers but will likely also see larger supplies of feeder cattle in Oklahoma auctions. Combined Oklahoma auction volume the past six weeks has been down nearly 33%, in part due to the impacts of the winter storm. It appears there are significant numbers of calves and feeders yet to be marketed this fall. Stocker and feeder prices could move either higher or lower in the next month depending on the balance of increased demand and increased supply in auctions.
Another factor that is helping support cash feeder cattle prices is the current strength in Feeder futures. Winter grazing typically keys off the March Feeder futures contract. March contract prices increased to over $135/cwt. at the end of last week, up from lows below $126/cwt. less than two weeks ago. Feeder markets are also closely watching feed grain markets as strong export demand has pushed grain prices higher.
Winter grazing stocker budgets are very dynamic and should be evaluated carefully. Purchase prices are volatile and uncertain in the coming weeks. Expected sales price are also uncertain, at least as far as volatility in March Feeder futures is an indication. Opportunities for purchase prices, risk management and establishing expected fixed or minimum sales prices may be fleeting given the volatility in cattle and feed markets.
How many heifers to keep?
By Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Matching the number of cattle to the grass and feed resources on the ranch is a constant challenge for any cow-calf producer. Also producers strive to maintain cow numbers to match their marketing plans for the long term changes in the cattle cycle. Therefore, it is a constant struggle to evaluate the number of replacement heifers that must be developed or purchased to bring into the herd each year.
As a starting place in the effort to answer this question, it is important to look at the “average” cow herd to understand how many cows are in each age category. The Dickinson, North Dakota Research and Extension Center reported on the average number of cows in their research herd by age group for a span of 20 years. The following graph depicts the “average” percent of cows in this herd by age group.
Average Percentage of Cows by Age in North Dakota Research Herd
The above graph indicates that the typical herd will, “on the average,” introduce 17% new first calf heifers each year. Stated another way, if 100 cows are exposed to bulls or AI each year, 17 of them will be having their first baby. Therefore, this gives us a starting point in choosing how many heifers we need to save each year.
Next, we must predict the percentage of heifers that enter a breeding season that will become pregnant. The prediction is made primarily upon the nutritional growing program that the heifers receive between weaning and breeding. If heifers are grown slowly and weigh 50% to 55% of their mature weight at the start of breeding, then about half of the heifers will be cycling early in the breeding season.
In this 100-cow herd scenario, about 30 heifers need to be kept and exposed to AI or the bull to assure the target number of pregnant heifers is met. This allows for natural selection pressure on early puberty and reproductive soundness if the breeding season is short (30 to 45 days). More pasture space and breeding costs will be needed because of the larger number of heifers kept.
Growing the heifers at a higher rate of gain would be necessary to reach 60% to 65% of the mature weight at breeding. Utilizing a growing program such as wheat pasture (for spring calving heifers) would allow the heifers to gain 1.5 to 2 pounds per day and about 90% or more of the heifers should be cycling early in the breeding season.
Even in the very best scenarios, a few heifers will be difficult or impossible to breed. Most extension specialists and researchers write about the need to always expose at least 10% more heifers than you need even when they are grown rapidly and all weigh at least 65% of the expected mature weight. Therefore, in the example of a 100-cow herd, if the heifers are fed to reach over 60% of the mature weight at breeding, we expect to keep back 19 or 20 heifers to go into the growing program and breeding season. Fewer heifers are started in this growing program, but higher feed costs per heifer will be necessary to reach the higher rate of gain.
Like so many decisions in the beef industry, there is more than one answer to important questions.