The Ground Beef Market Gets Squeezed

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

 

Total beef production in the U.S. is down 5.2 percent year over year through the first three quarters of the year.  Nonfed beef production includes beef from cows and bulls and makes up an average of 16 – 17 percent of total beef production over time.  Nonfed beef production has averaged 16.5 percent of total beef production thus far in 2023 and is down 6.1 percent for the year to date. 

 

Through the end of September, total cow slaughter is down 5.4 percent with a 4.4 percent increase in dairy cow slaughter partially offsetting a 13 percent year over year decline in beef cow slaughter.  Cow carcass weights are down as well, averaging 3.8 pounds lighter this year compared to 2022.  Bull slaughter is down 6.1 percent year over year through September and bull carcass weights are down by 5.6 pounds compared to one year ago.  Bull beef makes up an average of 10 percent of total nonfed beef.

 

Nonfed beef is used for a variety of products including muscle cuts, sausage products and a wide variety of processed beef products but the largest use is for ground beef production. Nonfed beef is characterized by 90 percent lean trimmings (90s), which are combined with fatty trimmings from fed cattle, characterized by 50 percent lean trimmings (50s) to make ground beef.  These trimmings are the basis for the majority of hamburger used for food service, especially quick service restaurants (QSR) and some retail grocery ground beef.  Retail grocery ground beef often includes primal specific grinds, such as ground round, ground chuck, etc.          

 

Table 1. Ground Beef Product Prices.

 

Fed beef production from fed steers and heifers includes 50 percent lean trimmings that are used for ground beef production.  Fed beef production is down 4.8 percent year over year through September with steer slaughter down 5.3 percent and heifer slaughter down 1.8 percent year over year.  Steer carcass weights are down 5.6 pounds and heifer carcasses are down 9.6 pounds compared to one year ago.  This leads to a smaller supply of 50 percent lean trimmings.  There are many ways to combine lean and fatty trimmings to produce ground beef.   Prices for both 90s and 50s are currently higher year over year (Table 1). Table 1 shows the price of a typical ground beef reference price formulated as a 5:1 ratio of 90s to 50s that produces an 83.3 percent lean ground beef combination. The September ground beef price of $278.25/cwt. (Table 1) is a record price, slightly above the one-month pandemic spike in May 2020 that reached $277.76/cwt.  

 

Domestic nonfed beef supplies are supplemented by imports of processing beef for ground beef production.  As domestic processing beef supplies tighten up, beef imports are increasing, as expected.  Total beef imports through September are up 5.4 percent year over year. 

 

Ground beef is an important component of total U.S. beef consumption and is the inexpensive alternative that consumers increasingly turn to when beef prices rise.  However, the overall decline in beef production means that ground beef supplies will be smaller and prices higher going forward.

 

 

Money Saved Through Cost Effective Feeding - Part 1

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

 

From a nutritional standpoint, cattle basically need protein, energy, vitamins, minerals and water. Assuming free choice vitamin/mineral and water is in adequate supply, most nutritional supplementation and feeding focuses primarily on the crude protein (CP) and energy (TDN) needs of cattle. Furthermore, nutritional needs of cattle vary by age, size, stage of production, environmental conditions and weather, gender, breed and other factors (like level of milk production). In any nutritional program it is imperative to determine the objective of why we are feeding or supplementing. After defining our goal, we can minimize input costs and maximize our profit potential by evaluating feeds based on nutrient content as opposed to just looking at the price per ton or bag. 

 

Evaluating Feeds on a Cost per Unit of Protein and Energy Basis

At the time of this writing, 38% CP, 70% TDN range cubes are available at a bulk price of $475/ton, the same commercial feed mill has 20% CP, 70% TDN cubes priced at $350/ton.  Protein and TDN content are on an “As Fed” basis.  If we are in a situation requiring protein supplementation of cows grazing warm season grass this fall, either of these protein supplements could meet our needs, but which is the more cost effective alternative?  At a glance, $350/ton strikes most of us as a more cost effective feed. But what are we actually getting?  Some “Cowboy Math” yields the following answers:

 

The 38% Cubes

At a cost of $475, one ton of 38% cubes contains 760 lbs. of CP and 1,400 lbs. of TDN:

For example: 2,000 lbs. x .38 = 760 lbs. and 2,000 x .70 = 1,400 lbs.

