Tennessee Market Highlights November 3, 2017 Number: 44 Trends for the Week Compared to a Week Ago Slaughter Cows $3 to $6 lower Slaughter Bulls $6 to $7 lower Feeder Steers Steady to $3 lower Feeder Heifers Steady to $2 higher Feeder Cattle Index Wednesday s index: 158.71 Fed Cattle The 5-area live price of $122.96 is up $12.43. The dressed price is up $16.80 at $191.80. Corn December closed at $3.48 a bushel, the same as last Friday. Soybeans January closed at $9.86 a bushel, the same as last Friday. Wheat December closed at $4.25 a bushel, down 2 cents since last Friday. Cotton December closed at 68.72 cents per lb, up 0.52 cents since last Friday. Livestock Comments by Dr. Andrew P. Griffith FED CATTLE: Fed cattle traded $7 to $8 higher compared to last week on a live basis. Prices on a live basis were $124 to $125 while dressed prices were mainly $194. The 5-area weighted average prices thru Thursday were $122.96 live, up $12.43 from last week and $191.80 dressed, up $16.80 from last week. A year ago prices were $104.47 live and $162.59 dressed. The negative basis for finished cattle continues this week, but that is of little concern to cattle feeders considering the escalation of prices. In two weeks, cattle feeders are grossing $150 more per head than the cattle sold in the middle of October. The increase in gross revenue bodes well for net profits as profits per head have escalated quickly. The higher fed cattle prices are expected to persist as live cattle futures lead the way, but this also means cattle feeders will be willing to pay more for feeder cattle. The question now turns to how high will live cattle prices go in the fourth quarter and how long will they maintain such a level. In order to hedge against being wrong, there continues to be signs of higher prices in coming weeks. BEEF CUTOUT: At midday Friday, the Choice cutout was $208.78 up $0.53 from Thursday and up $5.23 from last Friday. The Select cutout was $193.29 up $0.13 from Thursday and up $0.94 from last Friday. The Choice Select spread was $15.49 compared to $11.20 a week ago. As cattle feeders are riding higher fed cattle prices, packers are not seeing the same gains in the boxed beef market compared to the increased cost of purchasing those animals. Grocery stores, restaurants, and food service entities are beginning to make purchases for the holiday centerpiece. These purchases have helped push Choice beef prices higher while Select prices have made little improvement. The demand leading up to the holiday season is generally for higher quality beef and primarily middle meats. The demand for higher quality beef will result in the Choice Select spread continuing to widen the next few weeks. Additionally, this means the Choice boxed beef price will be supported primarily by middle meats the next month or so before winter purchases begin dominating the market. Once the winter purchases take over then the Choice Select spread will begin narrowing and could narrow to near zero in January or February. Packers will be more concerned with maintaining positive margins than anything else. OUTLOOK: Feeder cattle futures prices have had two consecutive weeks of strong moves to the upside. However, this two week move is just a small part of a much larger move that has been in motion since early August. Feeder cattle prices generally experience their annual apex during the summer months, but the seasonal pattern has not held for cattle ready to enter the feedlot. Placements into feedlots the past few months have been extremely strong and this has supported feeder cattle prices. Feeder cattle futures prices have gained $15 to $20 per hundredweight