Tennessee Market Highlights April 21, 2017 Number: 16 Trends for the Week Compared to a Week Ago Slaughter Cows $1 to $2 lower Slaughter Bulls $1 to $2 lower Feeder Steers $1 to $4 higher Feeder Heifers $1 to $4 higher Feeder Cattle Index Wednesday s index: 137.65 Fed Cattle The 5-area live price of $131.62 is up $3.50. The dressed price is up $3.88 at $209.22. Corn May closed at $3.57 a bushel, down 14 cents since last Friday. Soybeans May closed at $9.51 a bushel, down 4 cents since last Friday. Wheat May closed at $4.05 a bushel, down 24 cents since last Friday. Cotton May closed at 78.99 cents per lb, up 3.37 cents since last Friday. Livestock Comments by Dr. Andrew P. Griffith FED CATTLE: Fed cattle traded $2 to $4 higher on a live basis compared to last week. Prices on a live basis were mainly $130 to $132 while dressed prices were mainly $210 to $212. The 5-area weighted average prices thru Thursday were $131.62 live, up $3.50 from last week and $209.22 dressed, up $3.88 from a week ago. A year ago prices were $125.58 live and $205.36 dressed. It has been 22 months (week ending June 21, 2015) since the 5-area weekly weighted average price exceeded year ago prices from the same week, but it is sure to have happened this week. Fed cattle continued their price ascension as cattle feeders have not let off the gas. The price increase this week keeps cash trade at a premium to futures prices as traders have been reluctant to fully close the gap. Additionally, the June live cattle contract continues to trade at a $13 to $15 discount to this week s cash prices which means there is a lot of distance to cover to reach convergence. Fed cattle prices are certain to soften heading into late May and early June, but it is difficult to fathom a $15 price break in finished cattle over the next two months. BEEF CUTOUT: At midday Friday, the Choice cutout was $217.69 up $1.97 from Thursday and up $5.65 from last Friday. The Select cutout was $204.06 up $0.49 from Thursday and up $4.95 from last Friday. The Choice Select spread was $13.63 compared to $12.93 a week ago. Wholesale beef prices continue to strengthen with all eyes on the Choice boxes. Beef industry participants will be focused on Choice quality meat as the Lenten season and Easter are a distant memory for the meat industry as a whole. As the market moves toward the summer grilling season, Choice middle meats will be the primary supporter of box prices, but lean grinding beef will also be in high demand. The stronger wholesale beef prices the past couple of months have resulted in slight increases at the retail level. The all fresh retail beef price for March was $552.20 per hundredweight which was an increase of $2.70 from February. Though prices inched forward in March, they were still $31.50 lower than March 2016. Similarly, the Choice retail beef price increased $6.40 per hundredweight to $590.40 from February to March, but the March 2017 prices lags the March 2016 price by $31.90. The retail price of beef for April will likely continue to show higher prices, but higher prices will be tempered as the market moves into the summer months. OUTLOOK: Feeder cattle future prices have advanced $13 to $18 in a seven week period. Higher prices on the futures market is a function of several factors including a strong and steady live cattle cash price, strong slaughter numbers, lighter finished cattle carcass weights, inexpensive feed, and pen space cattle feeders are looking to fill. Though all the aforementioned factors contribute to higher feeder cattle prices, these conditions have been part of the marketplace for several months. The stronger prices for feeder cattle today is more a factor of the market realigning itself with where it should have been months earlier. In other words, it is a price