Cow-Calf Corner • The Newsletter, March 21, 2022
Monday, March 21, 2022
Feeder Cattle Markets in Transition
Derrell S. Peel, Oklahoma State University Extension Livestock Market Specialist
Feeder cattle auction prices recovered some last week as Live and Feeder futures increased from the lows following the outbreak of war in the Ukraine. The pre-war highs in February may be the seasonal spring peak in calf and stocker prices, although another run at spring peaks could happen in the next month. Moreover, a strong uptrend in feeder prices is reflected in Feeder futures prices at this time, which may offset typical seasonal patterns.
Feeder cattle markets have been in transition for several months and more transition is ahead. Since November, prices for feeder cattle weighing up to 600 pounds have increased roughly ten percent, while prices for feeders over 800 pounds are currently about six percent lower. Using current prices, it would appear that the value of stocker gain has dropped dramatically since last fall. For example, in mid-November, the value of 300 pounds of gain from 500 to 800 pound steers calculated out to $1.24/lb., roughly in line with the increase in feedlot cost of gain in 2021. However, current Oklahoma auction prices suggest that the value of 300 pounds of gain from 500 to 800 pounds has dropped to about $0.73/lb. This seems to fly in the face of high feed prices and increasing feedlot cost of gain. This value of gain makes no sense and would certainly make summer stockers very unattractive.
However, current prices do not capture the transition currently under way in feeder markets. The current price for August Feeder futures is about $181/cwt., compared to about $158/cwt. for the nearby March. The August futures price would suggest an Oklahoma cash price for 800-pound steers of $179-$180/cwt. in August, well above the current price of $159/cwt. In that case, the value of 300 pounds of gain from April to August is roughly $1.45/lb.
There is even more transition implied in feeder cattle markets. Running the current August Feeder futures price for 800 pound steers though a feedlot budget finishing in January 2023 results in a fed breakeven price of $162-$165/cwt. depending on the feedlot cost of gain. Current Live futures for February 2023 are at roughly $153/cwt. These discrepancies suggest that more transition is yet to come. Either the Feeder futures are too high or the Live futures are too low, or perhaps some of both. The take-home message is that imbalances in feeder markets and between feeder and fed markets likely mean more transition as markets rebalance. Markets are volatile and likely to remain so. Cattle producers at all levels may see opportunities to price cattle or lock in margins but markets are expected to continue to be very dynamic and such opportunities may be fleeting.
Dr. Derrell Peel’s overview of the market situation and its affect on both producers and consumers on SunUpTV.
The Impact of Bull Selection – Part 2
Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist
Last week I left you with the question: Which bull transmits more profit potential to this operation? Before the answer, a brief recap of the example: In a herd using bulls as rotational sires, selecting the best 20% of heifers to develop as replacements, and selling all other calves at weaning, with the following levels performance:
- 1,400 pound average mature cow weight
- 85% pregnancy rate
- 82% calf crop weaned
- Average weaning weight 500 pounds
- Pounds of Calf Weaned/Exposed Female = 410
This data indicates that improving the Pounds of Calf Weaned/Exposed Female on a whole herd basis results in more profit potential of this operation.
Average genetic values of five bulls that sired the existing cowherd:
WW HP Milk
Average: 71 9 20 88
Now we consider the genetic values of two new potential herd bulls.
New Herd Bull 1 71 15 20 68
New Herd Bull 2 101 9 20 122
What should we expect if we fast forward 5 – 6 years?
If we select Bull 1
- 1,380 pound average mature cow size
- 91% pregnancy rate
- 88% calf crop weaned
- Average weaning weight 500 pounds
- Pounds of Calf Weaned/Exposed Female = 440
If we select Bull 2
- 1,434 pound average mature cow size
- 85% pregnancy rate
- 82% calf crop weaned
- Average weaning weight 530 pounds
- Pounds of Calf Weaned/Exposed Female = 434.6
So if this was a 100 cow operation, by the next generation:
If we select new sire 1, we would be selling 79 weaned calves (44 steers & 35 hfrs) at 500 pounds = 39,500 pounds of weaning pay weight
If we used new sire 2, we would be selling 74 weaned calves (41 steers & 33 hfrs) at 530 pounds = 39,220 pounds of weaning pay weight
Furthermore, the lighter weight calves would be worth more $/pound, and 1,380 pound cows would cost less in feed and maintenance than 1,434 pound cows.
Bull 1, because of the genetic potential to improve fertility, reduce mature cow size and maintain the current level of weaning growth, adds more profit potential to the operation.
Dr. Mark Johnson discusses weighing genetic options when selecting a bull on SunUpTV.
Control and Prevention of Wheat Pasture Bloat
Paul Beck, Oklahoma State University Extension Beef Cattle Nutrition Specialist
Wheat and other small grain pastures have been short due to lack of rain this winter, but recent rains have really given them a boost. When growing conditions improve with warmer temperatures and rain, forage growth comes on rapidly. Rapidly growing small grain forage can lead to bloat of grazing cattle. The rapid onset of wheat pasture bloat and the short time window from the occurrence of initial symptoms and death may be the scariest part of this disease. Bloat can be an issue on wheat pasture and other small grain pastures, but also legume pastures such as white and Persian clover or alfalfa and can impact both calves or mature cows. Bloat can occur as soon as 1 to 3 hours after cattle have been put on wheat pasture. Death losses in bloat provocative pastures have been reported to be as high as 15 to 20% of cattle on a pasture. Lost production from subclinical bloat may actually be greater than producers realize, so prevention is a key to profitable wheat grazing.
There are several grazing management alternatives that can be used to decrease the incidence of bloat. Because this is a bigger issue for cattle that are able to consume large amounts of these high-quality forages in a short period of time, over stocking cattle on pastures to a point that forage intake is limited can decrease bloat. Alternatively, where rotational grazing is used, cattle can be placed on pastures after the forages have accumulated sufficient growth and maturity to increase the fiber content of the forages can also limit bloat.
Research conducted in Oklahoma and New Mexico indicates that the ionophore monensin decreases the incidence and severity of bloat for calves grazing wheat pasture by 40 to 60%, decreasing the lethality and improving the ability to respond to the problem. Even though monensin decreases frothy bloat on pastures, it does not eliminate the issue altogether. Poloxalene (Bloatguard) is a surfactant and works to disrupt the froth. Poloxalene has been proven to be a more effective remedy for frothy bloat than monensin, but does not have the performance enhancing benefits of monensin. If poloxalene is fed only during the period that forages are most bloat provocative then the total cost of bloat control can be covered by the prevention of the loss of a single animal. As a management strategy, producers should consider using monensin until there is a confirmed bloat issue then switching to poloxalene once cattle show clinical signs of bloat.
Bloat can be serious issue with rapidly growing forages in the early spring. Keep an eye on cattle and be ready to react rapidly or death losses can quickly build up.
A classic SunUp from March 6, 2018, Dr Gerald Horn discusses wheat pasture research and bloat prevention.