since early August. This price increase is not like what the market participated in during the 2013 to 2015 time period where volatility ruled the market. Feeder cattle prices the past three months have slowly and methodically made gains which bode well for a sustained feeder cattle market. The anomaly in the feeder cattle market over most of that time was that finished cattle prices softened much of that time. Thus, the first ten or eleven weeks of stronger feeder cattle prices were not driven by the live cattle market indicating significantly higher prices. However, the strength in the market the past two weeks has largely been due to feeder cattle markets chasing the live cattle markets run to the upside. The strong finished cattle market provides support for continued strength in the feeder cattle market (Continued on page 2)
Livestock Comments by Dr. Andrew Griffith (Continued from page 1) moving forward. If the live cattle market makes a turn to the downside then feeder cattle will quickly and drastically follow. The calf market has also been supported by the strength in downstream markets. However, the normal seasonal tendency for calf prices to soften during the fall months is equally fighting the upward price movement which has left calf prices fairly steady the past several weeks. The one guarantee about all price projections is that they are always incorrect. However, the hope is that the correct direction of prices is predicted which can contribute to decision making. ASK ANDREW, TN THINK TANK: This week s question concerns weigh-in versus weigh-out markets. The benefit of a weigh-in market is that the cattle are weighed on arrival at the sale barn which usually results in less shrink compared to a weigh-out market. Most markets in the state use the weigh-out method which means the animal is weighed just prior to stepping into the sale ring. The weigh-in method is often used for sales where cattle are being grouped to be sold in larger lots such as a graded feeder calf sale or an alliance sale. Cattle buyers are aware of the weighing conditions and will bid prices based on weighing conditions. Thus, cattle buyers will generally apply a certain shrink factor to the price when bidding at weigh-in markets for freshly weaned calves, because those calves are certain to continue shrinking. The weigh-in versus weigh-out market is less of a factor when dealing with weaned cattle as long as hay and water are made available to the animal. Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996. FRIDAY S FUTURES MARKET CLOSING PRICES: Friday s closing prices were as follows: Live/fed cattle December $127.30 +2.98; February $131.75 +3.00; April $129.80 +2.40; Feeder cattle November $160.88 +2.95; January $161.53 +3.30; March $158.35 +2.83; April $158.23 +2.73; December corn closed at $3.48 down $0.02 from Thursday. Milk Futures Thursday November 2, 2017 Month Class III Close Class IV Close Nov 16.56 13.90 Dec 15.73 13.93 Jan 15.42 13.98 Feb 15.33 14.04 Mar 15.18 14.29 Average Daily Slaughter Cattle Hogs Number of head This week (4 days) 116,750 459,000 Last week (4 days) 116,000 467,250 Year ago (4 days) 114,500 447,500 This week as percentage of Week ago (%) 101% 98% Year ago (%) 102% 103% USDA Box Beef Cutout Value Choice 1-3 Select 1-3 600-900 lbs 600-900 lbs $/cwt - Thursday 208.25 193.16 Last Week 202.37 191.91 Year ago 187.44 173.93 Change from week ago +5.88 +1.25 Change from year ago +20.81 +19.23 2
