Monday, July 18, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown Ag Economics, MU July 15, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown
Ag Economics, MU   July 15, 2016

The average price of choice beef at retail was $6.20 per pound during
June.  That was 11.9 cents higher than in May, 20.6 than in June 2015,
and the highest monthly average price since March.  The June average
grocery store price for all fresh beef was $5.832 per pound.  

The 5 area average price of for slaughter steers was $123.00/cwt
during June.  That as $7.20 lower than in May, $28.20 lower than in
June 2015, and the lowest monthly average since August 2013.

USDA’s July WASDE forecasts have U.S. beef production up 5.3% this
year and up another 3.4% in 2017.

USDA weekly crop progress report said that 13% of U.S. pastures were
in poor or very poor condition as of July 10.  That is up 1 point from
the week before and 4 points higher than a year ago.

Fed cattle sales volume was moderate this week.  Through Thursday, the
5-area average price for slaughter steers sold on a live weight basis
was $117.00/cwt, down $3.38 from last week’s average and down $29.00
from a year ago.  The 5-area dressed steer price averaged $187.42/cwt,
down $3.24 from the week before and down $47.58 from a year ago.

This morning the choice boxed beef cutout value was $205.37/cwt, down
$4.49 from the previous Friday and down $27.94 from a year ago.  The
select carcass cutout this morning was $193.24/cwt, down $3.73 from
last week and down $36.44 compared to last year.  The choice-select
spread, $12.15/cwt this morning, remains large.

This week’s cattle slaughter totaled only 594,000 head, up 16.5% from
last week (which was low because of the Independence Day holiday) and
up 9.6% from a year ago.

The average steer dressed weight for the week ending on July 2 was 868
pounds, up 4 pounds from the week before, down 7 pounds from a year
ago, and below the year-ago level for the ninth consecutive week.
Year-to-date, cattle slaughter is up 3.1% and beef production is up

Stocker and feeder cattle prices at the Oklahoma City auction were
mostly steady this week.  Prices for medium and large frame #1 steers
by weight group were: 400-450# $170, 450-500# $158.50-$168, 500-550#
$159-$164.50, 550-600# $140-$160.25, 600-650# $143-$154, 650-700#
$137-$148.50, 700-750# $136.50-$148, 750-800# $138.50-$145.50,
800-900# $130-$141.50 and 900-1000# $126.50-$133/cwt.

The August live cattle futures contract settled at $110.92/cwt today,
down $1.30 for the week.  October fed cattle settled at $109.85/cwt,
down $2.47 from the previous Friday.  The December contract ended the
week at $111.45/cwt. 

August feeder cattle futures ended the week at $139.57/cwt, down $3.88
from a week earlier.  October feeder cattle closed the week down $4.10
at $137.37/cwt.

COW/CALF CORNER The Newsletter From the Oklahoma Cooperative Extension Service July 18, 2016

The Newsletter

From the Oklahoma Cooperative Extension Service
July 18, 2016

In this Issue:

The “positive associative effect” of high protein supplements
Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist

Road trip reveals good crop and pasture conditions
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

The “positive associative effect” of high protein supplements
Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist

Most of Oklahoma has substantial standing forage in pastures as we go into late summer.   As the day length shortens, plants become more mature and lower in protein content.  However, the protein requirements for growth, milk production, and body condition maintenance of beef cattle do not decrease as the “dog days of summer” arrive.

 The micro-organisms in the rumen of beef cows and replacement heifers require readily available protein to multiply and exist in large enough quantities to digest the cellulose in low quality roughages.  Protein supplementation of low-quality, low protein forages results in a “positive associative effect”. This “positive associative effect” occurs as supplemental protein available to the “bugs” in the rumen allows them to grow, multiply, and digest the forage more completely and more rapidly.  Therefore the cow gets more out of the forage she consumes, she digests it more quickly and is ready to eat more forage in a shorter period of time.  Data from Oklahoma State University illustrates this (Table 1). The prairie hay used in this study was less than 5% crude protein. When the ration was supplemented with 1.75 lbs of cottonseed meal per day, retention time of the forage was reduced 32% which resulted in an increase in feed intake of 27%. Because hay intake was increased, the animal has a better chance of meeting both the protein and energy requirement without supplementing other feeds. Because retention time was decreased, one could postulate the protein supplementation in this situation also increased digestibility of the forage.
Table 1. Effect of Cottonseed Meal Supplementation on Ruminal Retention Time and Intake of Low-Quality Prairie Hay

Daily Supplement of Cottonseed Meal

1.75 lb
Rumen Retention Time, Hr
Voluntary Daily Hay Intake, % of body wt.