correction. For several months, deferred live cattle futures have traded at severe discounts to the nearby contract and cash trade. The discounts in future months forces feedlot managers to be cautious with prices paid for current month placements. However, feedlot managers appear to be cautiously optimistic concerning finished cattle prices in the future. Cash prices of finished cattle have remained strong all year which has forced live cattle futures to play catch up each time a new contract rolls into the nearby position. With that being said, cattle feeders have slowly and steadily pushed feeder cattle prices higher the past couple of months as they expect finished cattle prices to exceed the expectations of the (Continued on page 2)
Livestock Comments by Dr. Andrew Griffith (Continued from page 1) futures market this summer and fall. Producers with inventory to market should consider marketing inventory in the near term if at all possible. It would not be unprecedented for prices to continue to escalate. However, it will become more difficult for feeder cattle prices to continue the price ascension unless finished cattle prices continue to escalate. Stocker producers should stay tuned to market reports heading into the summer. Summer usually offers some buying opportunities on lightweight calves that can be grazed on summer annuals or warm season perennials. The April cattle on feed report for feedlots with a 1000 head or more capacity indicated cattle and calves on feed as of April 1, 2017 totaled 10.90 million head, unchanged from a year ago, with the pre-report estimate average expecting a decrease of 0.3%. March placements in feedlots totaled 2.10 million head, up 11.1% from a year ago with the pre-report estimate average expecting placements up 6.0%. March marketing s totaled 1.91 million head up 9.6% from 2016 which corresponds closely with pre-report estimates. Placements on feed by weight: under 700 pounds up 2.9%, 700 to 799 pounds up 26.5%, 800 pounds and over up 8.0%. FRIDAY S FUTURES MARKET CLOSING PRICES: Friday s closing prices were as follows: Live/fed cattle April $129.80 +0.18; June $116.70 +0.23; August $112.78-0.03; Feeder cattle April $138.55 +0.65 May $139.25-0.50; August $142.25-0.20; September $142.33-0.10; May corn closed at $3.57 down $0.01 from Thursday. ASK ANDREW, TN THINK TANK: The two most common questions directed toward livestock economists with a focus on marketing, what are prices going to be, and what is a bred heifer worth? No answer will be supplied in this short section today, but there will be an answer supplied at an educational program addressing heifer development. University of Tennessee Extension in Marshall County is hosting a beef heifer development school on May 4th from 10:00 am to 4:00 pm at the Dairy Research and Education Center in Lewisburg, TN. The school will include talks concerning forage, nutrition, health, reproduction, and economics. This is a one stop shop for heifer development information as well as information related to managing a custom heifer development operation. For additional information, please contact Matt Webb (dwebb15@utk.edu, (931)359-1929). 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. Milk Futures Thursday April 20, 2017 Month Class III Close Class IV Close Apr 15.18 13.95 May 15.33 14.07 Jun 15.54 14.23 Jul 15.94 14.45 Aug 16.35 14.69 Average Daily Slaughter Cattle Hogs Number of head This week (4 days) 113,750 407,000 Last week (4 days) 115,000 443,250 Year ago (4 days) 110,500 432,750 This week as percentage of Week ago (%) 99% 92% Year ago (%) 103% 94% USDA Box Beef Cutout Value Choice 1-3 600-900 lbs Select 1-3 600-900 lbs $/cwt - Thursday 215.72 203.57 Last Week 210.67 198.76 Year ago 222.77 212.96 Change from week ago +5.05 +4.81 Change from year ago -7.05-9.39 2