Crop Comments by Dr. Aaron Smith Overview Cotton was up; wheat was down; and corn and soybeans were mixed for the week. For the month of October, December 2017 corn futures traded mostly flat opening at $3.54 ¾ and closing at $3.45 ¾, down 9 cents. Better than projected national yields have increased supply estimates and will likely keep cash prices in Tennessee well under $4.00 for the remainder of 2017. However, a 10 to 40 cent seasonal price appreciation in most locations should be realized as we move towards the New Year. For the month of October, November 2017 soybean futures opened at $9.67 ½ and closed at $9.73 ¾, up 6 ¼ cents. November 2017 soybeans set the contract low on June 23 ($9.07). Prices are currently in an intermediate term uptrend, however prices are down approximately 50 cents from July highs. Volatility in soybean prices is likely to continue as market focus will shift to export sales and South American crop progress. For the month of October, December 2017 cotton futures opened at 68.80 and closed at 68.38, down 0.42 cents for the month. After the hurricane sparked rally in September, cotton futures have resumed its well-established 66 to 71 cent trading range. Prices are likely to continue to trade in the current range with a greater potential to break lower than higher. For the month of October July 2018 wheat futures opened at $4.89 ¾ and closed at $4.63 ¾, down 26 cents for the month. Wheat prices remained depressed due to large global supplies. A record Russian wheat harvest has provided stiff export competition while large domestic corn supplies provides domestic competition. Corn December 2017 corn futures closed at $3.48 the same as last Friday. For the week, December 2017 corn futures traded between $3.45 and $3.52. Across Tennessee, average basis (cash price-nearby futures price) strengthened at Memphis, Northwest Barge Points, Northwest, Lower-middle, and Upper-middle Tennessee. Overall, basis for the week ranged from 41 under to 16 over the December futures contract with an average of 14 under at the end of the week. Nationally, the Crop Progress report estimated corn harvested at 54% compared to 38% last week, 73% last year, and a 5-year average of 72%; and corn condition at 66% good-toexcellent and 11% poor-to-very poor. In Tennessee, the Crop Progress report estimated corn condition at 87% good-to-excellent and 3% poor-to-very poor; and corn harvested at 97% compared to 95% last week, 99% last year, and a 5-year average of 95%. Dec/Mar and Dec/Dec future spreads were 14 and 45 cents, respectively. Corn net sales reported by exporters from October 20-26 were within expectations with net sales of 31.9 million bushels for the 2017/18 marketing year and 3.5 million bushels for the 2018/19 marketing year. Exports for the same time period were down from last week at 23.6 million bushels. Corn export sales and commitments were 36% of the USDA estimated total annual exports for the 2017/18 marketing year (September 1 to August 31) compared to a 5-year average of 41%. Ethanol production for the week ending October 27 was 1.056 million barrels per day up 17,000 from the previous week. Ethanol stocks were 21.474 million barrels, up 440,000 barrels. In Tennessee, January 2018 cash forward contracts averaged $3.57 with a range of $3.41 to $3.74. March 2018 corn futures closed at $3.62 the same as last Friday. December 2018 corn futures closed at $3.93 down 1 cent since last Friday. (Continued on page 4) 3