As producers prepare their late summer, fall, and winter feed strategies, they can see the importance of providing enough protein in the diet of the cows to feed the “bugs” in the rumen.  If the forage is low in protein (less than 8 % crude protein), a small amount of supplemental protein such as cottonseed meal, soybean meal, or one of the higher protein by-product feeds, could increase the amount and digestibility of the forage being fed.  This strategy requires that ample forage is available to take advantage of the “positive associative effect”.  As the table above illustrates, properly supplemented cows or replacement heifers will voluntarily consume about 27% more forage if they were provided adequate protein.  As long as enough forage is available, this is a positive effect of a small amount of protein supplement. 

Road trip reveals good crop and pasture conditions
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

For the past week I have been traveling, first for meetings, then for vacation.  However, a market analyst is never completely on vacation when there is a chance to observe agricultural conditions.  A week ago, we traveled through the Oklahoma Panhandle, where the last bit of wheat harvest was finishing.  Pastures appeared very green for that area for mid-July.  Into southeastern Colorado, wheat harvest was well underway and producers were reporting record winter wheat yields.  With excellent moisture conditions, even volunteer wheat and grow back after late grazing was producing good wheat yields.  Pasture conditions have been very good and cattle gains were excellent through winter and spring.  Like the Oklahoma Panhandle, the semi-arid region of southeastern Colorado looked very green for mid-July.

After a couple of days in Denver, we headed east on Interstate 70 where wheat harvest was not really started but the wheat looked very good.  Last week Colorado reported 33 percent of wheat harvested in the state compared to 46 percent for the five-year average.  Pasture conditions again looked very good with Colorado reporting 71 percent of pastures in good to excellent condition, up from 60 percent one year ago.  We traveled the entire length of Kansas west to east on I-70 to Kansas City.  As more corn appeared, it also looked in very good condition with the state reporting 67 percent of corn in good to excellent condition. In western Kansas, the majority of the corn is not yet or just beginning tasseling.  In eastern Kansas and across Missouri on I-70 more of the corn is tasseling and with no signs of stress on corn or soybeans.  Last week 71 percent of Missouri corn and 65 percent of soybeans were reported in good to excellent condition. 

From St. Louis, we traveled across southern Illinois and Indiana on Interstate 64.  Corn conditions were very good with Illinois and Indiana reporting 76 percent and 74 percent in good to excellent condition.  While the majority of corn is tasseling, it is apparent that a significant portion of corn in this area was planted later, is 18 to 24 inches shorter, and not yet tasseling.  This later corn needs more time for pollination and is vulnerable yet for late July weather conditions.  Soybeans also look very good with the two states reporting 74 and 72 percent in good to excellent condition. A limited amount of late planted soybeans are still very small.

From Louisville we dropped into central Kentucky and then into north central Tennessee yesterday.  Pasture and crop conditions in both states appear very good, at least for the parts we have seen.  Looking at the drought monitor map, it is clear that we missed some dry areas including south central and eastern Tennessee and other parts of the southeast where Georgia, Alabama and the Carolinas are all reporting growing percentages of poor and very poor pasture conditions.  Some drier conditions exist in the northern Plains, the eastern Cornbelt and extend into the northeastern part of the country.  Parts of the West are still dry with California reporting 40 of poor to very poor pastures conditions but that is down from 50 percent this time last year.  Dry conditions have redeveloped in parts of the Pacific Northwest. 

All in all, conditions are quite good in much of the country with summer well underway.  My travels this last week have revealed very good crop and pasture conditions across the middle of the country in a nearly 1200 mile line west to east from the Rocky Mountains to the Mid-South. 

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