Crop Comments by Dr. Aaron Smith have been planted to date. Overview Corn, soybeans, and wheat were down; cotton was up for the week. Corn and wheat tumbled this week due to favorable weather conditions and increased projected global supplies. Weather forecasts for April-May provide no major concerns that would disrupt planting across most of the Corn Belt. The USDA estimated that over ¼ of the projected corn acres in Tennessee November soybean prices have moved mostly sideways ($9.40 to $9.65) since the beginning of April after steep ($10.20 to $9.50) declines in March. Weekly soybean export sales have tapered off as foreign buyers have turned to the record South American crop as for supply. Planting conditions will be closely monitored by soybean markets as most believe that good planting conditions early in the season translate into increased corn acreage, potentially to the detriment of soybean acreage. The July cotton contract continues to flirt with the 80 cent range. For the last three months cotton continues to approach, and marginally exceed, 80 cents, however at present the market has been unable to sustain 80 cents for more than a couple of trading days. Three plus trading days above 80 cents could see a short term move into the 82-84 cent range. December cotton has traded between 72 and 76 cents since February 2nd. July wheat dropped below $4.20 on Friday before rebounding to $4.21 at the close of the day. Wheat prices will likely establish a bottom in the next 1-2 months; however a substantial rebound in prices remains unlikely due to abundant global supplies and price completion from the Black Sea Region. Corn May 2017 corn futures closed at $3.57 down 14 cents since last Friday. For the week, May 2017 corn futures traded between $3.54 and $3.72. Across Tennessee, average basis (cash price-nearby futures price) strengthened or remained unchanged at Memphis, Northwest Barge Points, Northwest, Lower-middle, and Upper-middle Tennessee. Overall, basis for the week ranged from 6 under to 29 over the May futures contract with an average of 6 over at the end of the week. Corn net sales reported by exporters from April 7-13 were above expectations with net sales of 29.8 million bushels for the 2016/17 marketing year and 3.6 million bushels for the 2017/18 marketing year. Exports for the same time period were up from last week at 52.4 million bushels. Corn export sales and commitments were 89% of the USDA estimated total annual exports for the 2016/17 marketing year (September 1 to August 31) compared to a 5-year average of 86%. Ethanol production for the week ending April 14 was 0.993 million barrels per day down 7,000 from last week. Ethanol stocks were 23.034 million barrels, up131,000 barrels. May/Jul and May/Dec future spreads were 6 and 25 cents, respectively. July 2017 corn futures closed at $3.63 down 15 cents since last Friday. Nationally, the Crop Progress report estimated corn planted at 6% compared to 3% last week, 12% last year, and a 5-year average of 9%. In Tennessee, the Crop Progress report estimated corn planted at 26% compared to 7% last week, 32% last year, and a 5- year average of 30%. In Tennessee, September 2017 cash forward contracts averaged $3.66 with a range of $3.37 to $3.91. December 2017 corn futures closed at $3.82 down 12 cents since last Friday. Downside price protection could be obtained by purchasing a $3.90 December 2017 Put Option costing 32 cents establishing a $3.58 futures floor. Soybeans May 2017 soybean futures closed at $9.51 down 4 cents since last Friday. For the week, May 2017 soybean futures traded between $9.39 and $9.62. Average soybean basis strengthened or remained unchanged at Memphis, Northwest Barge Points, and 3 (Continued on page 4)