Crop Comments by Dr. Aaron Smith Downside price protection could be obtained by purchasing a $4.00 December 2018 Put Option costing 30 cents establishing a $3.70 futures floor. Soybeans January 2018 soybean futures closed at $9.86 the same as last Friday. For the week, January 2018 soybean futures traded between $9.82 and $10.00. Average soybean basis strengthened or remained unchanged at Memphis, Northwest Barge Points, and Northwest Tennessee and weakened at Upper-middle and Lower-middle Tennessee. Basis ranged from 59 under to 8 under the November futures contract at elevators and barge points. Average basis at the end of the week was 25 under the November futures contract. Nationally, the Crop Progress report estimated soybeans harvested at 83% compared to 70% last week, 85% last year, and a 5-year average of 84%. In Tennessee, the Crop Progress report estimated soybean condition at 84% good-to-excellent and 3% poor-to-very poor; and soybeans harvested at 63% compared to 49% last week, 84% last year, and a 5-year average of 64%. November/December 2017 soybean-to-corn price ratio was 2.83 at the end of the week. Nov/Jan and Nov/Nov future spreads were 11 cents and 12 cents, respectively. In Tennessee, January 2018 soybean cash contracts average $9.77 with a range of $9.47 to $10.05. Net sales reported by exporters were above expectations with net sales of 72.3 million bushels for the 2017/18 marketing year and 0.6 million bushels for the 2018/19 marketing year. Exports for the same period were up from last week at 98.8 million bushels. Soybean export sales and commitments were 50% of the USDA estimated total annual exports for the 2017/18 marketing year (September 1 to August 31), compared to a 5-year average of 65%. March 2018 soybean futures closed at $9.97 up 1 cent since last Friday. November 2018 soybean futures closed at $9.98 up 1 cent since last Friday. Downside price protection could be achieved by purchasing a $10.00 November 2018 Put Option which would cost 62 cents and set a $9.38 futures floor. November/December 2018 soybean-to-corn price ratio was 2.54 at the end of the week. Cotton Delta upland cotton spot price quotes for November 2 were 68.33 cents/lb (41-4-34) and 69.58 cents/lb (31-3-35). Adjusted world price (AWP) increased 0.04 cents to 61.05 cents per pound. Net sales reported by exporters were down from last week with net sales of 209,500 bales for the 2017/18 marketing year and 47,100 bales for the 2018/19 marketing year. Exports for the same period were down from last week at 86,800 bales. Upland cotton export sales were 62% of the USDA estimated total annual exports for the 2017/18 marketing year (August 1 to July 31), compared to a 5-year average of 48%. Dec/Mar and Dec/Dec cotton futures spreads were 0.05 cents and 1.04 cents, respectively. 4 (Continued on page 5)
Crop Comments by Dr. Aaron Smith Nationally, the Crop Progress report estimated cotton bolls opening at 93% compared to 87% last week, 95% last year, and a 5-year average of 95%; cotton harvested at 46% compared to 37% last week, 45% last year, and a 5-year average of 45%; and cotton condition at 55% good-to-excellent and 15% poor-to-very poor. In Tennessee, cotton condition was estimated at 89% good-toexcellent and 2% poor-to-very poor; and cotton harvested at 65% compared to 56% last week, 72% last year, and a 5-year average of 52%. December 2017 cotton futures closed at 68.72 cents up 0.52 cents since last Friday. For the week, December 2017 cotton futures traded between 67.95 and 69.37 cents. March 2018 cotton futures closed at 68.77 up 0.66 cents since last Friday. December 2018 cotton futures closed at 69.76 up 0.79 cents since last Friday. Downside price protection could be obtained by purchasing a 70 cent December 2018 Put Option costing 4.6 cents establishing a 65.4 cent futures floor. Wheat In Memphis, old crop cash wheat ranged from $3.93 to $4.01. Wheat net sales reported by exporters were within expectations with net sales of 12.8 million bushels for the 2017/18 marketing year. Exports for the week