Forage Management Strategies

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1 Louisiana Cattle Market Update Friday, April 27 th, 2012 Ross Pruitt, Department of Agricultural Economics and Agribusiness LSU AgCenter Forage Management Strategies Forage conditions in Louisiana are vastly improved over a year ago with some areas of the state a couple of weeks ahead of normal in terms of forage production. Hay production has already begun which will help rebuild hay stocks for the state which were 30% below the five year average this past December. That production will not likely be reflected in the May 1 st hay stocks, but increased production of hay should be reflected in USDA data later this summer/early fall. An estimated 440,000 acres will be devoted to hay production this year in Louisiana, an increase of 10,000 acres from last year according to USDA NASS Prospective Plantings report released last month. The abundance of forage is a welcome relief from last year, but it does necessarily not mean the forage is of higher quality than normal. While winter ryegrass pastures may be in better shape than they were this time last year, concerns about warm season grasses is warranted in situations where growth is beginning to occur. Abundant rainfall and a lack of cold stress during the winter may have limited the damage incurred from last year s drought, but assessment of warm season grasses is still warranted. If the stand was lost last year, adjustments to stocking rates may be necessary and potential expansion plans may need to be temporarily postponed. While medium and long term weather forecasts are predicting an equal chance of below, normal, or above average precipitation for this year, above average temperatures are forecasted for Louisiana for the remainder of 2012 according to NOAA s Climate Prediction Center. There is no guarantee this forecast will prove to be correct, but there s no guarantee that it will be wrong either. Moisture levels will be key for warm season grasses, but warmer than normal temperatures will add a different dynamic to forage management following last year s drought. If above average temperatures do occur, the nutritional value of summer annuals could decline more rapidly than normal. Supplementation, though costly, might be necessary to keep cows in proper body condition. There is the chance that pregnancy percentages may decrease due to stress females endured last year and proper nutrition will be needed to make sure calving percentage is not lowered for next year. Additional tweaks to other commonly employed strategies may be warranted as the spring becomes summer and fades into fall. Providing your operation flexibility from a forage management and calf marketing perspective should be developed now that allows for different tactics to be employed should situations develop.

2 Tuesday afternoon saw the confirmation of the 4 th U.S. cow confirmed to carry bovine spongiform encephalopathy (BSE/mad cow disease). The animal did not enter the U.S. food supply as it was never presented for slaughter for human consumption and safety protocols. As of this writing, Indonesia is the only country to cease accepting certain U.S. beef products, but Indonesia is a small market for U.S. beef. No other country has ceased importing U.S. beef, although many are increasing testing of U.S. beef, namely South Korea. One South Korean retailer has voluntarily suspended importing U.S. beef. The U.S. Senate released its version of the 2012 Farm Bill earlier this week. Dairy provisions in the Senate version included a version of the National Milk Producers Federation s Foundation for the Future program which is a voluntary margin protection program as well as elimination of the Milk Income Loss Contract starting June 30, The Senate version would also re establish the Livestock Indemnity Program, Livestock Forage Program, and Emergency Assistance for Livestock, Honey Bees, and Farm Raised Fish program (ELAP) that was included in the 2008 Farm Bill. The House still has to write their version with many House members not impressed with the Senate version. Nearby corn futures soared higher this week while new crop contracts were slightly higher. Export sales to China provided support to nearby contracts as strong commercial buying continues in current marketing year contracts. Favorable weather outlooks and spillover impacts from the finding of BSE limited upside in contracts in the next marketing year. Live and feeder cattle futures finished lower on the week following the discovery of the BSE infected dairy cow in California on Tuesday. The majority of contract months were at or near limit down Tuesday, but were able to gain back some of those losses on Wednesday and Friday. Lingering concerns about BSE pressured the markets Thursday and erased some of the gains that were recovered Wednesday. Moderate cash cattle trade occurred Thursday with a lighter volume on Friday. Live cattle sales varied from $1 to $3 lower from last week. Prices in Texas were $119, $ in Kansas, and $121 $122 in Nebraska. Dressed sales Friday in Nebraska were $192 to $194.

3 Feeder Steer Prices* $185 $175 $165 $155 $145 $135 $ lbs lbs lbs OKC $ $ $/Cwt OKC $ $ $ $ $ $ *Prices are for Medium and Large 1 2 Steers **Mississippi prices are for midpoint of and steers Source: USDA AMS OKC $90 Mississippi Cull Cow Prices $/Cwt $85 $80 $75 Breaking Boning Lean This Week $82.00 $89.50 $80.50 Last Week $83.00 $88.00 $81.00 This Week Last Week Source: USDA AMS

4 Table 1. Futures Prices Live Feeder Month Cattle Change* Cattle Change* Corn Change* April $ May $ /2 June $ July 625 1/2 22 1/2 August $ $ September $ October $ $ November $ December $ /4 2 January $ February $ March $ /4 2 1/2 Source: DTN * Change is from the previous Friday s close

5 Table 2. State and National Market Information Commodity This Week Last Week Last Year 5 Area Fed Steer Price Live $ $ $ Dressed $ $ $ Oklahoma City Feeder Cattle Prices cwt Med and Large #1 $ $ $ cwt Med and Large #1 $ $ $ Boxed Beef Cutout Values (weekly average) lb Choice cutout $ $ $ lb Select cutout $ $ $ U.S. Pork Cutout Value $ $ $ Georgia Dock Broilers $ $ $ Georgia B/S Breasts $ $ $ Georgia Leg Quarters $ $ $ Meat production (million lbs) Beef Pork Slaughter (1,000 head) Cattle Hogs 2,092 2,084 1,955 Broilers/Fryers 152, , ,256 Average Dressed Weight Cattle Hogs /21/2012 4/14/2012 4/23/2011 Poultry Placements (in thousands) 1 LA Broiler Egg Sets 3,530 3,530 3,334 US Broiler Egg Sets 200, , ,132 LA Broiler Chick Placements 3,095 3,040 2,921 US Broiler Chick Placements 166, , ,008 Source: USDA Agricultural Marketing Service, USDA National Agricultural Statistics Service and Livestock Marketing Information Center 1 Note the placements numbers are lagged by one week prior to publishing.