Ensuring High Cattle Prices Longer

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

 

Higher placements and reduced marketings resulted in an October 1 feedlot inventory of 11.58 million head, 0.6 percent higher than one year ago. This was the first monthly year-over-year increase in 13 months and the second highest October on-feed total in the data series back to 1996. The October USDA Cattle on Feed report showed September feedlot marketings down 10.6 percent year over year. This marketing total reflects one less business day in the month compared to last year and was slightly less than average pre-report estimates for marketings. September feedlot placements were up 6.1 percent from one year ago. Placements were expected to be up year over year, but this total was larger than pre-report estimates.

 

Despite ever smaller feeder cattle supplies, feedlot inventories have temporarily halted the slow decline of the last year with the September surge in placements. Sixty-eight percent of the increase in September placements were between 700 and 900 pounds, which means that the bulk of the cattle will be marketed in the first quarter of 2024. The remaining increase in placements were cattle weighing less than 700 pounds and will be marketed in the second quarter of the year. Some of the placements were likely drought-forced early feeder sales and may be offset by some reduction in feeder numbers in the fourth quarter. Increased placements no doubt also reflects many producers selling feeder cattle to take advantage of the sharply higher prices this fall.

 

Continued heifer feeding made up the biggest part of the increase in feedlot inventories. October 1 feedlot inventories were up 71,000 head from one year ago and heifers made up 60,000 head (84.5 percent) of the increase. The number of heifers on feed was up 3.7 percent from July and up 1.3 percent over last year. This is the largest October heifer on feed total in the data series back to 1996. Heifers currently represent exactly 40 percent of the total cattle on feed, up fractionally from July and are at the highest percentage of feedlot inventories since October 2001.

 

The industry continues to liquidate females. Monthly slaughter data through September shows that total female (cow + heifer) slaughter has averaged 51.8 percent of total cattle slaughter for the past twelve months. This is the highest twelve-month average female slaughter percentage since August 1986. The latest slaughter data and the latest Cattle on Feed report both suggest that heifer retention is not beginning in 2023. Year-to-date beef cow slaughter is down 12.9 percent from last year but will still result in a net culling rate over 11.5 percent for year - indicating continued liquidation. The beef cow herd will be smaller in January 2024, and it increasingly looks like the best that could happen in 2024 is to stabilize the herd with significant growth delayed until 2025 or beyond.

 

Beef production is down 5.2 percent thus far in 2023. This is a significant decline from 2022 record beef production but is less of a decrease than would be the case if herd liquidation were not continuing. Smaller beef cow inventories are ahead and more dramatic reductions in cattle slaughter and beef production - and higher cattle prices - will occur when herd rebuilding gets rolling. This process looks to continue into 2026 at least. This latest Cattle on Feed report may be taken as bearish for cattle markets in the short term, but it is certainly bullish for cattle markets in the coming years.

 

Derrell Peel, OSU Extension livestock marketing, explains why herd rebuilding is at a standstill on SunUpTV from October 14, 2023.

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Money Saved Through Cost Effective Feeding -Part 2

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

 

Evaluating Money Saved When Purchasing Feed on Cost per Unit of Protein and Energy Basis Last week we broke down the cost per unit of protein and energy in 20% and 38% percent range cubes at current prices. This week we evaluate the money saved when purchasing feed on the cost per unit of protein or energy in order to meet a specific nutritional objective. The bottom-line point of this article is working through an example to determine the most cost effective ration or supplement based on the feeding or supplementation objective.

 

The Scenario & Objective

We have 60 mature cows, average weight of 1,300 lbs., due to calve in January, entering the last trimester of pregnancy, cows are in a Body Condition Score (BCS) of 5.5. We have ample standing forage in the form of native grass which forage analysis indicates is 5% CP and 55% TDN. On grass of this type, cows should consume 1.9 - 2.0% of their body weight resulting in forage dry matter consumption of 25 lbs./day. Knowing that reproductive efficiency is highly correlated to nutrition, our objective is for cows to maintain current weight and BCS until calving.

 

These cows will need 1.84 lbs. of CP and 13.3 lbs. of TDN per day over the next 100 days.

 

If possible we would like to maintain cows by utilizing the standing forage. Can this be done?

 

25 lbs. Forage DM intake x .05 CP = 1.25 lbs./day CP intake.
1.84 lbs. CP required - 1.25 lbs. from the forage equals a daily CP deficiency of .59 lbs./day.

 

25 lbs. Forage DM intake x .55 TDN = 13.75 lbs./day TDN intake. There is no energy deficiency.

 

We have identified a supplemental need for protein. Research have consistently shown that protein supplementation is extremely effective for cattle grazing protein-deficient forage. In fact, energy supplementation will not be effective if dietary protein is deficient.

Now the questions is: Which of the two protein supplements evaluated can most cost effectively meet our goal? The 20% CP range cubes at $350/ton or the 38% range cubes at $475/ton.