Crop Comments by Dr. Aaron Smith Northwest Tennessee and weakened at Upper-middle and Lower-middle Tennessee. Basis ranged from 36 under to 7 over the May futures contract at elevators and barge points. Average basis at the end of the week was 13 under the May futures contract. Net sales reported by exporters were below expectations with net sales of 7.8 million bushels for the 2016/17 marketing year and 0.5 million bushels for the 2017/18 marketing year. Exports for the same period were down from last week at 15.8 million bushels. Soybean export sales and commitments were 101% of the USDA estimated total annual exports for the 2016/17 marketing year (September 1 to August 31), compared to a 5-year average of 95%. May soybean-to-corn futures price ratio was 2.66 at the end of the week. May/Jul and May/Nov future spreads were 9 cents and 8 cents, respectively. July 2017 soybean futures closed at $9.60 down 6 cents since last Friday. In Tennessee, October / November 2017 soybean cash contracts average $9.44 with a range of $9.14 to $9.64. November/ December 2017 soybean-to-corn price ratio was 2.51 at the end of the week. November 2017 soybean futures closed at $9.59 down 2 cents since last Friday. Downside price protection could be achieved by purchasing a $9.60 November 2017 Put Option which would cost 50 cents and set a $9.10 futures floor. Cotton May 2017 cotton futures closed at 78.99 cents up 3.37 cents since last Friday. For the week, May 2017 cotton futures traded between 75.18 and 80.67 cents. Delta upland cotton spot price quotes for April 19 were 75.82 cents/lb (41-4-34) and 77.07 cents/lb (31-3-35). Adjusted world price (AWP) increased 2.26 cents to 68.97 cents per pound. Net sales reported by exporters were down from last week with net sales of 226,300 bales for the 2016/17 marketing year and 117,100 bales for the 2017/18 marketing year. Exports for the same period were down from last week at 358,700 bales. Upland cotton export sales were 101% of the USDA estimated total annual exports for the 2016/17 marketing year (August 1 to July 31), compared to a 5-year average of 95%. July 2017 cotton futures closed at 79.33 up 2.79 cents since last Friday. May/Jul and May/Dec cotton futures spreads were 0.34 cents and - 4.03 cents, respectively. Nationally, the Crop Progress report estimated cotton planted at 8% compared to 6% last week, 7% last year, and a 5-year average of 9%. December 2017 cotton futures closed at 74.96 up 1.54 cents since last Friday. Downside price protection could be obtained by purchasing a 75 cent December 2017 Put Option costing 3.95 cents establishing a 71.05 cent futures floor. 4 (Continued on page 5)
Crop Comments by Dr. Aaron Smith Wheat May 2017 wheat futures closed at $4.05 down 24 cents since last Friday. May 2017 wheat futures traded between $4.00 and $4.31 this week. May wheat-to-corn price ratio was 1.13.Wheat net sales reported by exporters were within expectations with net sales of 15.2 million bushels for the 2016/17 marketing year and 5.0 million bushels for the 2017/18 marketing year. Exports for the week were up from last week at 27.2 million bushels. Wheat export sales were 100% of the USDA estimated total annual exports for the 2016/17 marketing year (June 1 to May 31), compared to a 5-year average of 101%. In Memphis, old crop cash wheat ranged from $4.26 to $4.42. May/Jul and May/Sep future spreads were 16 cents and 30 cents, respectively. Nationally, the Crop Progress report estimated winter wheat condition at 54% good-to-excellent and 13% poor-to-very-poor; winter wheat headed at 19% compared to 9% last week, 11% last year, and a 5-year average of 13%; and spring wheat planted at 13% compared to 9% last week, 31% last year, and a 5-year average of 21%. In Tennessee, winter wheat condition was reported at 52% good-to-excellent