were up from last week at 13.9 million bushels. Wheat export sales were 59% of the USDA estimated total annual exports for the 2017/18 marketing year (June 1 to May 31), compared to a 5-year average of 64%. Dec/Mar and Dec/Jul future spreads were 19 cents and 46 cents, respectively. December 2017 wheat futures closed at $4.25 down 2 cents since last Friday. December 2017 wheat futures traded between $4.16 and $4.29 this week. December wheat-to-corn price ratio was 1.22. Nationally, the Crop Progress report estimated winter wheat planted at 84% compared to 75% last week, 85% last year, and a 5-year average of 87%; winter wheat emerged at 65% compared to 52% last week, 69% last year, and a 5-year average of 68%; and winter wheat condition at 52% good-to-excellent and 12% poorto-very poor. In Tennessee, winter wheat planted was estimated at 55% compared to 41% last week, 69% last year, and a 5-year average of 52%; and winter wheat emerged at 28% compared to 14% last week, 31% last year, and a 5-year average of 25%. March 2018 wheat futures closed at $4.44 down 1 cent from last Friday. In Tennessee, June/July 2018 cash forward contracts ranged from $4.33 to $4.87 for the week. July 2018 wheat futures closed at $4.71 down 3 cents since last Friday. Downside price protection could be obtained by purchasing a $4.80 July 2018 Put Option costing 33 cents establishing a $4.47 futures floor. Additional Information: Links for data presented: U.S. Export Sales - https://apps.fas.usda.gov/export-sales/esrd1.html USDA FAS: Weekly Export Performance Indicator https://apps.fas.usda.gov/esrquery/esrpi.aspx EIA: Weekly ethanol Plant Production - https://www.eia.gov/dnav/pet/pet_pnp_wprode_s1_w.htm EIA: Weekly Supply Estimates - https://www.eia.gov/dnav/pet/pet_sum_sndw_a_epooxe_sae_mbbl_w.htm Upland Cotton Reports - https://www.fsa.usda.gov/fsa/epasreports?area=home&subject=ecpa&topic=fta-uc Tennessee Crop Progress - https://www.nass.usda.gov/statistics_by_state/tennessee/publications/crop_progress_&_condition/ U.S. Crop Progress - http://usda.mannlib.cornell.edu/mannusda/viewdocumentinfo.do?documentid=1048 USDA AMS: Market News - https://www.ams.usda.gov/market-news/search-market-news If you would like further information or clarification on topics discussed in the crop comments section or would like to be added to our free email list please contact me at aaron.smith@utk.edu. 5
Futures Settlement Prices: Crops & Livestock Friday, October 27, 2017 Thursday, November 2, 2017 Commodity Contract Month Friday Monday Tuesday Wednesday Thursday Soybeans Nov 9.75 9.72 9.73 9.81 9.89 ($/bushel) Jan 9.86 9.84 9.84 9.91 9.99 Mar 9.96 9.95 9.95 10.01 10.09 May 10.06 10.04 10.04 10.10 10.18 Jul 10.13 10.12 10.12 10.18 10.26 Aug 10.14 10.13 10.13 10.19 10.27 Corn Dec 3.48 3.48 3.45 3.48 3.50 ($/bushel) Mar 3.62 3.62 3.59 3.61 3.64 May 3.71 3.71 3.68 3.70 3.72 Jul 3.78 3.79 3.76 3.77 3.79 Sep 3.85 3.85 3.82 3.84 3.86 Dec 3.94 3.94 3.91 3.93 3.95 Wheat Dec 4.27 4.24 4.18 4.18 4.26 ($/bushel) Mar 4.45 4.43 4.36 4.36 4.44 May 4.59 4.56 4.49 4.49 4.57 Jul 4.74 4.70 4.63 4.63 4.72 Sep 4.90 4.87 4.79 4.79 4.88 Soybean Meal Oct 312 ($/ton) Dec 314 312 311 313 317 Jan 317 314 313 315 319 Mar 319 317 317 319 322 May 322 319 319 321 325 Jul 322 322 322 324 328 Cotton Dec 68.20 68.64 68.38 68.17 69.08 ( /lb) Mar 68.11 68.58 68.34 68.15 68.97 May 69.16 69.65 69.42 69.22 70.03 Jul 69.89 70.36 70.16 69.96 70.73 Oct 69.39 69.88 69.71 69.39 69.98 Live Cattle Oct 115.37 119.57 120.50 ($/cwt) Dec 120.82 123.40 125.62 126.60 124.32 Feb 125.75 127.45 129.55 130.05 128.75 Apr 125.02 125.85 127.57 127.90 127.40 Jun 117.07 117.42 118.82 119.80 119.62 Feeder Cattle Oct 155.12 ($/cwt) Nov 156.47 158.32 159.42 159.70 157.92 Jan 155.95 157.35 159.57 160.65 158.22 Mar 153.00 154.12 156.07 157.17 155.52 Apr 152.90 153.97 155.80 156.90 155.50 May 151.90 153.05 154.72 155.82 154.60 Market Hogs Dec 64.45 65.17 68.00 66.60 65.80 ($/cwt) Feb 70.25 71.05 73.00 72.15 72.05 Apr 74.25 74.60 74.90 75.57 75.72 May 78.17 78.47 78.97 79.85 80.27 Jun 81.32 81.60 81.60 82.85 82.97 6