 

It would take 3 lbs./day of the 20% cubes to meet the CP requirement. For example: .59 lb. CP deficiency/.20 CP content = 3 lbs. We previously determined the cost per unit of CP in the 20% range cubes to be $.875. Taking the .59 lb. CP deficiency x $.875 = $.52/day cost with 20% cubes to meet CP needs. This daily cost x 100 days of supplementation x 60 cows equals an expense of $3,120.

 

It would take 1.58 lbs./day of the 38% cubes to meet the CP requirement. For example: .59 CP deficiency/.38 CP content = 1.58. We previously determined the cost per unit of CP in the 38% range cubes to be $.625. Taking the .59 lb. CP deficiency x $.625 = $.37/day cost to supplement the cows with 38% cubes to meet their CP needs. This daily cost x 100 days of supplementation x 60 cows equals an expense of $2,220.

 

Supplementing the 38% range cubes purchased at a cost of $475/ton instead of the 20% cubes at a lower price per ton resulted in a savings of approximately $900 to supplement the 60 cows for 100 days.

 

Unnecessary supplementation increases feed cost without real benefit. The goal of supplementation is to feed just enough of the right supplement to optimize the overall diet. Determining the most cost effective means of supplementing cows requires the evaluation of feeds on a cost per unit of protein and energy provided. Can you afford not to?

 

Computer software, such as OSU Cowculator program, can better pinpoint an animal's nutrient requirement at a specific time and in a specific stage of production. These and other useful tools can be found at beefextension.com.

 

Mark Johnson, OSU Extension beef cattle breeding specialist, explains why manure scoring is so important to a cattle operation on SunUpTV from October 14, 2023.

 

References

Beef Cattle Manual. Eight Edition. E-913. Oklahoma Cooperative Extension. Chapters 16 and 17.

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Ten Activities that Improve Profitability of Your Cowherd

Paul Beck, Oklahoma State University State Extension Beef Cattle Nutrition Specialist

 

We have tight cattle supplies and record cattle prices, but costs of production have also increased. The industry is still in a place that if you are not in control of your production costs selling calves for record prices may still be below breakeven. There are 10 activities that are, in my opinion, are important for managing a profitable cow-calf operation.

1. Know your costs of production - Beef cattle Standard Performance Analysis of cowherds across the Great Plains show that high net income producers have 43% lower cost of production than low net income producers. It also allows for more effective marketing, risk management and setting production goals and makes it easier to identify places for improvement.
2. Have a defined calving season that matches your environment - Produces a more uniform calf crop to market, larger uniform groups at auction markets receive $5/cwt compared to single head lots. This also allows for better health and nutritional management and management of calves pre and post weaning. This is the foundation for development of least cost winter nutrition programs.
3. Selection of replacement heifers for fertility and longevity - Heifers that have their first calf early in the calving season tend to rebreed earlier and calve early in subsequent years, and heifers that reach puberty before their first breeding are more fertile. Assessing Reproductive Tract Scores of heifers 30 to 60 days before their first breeding season can help sort out the heifers that have not reached puberty and are more likely to breed late.
4. Pregnancy testing and culling cows - Culling open cows obviously will decrease winter feeding costs, but also culling old cows, infirm cows, unsound cows, and cows with poor dispositions can improve calf performance and decrease calf death losses. Culling open cows and not selecting heifers out of these cows as replacements will improve reproductive efficiency over time and increase calving rate.
5. Improve forage management - The forage resource is the foundation of cow production. Improved management will increase carrying capacity of the land, improve cow and calf nutrition, increase productivity of livestock, and decrease cost per unit of forage produced. Reduced reliance on feed and hay is a key to decreasing costs and increasing profitability.
6. Hay testing and least cost supplementation - knowledge of hay quality will allow you to match the hay being fed to the cow's nutrient requirements, and has the potential to reduce or totally replace supplementation. The supplement being fed and supplement rates can better match what is needed by the cow.
7. Crossbreeding with a superior sire - Heterosis or hybrid vigor is the only free thing you can expect in the cattle business. Crossbred cows with hybrid vigor have higher conception rates, weaning rates, weaning rates, and longevity. These benefits combine to increase the pounds of calf weaned per cow exposed to a bull by 15 to 25%. Increasing sire quality leads to higher weaning weights, post-weaning growth, and improved marketability.
8. Have a designed herd health program - A close veterinary-client relationship pays dividends for your business. A good herd health program will reduce cow death loss and increase cow productivity. More productive cows with good immune systems will produce more and better colostrum which will reduce calf morbidity and death loss...and makes for more productive calves.
9. Add value with preconditioning and retained ownership past weaning - Preconditioning added $15 to $20/cwt premium on calves over the last few years. Extending ownership will allow you to capture more of their true value. This can be a good thing or bad thing, depending on your calf's quality.
10. Reduce debt and keep expenses low - Referrin

 

The most profitable producers tend to have higher pregnancy rates, calving and weaning percentages, and thus higher pounds weaned per cow exposed to a bull than the least profitable producers. Profitability of the cow-calf enterprise is controlled by a web of production and economic factors, but is rarely associated with maximized weaning weight.