The cost per unit of CP is $.625/lb., the cost per unit of TDN is $.34/lb.

For example: $475/760 lbs. = $.625 and $475/1,400 lbs. = $.34

 

The 20% Cubes

At a cost of $350, one ton of 20% cubes contains 400 lbs. of CP and 1,400 lbs. of TDN:

For example: 2,000 lbs. x .20 = 400 lbs. and 2,000 x .70 = 1,400 lbs.

The cost per unit of CP is $.875/lb., the cost per unit of TDN is $.25/lb.

For example: $350/400 = $.875 and $350/1400 = $.25

 

So, we have determined the more cost effective source of CP is the 38% cubes and the more cost effective source of energy is the 20% cubes.  What is the most cost effective feed? Depends on our nutritional objective. What we are we feeding/supplementing and why.

 

Mark Johnson, OSU Extension beef cattle breeding specialist, discusses the importance of hay testing on SunUpTV from September 17, 2022.

 

 

Open or not?

Rosslyn Biggs, DVM, OSU Cooperative Extension State Extension Beef Cattle Veterinarian

Dana Zook, OSU Cooperative Extension Northwest Area Livestock Specialist

 

The three primary methods to evaluate pregnancy in cows include rectal palpation, reproductive tract ultrasound, and blood testing. In 2017, the USDA National Animal Health Monitoring System Beef Cow-Calf Study evaluated the number of operations that utilized pregnancy checking. Although percentages were higher as herd size increased, across all operations only 19.3% used palpation, 8.8% used ultrasound, and 3.5% used blood testing for pregnancy evaluation. Producers who choose not to evaluate pregnancy status undoubtedly leave money on the table below.

 

Historically, rectal palpation has been the industry standard and is currently the most common pregnancy testing method in the region. The reproductive tract and/or the fetal calf is manually palpated to determine pregnancy status, approximate age of the calf, and identify any physical issues that may exist in the reproductive tract or pelvis of the cow. 

 

Ultrasound is another option to identify pregnancy as early as 21 days with high reliability at 28 days or more. Fetal age can be determined earlier than palpation alone and depending on the stage of pregnancy with more accuracy using ultrasound. Ultrasound also provides the opportunity to determine sex and potential physical abnormalities of the fetus and cow. It is important to note, both palpation and ultrasound require highly specialized training and may only be performed by those legally able to do so as outline by a state’s veterinary practice act. 

 

Blood sampling is the final option for pregnancy testing. Unlike humans, cows do not excrete a pregnancy identifier in urine. These tests detect pregnancy glycoproteins in the blood, and most can detect pregnancy reliably at 28-29 days. A skilled producer can obtain blood samples for cows and the blood pregnancy test can be done chute side with a result within 20 minutes, or the blood sample can be sent to a lab. 

 

There are advantages and disadvantages to each option. Producers should consult with their veterinarian on which method fits the needs of the operation. Blood testing may provide a convenience factor in some situations but does not replace the value of having a veterinarian involved in the herd. Pregnancy checking time traditionally opens the door for broader discussion regarding herd health and lays the foundation for establishing a valid veterinary-client-patient-relationship. If blood testing is the best option, the producer and their veterinarian should set aside separate time and resources to continue discussion on the operational needs and goals.

 

Comparison of Rectal Palpation, Ultrasound, and Blood Tests for Beef Cattle Pregnancy Diagnosis¹

 

Dr. Mark Johnson explains the importance of reproductive efficiency on cowherd productivity on SunUpTV from October 7, 2023.