Steers: Medium/Large Frame #1-2 This Week Last Week Year Ago Low High Weighted Average Weighted Average Weighted Average $/cwt 300-400 lbs 142.00 190.00 163.48 162.16 130.07 400-500 lbs 125.00 170.00 151.37 149.75 120.45 500-600 lbs 127.00 161.00 143.09 144.41 113.66 600-700 lbs 120.00 153.00 137.49 139.33 108.97 700-800 lbs 112.00 145.00 131.41 132.27 104.75 Steers: Small Frame #1-2 300-400 lbs 147.00 160.00 153.54 140.76 119.41 400-500 lbs 122.00 145.00 136.36 132.36 111.53 500-600 lbs 112.50 130.00 124.13 96.25 600-700 lbs Steers: Medium/Large Frame #2-3 300-400 lbs 125.00 163.00 147.27 145.49 115.42 400-500 lbs 120.00 158.00 139.92 135.98 108.64 500-600 lbs 115.00 150.00 133.52 128.35 98.93 600-700 lbs 114.00 141.00 128.90 125.07 94.44 700-800 lbs 109.00 130.00 119.17 116.68 91.38 Holstein Steers Prices on Tennessee Reported Livestock Auctions for the week ending November 3, 2017 300-400 lbs 500-600 lbs 68.00 96.00 77.13 700-800 lbs 65.00 87.50 83.52 61.93 Slaughter Cows & Bulls Breakers 75-80% 38.50 55.00 45.89 48.32 48.51 Boners 80-85% 40.00 56.00 48.55 53.39 52.95 Lean 85-90% 35.00 50.50 43.79 46.23 48.71 Bulls YG 1 62.00 79.00 68.64 75.25 77.05 Heifers: Medium/Large Frame #1-2 300-400 lbs 120.00 165.00 141.92 139.74 112.12 400-500 lbs 119.00 151.00 133.82 132.64 102.91 500-600 lbs 115.00 140.00 127.48 127.74 96.97 600-700 lbs 110.00 134.50 123.10 122.14 93.57 Heifers: Small Frame #1-2 300-400 lbs 110.00 136.00 125.01 124.98 99.45 400-500 lbs 99.00 133.00 117.60 118.73 79.97 500-600 lbs 110.00 125.00 114.13 114.30 79.36 600-700 lbs 116.00 117.50 116.91 77.59 Heifers: Medium/Large Frame #2-3 300-400 lbs 115.00 144.00 130.00 127.36 97.12 400-500 lbs 102.00 138.00 121.84 124.76 89.27 500-600 lbs 106.00 129.00 118.27 117.84 85.22 600-700 lbs 100.00 122.00 111.34 115.26 83.16 Cattle Receipts: This week: 9,241 (11) Week ago: 8,278 (9) Year ago: 7,246 (9) 7
Tennessee 500-600 lbs. M-1 Steer Prices 2016, 2017 and 5-year average Tennessee 700-800 lbs. M-1 Steer Prices 2016, 2017 and 5-year average 220 200 180 160 140 120 100 185 165 145 125 105 85 2011/2015 Avg 2016 2017 2011/2015 Avg 2016 2017 155 145 135 125 115 105 95 85 5-Area Finished Cattle Prices 2015, 2016 and 5-year average 105 95 85 75 65 55 45 35 Tennessee Slaughter Cow Prices Breakers 75-80% 2015, 2016 and 5-year average 2011/2015 Avg 2016 2017 2011/2015 2016 2017 Prices Paid to Farmers by Elevators Friday, October 27, 2017 Thursday, November 2, 2017 Friday Monday Tuesday Wednesday Thursday Low High Low High Low High Low High Low High $/bushel No. 2 Yellow Soybeans Memphis 9.57-9.65 9.62-9.62 9.57-9.65 9.64-9.64 9.81-9.81 N.W. B.P. 9.50-9.57 9.48-9.57 9.57-9.62 9.61-9.73 9.76-9.79 N.W. TN 9.35-9.48 9.37-9.46 9.38-9.47 9.47-9.57 9.55-9.65 Upper Md. 9.25-9.51 9.24-9.49 9.24-9.55 9.30-9.61 9.30-9.69 Lower Md. 9.40-9.40 9.37-9.38 9.38-9.39 9.41-9.46 9.49-9.54 Yellow Corn Memphis 3.36-3.36 3.36-3.38 3.37-3.39 3.40-3.42 3.42-3.44 N.W. B.P. 3.33-3.37 3.33-3.37 3.35-3.37 3.38-3.40 3.41-3.43 N.W. TN 3.23-3.33 3.21-3.27 3.18-3.24 3.18-3.38 3.20-3.40 Upper Md. 3.08-3.24 3.08-3.24 3.05-3.35 3.08-3.38 3.10-3.40 Lower Md. 3.39-3.63 3.39-3.63 3.36-3.60 3.36-3.63 3.41-3.66 Wheat Memphis 4.02-4.02 3.99-3.99 3.93-3.93 3.93-3.93 4.01-4.01 8