and 15% poor-to-very poor; winter wheat jointed at 88% compared to 77% last week, 68% last year, and a 5-year average of 66%; and winter wheat headed at 34% compared to 7% last week and 2% last year. In Tennessee, June/July 2017 cash wheat ranged from $4.01 to $4.62. July 2017 wheat futures closed at $4.21 down 21 cents from last Friday. Downside price protection could be obtained by purchasing a $4.25 July 2017 Put Option costing 18 cents establishing a $4.07 futures floor. July 2017 wheat-to-corn price ratio was 1.16. September 2017 wheat futures closed at $4.35 down 20 cents since last Friday. Additional Information: If you would like further information or clarification on topics discussed in the crop comments section or would like to be added to our free email list please contact me at aaron.smith@utk.edu. 5
Futures Settlement Prices: Crops & Livestock Friday, April 14, 2017 Thursday, April 20, 2017 Commodity Contract Month Friday Monday Tuesday Wednesday Thursday Soybeans May 9.53 9.46 9.50 9.46 ($/bushel) Jul 9.63 9.56 9.60 9.56 Aug 9.65 9.58 9.62 9.58 Sep 9.63 9.57 9.59 9.55 Nov 9.62 9.56 9.58 9.53 Jan 9.68 9.64 9.65 9.61 Corn May 3.66 3.61 3.61 3.57 ($/bushel) Jul 3.73 3.68 3.68 3.64 Sep 3.80 3.75 3.75 3.71 Dec 3.90 3.86 3.86 3.82 Mar 3.99 3.96 3.96 3.92 May 4.05 4.02 4.01 3.98 Wheat May 4.21 4.22 4.19 4.06 ($/bushel) Jul 4.35 4.37 4.34 4.21 Sep 4.49 4.50 4.48 4.36 Dec 4.70 4.72 4.70 4.59 Mar 4.87 4.89 4.88 4.77 Soybean Meal May 313 312 310 307 ($/ton) Jul 317 316 315 311 Aug 318 317 316 312 Sep 318 317 316 313 Oct 316 316 315 312 Dec 317 317 316 313 Cotton May 77.03 76.82 77.67 80.07 ( /lb) Jul 78.17 78.16 78.32 79.11 Oct 73.50 73.95 74.08 74.63 Dec 74.24 74.41 74.46 74.86 Mar 74.15 74.22 74.29 74.55 Live Cattle Apr 126.42 126.77 127.92 129.62 ($/cwt) Jun 115.57 115.65 115.95 116.47 Aug 111.55 111.82 112.27 112.80 Oct 110.82 110.95 111.32 111.60 Dec 111.62 111.72 112.02 112.17 Feeder Cattle Apr 139.05 138.67 138.67 137.90 ($/cwt) May 140.15 140.07 140.32 139.75 Aug 142.22 142.17 142.95 142.45 Sep 142.40 142.27 142.82 142.42 Oct 141.62 141.42 141.75 141.62 Nov 139.82 139.72 140.15 140.02 Market Hogs Apr 61.97 61.97 62.12 ($/cwt) May 67.72 67.15 65.87 63.80 Jun 72.35 71.50 69.95 68.67 Jul 73.35 72.90 71.50 70.17 Aug 73.62 73.40 71.80 70.60 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 145.00 185.00 164.09 167.38 180.07 400-500 lbs 147.50 171.00 159.03 157.83 169.56 500-600 lbs 138.50 163.00 148.25 146.72 160.54 600-700 lbs 128.50 149.00 140.61 137.71 147.12 700-800 lbs 121.00 138.00 129.91 127.32 137.68 Steers: Small Frame #1-2 300-400 lbs 125.00 160.00 147.15 149.06 159.44 400-500 lbs 142.50 150.00 146.32 143.11 146.78 500-600 lbs 119.00 140.00 125.93 133.07 600-700 lbs Steers: Medium/Large Frame #2-3 300-400 lbs 130.00 169.00 151.69 154.01 172.21 400-500 lbs 126.00 157.00 144.50 143.84 157.89 500-600 lbs 120.00 150.00 133.71 135.58 145.88 600-700 lbs 118.00 137.50 128.58 125.90 134.51 700-800 lbs 115.00 121.00 117.98 109.37 121.84 Holstein Steers 300-400 lbs 92.00 117.00 104.50 144.00 500-600 lbs 93.00 93.00 93.00 700-800 lbs 65.00 81.00 70.02 Slaughter Cows & Bulls Breakers 75-80% 55.00 66.00 60.05 61.57 73.11 Boners 80-85% 56.00 69.00 62.86 64.15 76.06 Lean 85-90% 44.00 69.50 57.58 58.31 70.07 Bulls YG 1 76.50 96.50 87.58 89.01 97.57 Heifers: Medium/Large Frame #1-2 300-400 lbs 130.00 167.50 145.75 147.81 160.91 400-500 lbs 128.00 154.00 137.96 138.45 150.61 500-600 lbs 119.00 145.00 131.55 129.68 142.55 600-700 lbs 111.50 147.00 123.37 119.31 130.79 Heifers: Small Frame #1-2 Prices on Tennessee Reported Livestock Auctions for the week ending April 21, 2017 300-400 lbs 129.31 123.37 400-500 lbs 126.66 125.61 500-600 lbs 114.13 123.56 600-700 lbs Heifers: Medium/Large Frame #2-3 300-400 lbs 125.00 160.00 138.07 136.04 