Cattle Industry Dynamics Finally Lining Up

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

 

The latest Cattle on Feed report pegs November 1 feedlot inventory at 11.706 million head, 98.0 percent of last year and the second consecutive monthly year over year decrease.  The 12-month moving average of feedlot totals, which shows the average feedlot total for the previous year, peaked in September 2022 (Table 1).  Feedlot inventories are expected to decrease year over year for the foreseeable future.  Table 1 shows how cattle industry dynamics have developed since the last cyclical peak, with peak totals for each category underlined.  The peak average cow herd and calf crop occurred in 2018 with the peak feeder supply noted on January 1, 2019. 

 

Table 1. Cattle Industry Dynamics, 2018-2022.

*(Jant+Jant+1)/2; ^Projected; ~July 1 estimate; **January 1 estimate; All numbers in 1000 head.

 

The combination of effects from the pandemic in 2020 and drought since 2020 has pushed the peak in feedlot numbers and cattle slaughter into 2022, well past the cyclical peak in the calf crop in 2018.  The pandemic in 2020 caused a backlog of cattle in feedlots and in the country.  As a result, the estimated feeder supply on January 1, 2021 was higher than 2020. The drought in 2021 and 2020 caused cattle to be marketed earlier than usual and resulted in reduced heifer retention and increased heifer and cow slaughter in 2021 and 2022.  Early marketing of cattle, reduced heifer retention and herd liquidation have kept feedlot inventories higher in 2022 and temporarily increased beef production. Beef production is projected at a record large 28.4 billion pounds in 2022 as a result of the highest total cattle slaughter in 15 to 20 years.  

 

As 2022 comes to a close, it appears that feedlot inventories have peaked and cattle slaughter should begin to decline in the next few months.  On October 1, 2022, the inventory of heifers in feedlots was higher than the previous year, with the heifer percentage of total feedlot inventories the highest in 21 years.  The number of heifers in feedlots should begin to decline and will drop sharply when herd rebuilding begins.  Feedlot inventories are beginning to reflect the fact that feeder cattle supplies have been declining since 2019.  

 

With drought conditions continuing, it is unclear when herd liquidation will cease and herd rebuilding can begin.  However, it is clear that feedlot production, cattle slaughter beef production will fall in 2023.  How much they will fall depends on when drought conditions will improve.  Nevertheless, declining feedlot supplies mean that all levels of the cattle are finally on the same page and are reflecting the tighter cattle supplies in the country. 

 

 

Questions to Ask Before Buying Hay 

Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist

 

Winter is coming and hay inventories are low.  Given the current situation it can come as a relief to just find hay to purchase.  In 2022 many of us in Oklahoma find ourselves making hay purchases from out of state that are not the typical harvested forages we use in Oklahoma.  Regardless of the hay source you are considering, ask the following questions and consider the following before making purchases:

 

1. Ask for a FEED ANALYSIS REPORT of the hay before you agree to buy and consider the moisture, protein, energy and relative feed value of what you are purchasing.  Also consider the nitrate levels if you are purchasing sorghum hay.
2. Purchase by the ton, not by the bale.  In a drought year like 2022, there will be hay on the market from roadsides and abandoned fields.  Some bales of low density depending on baler settings.  In order to get what you are paying for base purchases on tonnage.  All hay bales are not of equal weight or quality.
3. Ask how the hay has been stored.  In a barn = less spoilage, stacked in rows on pallets is better than stacked on the ground.
4. Ask what type of wrap is on bales.  Net wrap results in less spoilage than twine wrap.
5. Ask when the hay was baled.  Bales harvested a year or two ago are more subject to spoilage.
6. Ask where hay is located.  Hay can’t be moved in from fire ant endemic areas without taking precautions to ensure there are no fire ants being transported to areas designated free of fire ants.

 

References

Forage Quality Interpretation

 

 

A Glance into Oklahoma’s Beef Calf Market

Paul Vining, Oklahoma Quality Beef Network Program Coordinator

 

The Oklahoma Quality Beef Network (OQBN) Vac-45 Program is a beef calf preconditioning program implemented by Oklahoma State University Extension in partnership with the Oklahoma Cattlemen’s Association, with the goal of providing a value-added marketing opportunity for cow-calf producers. For calves to become OQBN Vac-45 certified, they must be weaned for at least 45 days and receive two rounds of vaccinations (initial vaccination and booster) against pathogens responsible for bovine respiratory disease (BRD) and clostridial bacteria that cause blackleg. Viral pathogens responsible for respiratory infection include infectious bovine rhinotracheitis (IBR), bovine viral diarrhea virus (BVD), parainfluenza virus type 3 (PI3), and bovine respiratory syncytial virus (BRSV). It is also necessary to vaccinate against the common respiratory bacterial pathogen Mannhemia haemolytica, which is an opportunistic colonizer of the lower respiratory tract, often causing calf morbidity and mortality following a primary viral infection. 

 

In addition to being weaned and vaccinated, calves must be bunk broke, castrated, and dehorned before the date of sale, and deworming is recommended. Oklahoma State Extension Agents verify that calves have met program requirements. Once verified, calves receive OQBN Vac-45 Certification and may participate in OQBN Vac-45 Program-sanctioned sales, taking place at various Oklahoma livestock auction facilities. 

 

Each year sale data is collected by extension professionals for calves participating in the OQBN Vac-45 program, other preconditioning programs, and calves not participating in a branded preconditioning program. This sale data is useful in identifying and evaluating current market trends and beef calf characteristics. Eleven years of OQBN sale data (2011-2021) were recently analyzed. Data was collected at 91 individual livestock sales, which took place at 10 Oklahoma livestock facilities, with an average of 8 sales conducted each year. A total of 149,525 calves were described using 42 market characteristics for 12 market traits (the number of assigned characteristics depended on the given trait). 

 

There was an increase in the percentage of red calves sold over time, increasing from approximately 2% of total sales in 2011, to approximately 12% of total sales in 2021. However, black-hided calves continue to dominate the market and accounted for approximately 68% of total sales in 2021. 

 

Sale data indicated a decrease in the sale of over-conditioned “fleshy” or “fat” calves, with an increase in the sale of calves in “average” body condition, over time. Fleshy calves receive market discounts for exhibiting excess body condition. The decrease in the sale of fleshy calves is evidence of improved calf nutritional management. 

 

This data also shows there were increases in the percentage of calves selling as weaned and vaccinated, that were not part of a specific preconditioning program, even though there appears to be value in participating in some form of preconditioning program.

 

From 2011 to 2021 calves enrolled in the OQBN Vac-45 Program received an average premium of $12.55/cwt compared to non-preconditioned calves sold in the same sales. So far this year, preconditioned calf sales have started out with considerable premiums over non-preconditioned cattle. The first preconditioned calf sales in Oklahoma for the fall of 2022 have preliminary weighted average premiums of over $15/cwt.