Video Sales & Loads Athens Stockyard - November 1, 2017 1 load of Holstein steers; avg. wt. 960 lbs.; $96.75 1 load of steers; mixed; avg. wt. 745 lbs.; $157.25 East Tennessee Livestock Center - November 1, 2017 1 load out of 100 heifers; est. wt. 610 lbs.; 75% M-1s, 25% M- 2s; medium flesh; $141.50 Browning Livestock - November 1, 2017 1 load of 60 steers; avg. wt. 805 lbs.; $158.00 Hardin County Livestock - November 1, 2017 1 load of 58 steers; avg. wt. 862 lbs.; $152.75 Self-Reported and Self-Graded Livestock Markets Bulls: Under 200 lbs 130.00 200-249 lbs 147.50 250-299 lbs 125.00-142.50 350-399 lbs 140.00 400-449 lbs 120.00-139.00 450-499 lbs 123.00-129.00 500-549 lbs 129.00 550-599 lbs 124.00-130.00 600-699 lbs 99.00-117.00 700-799 lbs 110.00 Self-Reported and Self-Graded Livestock Markets 10/31/17 TN Livestock Producers Fayetteville Receipts: 540 (222 graded & grouped) Steers: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 140.00 300-400 lbs 133.00-146.00 400-500 lbs 140.00-151.00 400-500 lbs 117.00 500-600 lbs 155.00-155.50 500-600 lbs 120.00-129.50 600-700 lbs 127.50-137.00 600-700 lbs 120.00-129.00 700-800 lbs 123.00-135.00 700-800 lbs 114.00-120.00 800-900 lbs 144.50 Bulls: Med & Lg 1-2 400-500 lbs 138.00-145.00 500-600 lbs 132.00-140.00 600-700 lbs 125.00-130.00 700-800 lbs 118.00-121.00 10/31/17 Somerville Livestock Sales Receipts: 173 Steers/Bulls: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 153.00-179.00 300-400 lbs 133.00-155.00 400-500 lbs 145.00-167.00 400-500 lbs 123.00-142.00 500-600 lbs 126.00-137.00 500-600 lbs 115.00-127.00 600-700 lbs 112.00-125.00 600-700 lbs 119.00-120.00 700-800 lbs 117.00 700-800 lbs 121.00 10/30/17 Morris Brothers Stockyard, Pikeville, TN Receipts: 88 Last Week: 58 Last Year: 137 Steers: Heifers: 300-349 lbs 140.00 200-249 lbs 127.50-155.00 400-449 lbs 132.50-140.00 250-299 lbs 125.00 450-499 lbs 138.00 300-349 lbs 122.50-131.00 500-549 lbs 137.00 350-399 lbs 120.00-129.00 600-699 lbs 119.00-134.00 400-449 lbs 126.00-133.00 700-799 lbs 120.00 450-499 lbs 122.00-127.00 Over 799 lbs 88.00-119.00 550-599 lbs 123.00-126.00 600-699 lbs 101.00-122.00 9
Beef Industry News Featured Article from North Dakota State University: Beef Talk The Challenge of Cow Size By Kris Ringwall, Beef Specialist Size has been the common denominator in revenue generation for cow-calf, backgrounding and feedlot operators. The process of raising cattle has been quite steady, with a general acknowledgment that growth is key to success. That is a true statement because calf weight, the product of the cow-calf producer, and carcass weight, the product of the feedlot, drive total dollars. What also is true is that bigger cows producer bigger calves, but the discussion becomes clouded when factoring mature cow size into the discussion. Often, cow size discussions open debate rather than offer further understanding of the issue. Dollars generated as take-home pay depend on net return above expenses, labor and management and, ultimately, offer a return on assets, which are not totally driven by the physical growth of the calf. The challenge is realizing that this issue has three distinct players: the cow, the bull and the calf, which have grown in physical size. The impact on the maternal and paternal animals and progeny is simply larger cattle. Calf growth, at least among those harvested, is a function of time. Bulls are selected to produce progeny that fit market specifications, so mission accomplished. The same is true for the cows, except herds have more cows and they must be maintained year-around. The cow is the progenitor and the caregiver for the progeny, which means she carries the bulk of the expenses. As a result, cost