148.49 400-500 lbs 110.00 140.00 125.96 127.90 141.54 500-600 lbs 101.50 132.50 120.38 119.30 134.07 600-700 lbs 97.00 117.00 109.40 107.01 126.34 Cattle Receipts: This week: 5,293 (8) Week ago: 6,491 (8) Year ago: 8,544 (11) 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 260 240 220 200 180 160 140 120 100 225 205 185 165 145 125 105 85 2011/2015 Avg 2016 2017 2011/2015 Avg 2016 2017 175 165 155 145 135 125 115 105 95 85 5-Area Finished Cattle Prices 2015, 2016 and 5-year average 115 105 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, April 14, 2017 Thursday, April 20, 2017 Friday Monday Tuesday Wednesday Thursday Low High Low High Low High Low High Low High $/bushel No. 2 Yellow Soybeans Memphis 9.48-9.53 9.46-9.48 9.50-9.52 9.46-9.48 N.W. B.P. 9.44-9.51 9.41-9.49 9.45-9.52 9.41-9.54 N.W. TN 9.18-9.20 9.11-9.13 9.15-9.17 9.11-9.14 Upper Md. 9.32-9.38 9.26-9.31 9.30-9.35 9.26-9.31 Lower Md. 9.23-9.38 9.16-9.31 9.20-9.35 9.17-9.31 Yellow Corn Memphis 3.76-3.76 3.71-3.71 3.71-3.71 3.67-3.67 N.W. B.P. 3.66-3.76 3.66-3.71 3.66-3.71 3.62-3.67 N.W. TN 3.61-3.67 3.56-3.62 3.56-3.62 3.52-3.58 Upper Md. 3.66-3.66 3.61-3.61 3.61-3.66 3.57-3.62 Lower Md. 3.84-3.96 3.79-3.91 3.79-3.91 3.75-3.87 Wheat Memphis 4.36-4.36 4.42-4.42 4.39-4.39 4.26-4.26 8
Self-Reported and Self-Graded Sales Self-Reported and Self-Graded Sales 4/18/17 TN Livestock Producers Fayetteville Receipts: 460 (266 graded & grouped) Steers: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 155.00-168.00 300-400 lbs 140.00-149.00 400-500 lbs 157.00-164.00 400-500 lbs 134.00-138.50 500-600 lbs 154.50-161.50 500-600 lbs 120.00-128.00 600-700 lbs 134.50-147.00 600-700 lbs 112.00-120.00 700-800 lbs 132.50-133.00 700-800 lbs 117.50-120.50 Bulls: Med & Lg 1-2 400-500 lbs 147.50-155.00 500-600 lbs 147.00-153.00 600-700 lbs 138.00 4/18/17 Somerville Livestock Sales Receipts: 244 Steers/Bulls: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 144.00-167.00 300-400 lbs 122.00-150.00 400-500 lbs 133.00-155.00 400-500 lbs 132.00-142.00 500-600 lbs 128.00-145.00 500-600 lbs 123.00-135.00 600-700 lbs 119.00-133.00 600-700 lbs 111.00-122.00 700-800 lbs 109.00 700-800 lbs 122.00 Value Added Value Added Steers/Bulls: Med & Lg 1-2 Heifers: Med & Lg 1-2 550-600 lbs 145.00 700-800 lbs 122.00 600-700 lbs 133.00 9
Beef Industry News Featured Article from North Dakota State University BeefTalk: Improper Grazing Steals From the Future By Kris Ringwall, Beef Specialist NDSU Extension Service Proper cattle management means proper pasture management. Correct pasture stocking rates and grazing plans are essential for the short run and the long-term survival of a beef operation. Producers have many approaches to grazing systems. The key point is to have a plan because improper grazing steals from the future. Simply utilizing grass or forage of any type on a production whim is a mistake. Minor stocking rate adjustments are all right because of above-normal or below-normal precipitation. Adjustments need to be minor, and even the adjustments need to be options within the plan. Cattle allotments and pasture assignments are being planned for the pastures the Dickinson Research Extension Center (DREC) manages. Beef producers should be doing the same for their summer grazing units. The basic grazing system should not change from year to year. Keeping up and monitoring the system is important. Let s look at an example. This year, one unit the center manages has not had a consistent annual grazing plan. That s because the center has not always managed the unit. Now that the center again is managing the unit, the question is, How many cow-calf pairs should the center stock within a re-implemented twiceover grazing system? This is not lean on the gate and guess but rather an answerable question. As with any grazing unit, stock conservatively at the start and plan for stocking rate adjustments as the grassland or forage base improves. What numbers do you use? Begin by consulting a grazing expert. In the center s case, Lee Manske is the DREC range specialist, so we have good advice. For producers, start with a visit with the neighbors, the local county office of the Extension Service and the Natural Resource Conservation Service office. For the unit in question, Manske reviewed ecological site maps and determined the unit has a stocking rate of 1.92 acres per animal unit month (AUM), or 790 AUMs of forage for the 1,519 acres of pasturelands. This information gives us what we need to know. The grazing system is 4.5 months, early June to mid-october. The 790 AUMs are divided by 4.5 months (or actual days) to determine the actual number of animal units available. Dividing by the number of months or days of grazing spreads the total AUMs over the full grazing season. In this case, 175 (790 divided by 4.5) animal units are needed to graze for 4.5 months. An animal unit is defined as a 1,000-pound cow plus the calf, so one could say 175 cow-calf pairs with the cows weighing 1,000 pounds each. In this case, 175 1,000-pound cows could be anticipated for a total herd weight of 175,000 (175 times 1,000) pounds. Not all cows weigh 1,000 pounds, so now an adjustment is made for the actual average weight of the cows that are going to graze. The average weight of the cows is critical for proper AUM stocking and percentage of utilization. The center s cows average 1,462 pounds, so the center could stock 120 (175,000 divided by 1,462) cow-calf pairs on this grazing unit. Then, each producer needs to predetermine the percentage of utilization desired. Pastures in poor shape require lower utilization, with the anticipation of greater utilization in future years as the pasture improves. The goal is 100 percent utilization of the calculated AUMs available through a proper grazing system. For the center and this grazing unit, the plan is to stock at only 65 percent of the previously calculated full stocking rate. That would be almost 114,000 (175,000 times 65 percent) pounds of cattle in early June. So, at the desired percentage of utilization, the center could stock 78 (114,000 divided by 1,462) cow-calf pairs. That is lots of math, but the answer is to know what is proper for this point in time to achieve the desired grazing outcome. If the center continues to manage this unit, the goal is to approach 120 pairs gradually. The point is that the unloading of cattle at a pasture gate is not a lean on the gate decision. Perhaps one wonders why weather is so often the first thing in a conversation, but once one appreciates weather impacts, one understands why we start the day with the weather news. In the ranching community, weather is serious and, even though ranchers cannot control Mother Nature, plans can be developed and put in place to accommodate the weather. Beef operations with effective grazing systems in place are in a position to manage through drought and wet times without upsetting the focused direction of the ranch operation. I cannot tell a producer how the summer is going to turn out. I can tell anyone that the cattle will have grass, the cows will re-breed and the calves will gain well because the center has a plan that supports long-term grass production. No one at the center will panic; they ll just have options if needed. Develop a plan and stick to it. Department of Agricultural and Resource Economics 314 Morgan Hall 2621 Morgan Circle http://economics.ag.utk.edu/ http://economics.ag.utk.edu/curmkt.html USDA / Tennessee Department of Agriculture Market News Service http://www.tennessee.gov/agriculture/marketing/marketnews.html 1-800-342-8206 10