control and production efficiency must come from the cow. Heifers (future cows) are a byproduct of a very fine-tuned steer production system. Thus the dilemma: How are the cows replaced and appropriately sized if they are simply the counterpart of fast-growing steers? Producers need to be cognizant as expenses creep upward while trying to maintain an ever-increasing size of the maternal unit, the cow. The solution is finding moderately sized cows that produce steers that meet current market desires and specifications. Simply put, cattle are not near their maximum capacity for growth and mature size. Cattle simply will keep getting bigger. Somewhere, producers must implement breeding systems that will develop cattle that moderate maternal growth. Let s focus on 300 pounds of cow rather than the actual size of the cow. So regardless of the size of a cow, the issue for the day is 300 pounds of cow weight. What does that mean, and how does 300 pounds of additional cow weight impact beef production? The Dickinson Research Extension Center has focused on two cow herds that differ in mature weight by 300 pounds. The numbers are not exact, but the principle is there. Let s just say, as a beef producer, one can decide to add or subtract 300 pounds to the mature weight of the cow herd. What s the impact? For the past three years, the center has been feeding heifers individually to get a handle on the difference between the calves from large-framed cows and smallerframed cows. The heifers daily diets have been the same. Essentially, the heifers have been eating approximately 2.2 percent of their body weight, so let s assume these heifers will continue to eat 2.2 percent of their body weight for their productive lives. Feed consumption will change through time, but again, let s not get lost in the decimal places; the point is 300 pounds of mature weight. So the extra 300 pounds times 2.2 percent is 6.6 pounds of feed per day. In a year, 6.6 pounds times 365 days means 2,409 pounds of feed may be consumed to sustain the extra 300 pounds of mature cow weight. Let s review the two cow sizes at the center. Based on total cow weight, a 1,400-pound cow would consume 30.8 pounds a day, or 11,242 pounds per year. In four years, the cow would have consumed 44,968 pounds of feed. The 1,100-pound cow would have consumed 24.2 pounds per day, or 8,833 pounds per year. In four years, the cow would have consumed 35,332 pounds of feed, or 9,636 pounds less than the 1,400-pound cow. That 9,636 pounds of feed directly relates to the 9,636 pounds of extra feed needed to add 300 pounds of mature weight to a cow. In simple terms, reducing cow size 300 pounds saves enough feed to support one additional cow for four years. Let me repeat: If the center has 44,968 pounds of feed, the producer could feed four 1,400-pound cows or five 1,100-pound cows. By lowering cow size 300 pounds, a producer can support an extra cow with roughly the same amount of feed every four years. Yes, cattle growth is important, but controlling expenses is as well. The actual size of cow is not as critical as the concept of simply lowering cow weight to lower expenses. At the same time, those 20 percent more cows will offer 20 percent more calves, the real benefit of trying to lower cow size within a herd. What is the right cow size? The answer will vary, but think about it. The impact is real. May you find all your ear tags. Department of Agricultural and Resource Economics 314 Morgan Hall 2621 Morgan Circle arec.tennessee.edu USDA / Tennessee Department of Agriculture Market News Service http://www.tennessee.gov/agriculture/article/ag-farms-market-news 1-800-342-8206 10