Cow-Calf Corner | July 29, 2024
Beef Markets Reflect Excess Fat and a Shortage of Lean
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist
Choice boxed beef price has decreased by 5.4 percent since July 4 to a current level of about $312.50/cwt., 3.4 percent higher year over year. The decline in boxed beef price is seasonal during the hottest part of the summer. Boxed beef prices are a composite based on about 50 wholesale beef cuts and subprimals. There are some interesting things going on within this set of products this year that reflect the unusual environment in today’s cattle and beef markets.
Middle meats are the biggest driver total beef value. Beef tenderloin is the highest value beef cut and the price has been quite flat and lower year over year for much of 2024. This weakness is a bit concerning but the fall may provide an important indicator of tenderloin demand going into cooler weather and the seasonal pick up in restaurant traffic. In contrast, the other steak cuts have values that are generally at or above year ago levels, including ribeye, strip loin, and top sirloin. Overall, rib primals are priced about 3.4 percent higher year over year and loin primals are averaging 1.4 percent lower this year. Middle meats from the rib and loin primals are the heart of boxed beef values.
A look at prices across the various end primals paints an interesting picture. The majority of chuck products are priced either about the same as last year or lower year over year. This includes the top blade, arm roast, petite tender and chuck roll. One notable exception is the mock tender, which is currently priced well above year ago levels. Overall, chuck primal values are up 6.6 percent year over year in July. In contrast, round cut values are mostly higher this year. Higher values are noted for knuckles, inside rounds, bottom round, outside round and eye of round. Overall, round primal values are nearly 21 percent higher year over year.
These values across the carcass contribute to the overall boxed beef value of fed beef production. Fed beef is the result of steer and heifer slaughter. While overall beef production is down 1.6 percent year over year so far, the modest decreases in steer and heifer slaughter combined with dramatically higher steer and heifer carcass weights has led to a 0.9 percent year over year increase in fed beef production through the first half of the year. Increased days on feed contribute to the heavy carcass weights and also to an average of nearly 22 percent yield grade 4/5 cattle this year. An average of 87 percent of fed cattle are quality grading Choice and Prime thus far in 2024. Fed beef is about 84 percent of total beef production.
Nonfed beef typically makes up the remaining 16 percent of total beef production and consists of cow and bull slaughter. Nonfed beef production is down nearly 13 percent year over year thus far in 2024. Cow slaughter is down over 15 percent and bull slaughter is down nearly 8 percent. Nonfed beef production is the source of 90% lean trimmings, a major ingredient for ground beef. The current wholesale price of 90 percent lean trimmings is at a record level and is higher than several of the round cuts mentioned earlier. The market is attempting to make up for the shortage of lean beef in the nonfed market by pulling more lean beef from fed beef supplies. This mostly comes from several round cuts but also likely from the chuck mock tender (one of the few lean cuts in the chuck). Markets always attempt to balance supply and demand and the increased arbitrage between fed and nonfed beef markets today is an indication of a very unusual market situation.
Cover Crops
Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist
The systematic and strategic use of cover cropping systems is vital for sustainable
agricultural production as this practice can help alleviate soil stress as a result
of intensively managed agricultural land. Cover crops offer multiple ecosystem benefits
including: reducing soil erosion, conserving and enhancing soil quality by increasing
soil organic matter, reducing fertilizer use, disrupting crop pests and disease cycles,
increasing biodiversity, and weed suppression. Several studies have reported positive
effects of cover cropping on soil microbial biomass and diversity, and total soil
carbon and nitrogen. In addition, cover crops have been reported to enhance soil structure
and water retention, reduce nitrogen leaching, and reduce greenhouse gas emissions.
Most cover crop species make excellent cattle forage (for stocker and cow-calf operations alike) and thereby can reduce the expense of feeding hay. Cool season legumes can be used to improve wildlife habitat during winter and early spring when warm season feed resources are scarce. That being said, cover crop success depends on the selection of the best adapted cover crop varieties depending on the goal you plan to achieve. For example, winter wheat may yield the most pounds beef produced per acre whereas a mixture of clover, winter cow peas and radishes will do more to break through a hardpan soil and reduce the need for nitrogen fertilizer.
Accordingly, when choosing a cover crop, producers should consider a variety of factors, including the cost of the seed, the intended use (cover only, grazed, or harvested for forage), how the cover crop fits into the cash crop rotation in relation to anticipated planting and harvest dates, and long-term management goals such as preventing soil erosion or to improve soil organic matter. Soil and climate, as well as the availability of financial assistance, are also important factors. In 2017, approximately one-third of U.S. acres that planted cover crops received a financial incentive payment from either a USDA working lands conservation program or a similar State program.
Consider the following to determine what, when and if to utilize cover crops:
- Determine your purpose - start by setting goals.
- Diversity of the cover crop mix has advantages and reduces risk over monocultures.
- A well-maintained and properly calibrated planter or drill is key when planting – especially for a diverse crop mix. A diverse cover crop mix consist of both large and small seeds, making calibration a challenge. This can be helped by making it a standard practice to physically stir the seed in the seed box every hour or so and keep planting speeds below 5 MPH.
- Planting depth is important. Successful cover-croppers have found that planting at 1 - 1.5 inches depth provides a more uniform stand.
- Monitor the weather and soil moisture which will impact planting depth and potentially time of planting. Typically in Oklahoma, we plan to seed wheat and rye for grazing by early September, this is not a fixed rule for all cover crops. Weather forecasts should be considered when determining the best time to get seed in the ground.
- Establish cover crops by no-till (when possible) to help retain soil moisture.
- Establish a budget and stay within it. Determining what cover crop mix works best for your operation may take some trial and error. Start small, keep records and monitor success. Think long-term.
- Discuss your goals with seed dealers and extension specialists to arrive at the best cover crop mixes to meet the goals of your operation.
References
- Cool-season cover crop effects on forage productivity and short-term soil health in a semi-arid environment
- Blueprint For The Future - Part 2 Cattlemen’s Conference. Economics of Transitioning to Regenerative Ranching: a Look Into Noble’s Ranches. Hugh Aljoe. Noble Research Institute. May 22, 2024
- Blueprint For The Future - Part 2 Cattlemen’s Conference. The Impacts of Management on the Carbon Footprint of Beef. Dr. Jason Rowntree. Michigan State University. May 22, 2024
Increasing the Resilience of the Beef Cattle Supply: 3. Impact of Drought on Finishing Performance and Health
Paul Beck, Oklahoma State University Extension Beef Cattle Nutrition Specialist
In recent weeks I covered some of the impacts of drought on cow numbers and feeder cattle supply based on comments I made at a symposium at the American Society of Animal Science meeting held in Calgary “Increasing the Resilience of the Beef Cattle Feeder Supply”. This week I will cover some additional impacts of drought and changing weather patterns on performance and health of feeder calves.
Along with reduced cow rebreeding rates, heat stress or nutrient restriction of gestating cows will result in long-term reductions in productivity of their offspring. Last week I showed how heifer offspring of undernourished cows have lower fertility. The impacts affect growing and finishing performance as well. There has been a lot of research focusing on the impact of the environment the cow is experiencing during gestation on the offspring, this has been studied in humans, sheep, swine, cattle and other species. So, whether calf, lamb, piglet, or baby, adversity impacting the dam has profound effects on the next generation. This is called ‘Fetal Programming’. Severe nutritional restrictions during the last half to third of gestation are required to reduce calf body at birth, which is more pronounced in heifers than mature cows. But there are other effects that have been demonstrated on feeder cattle production. The post-weaning performance through finishing from calves produced by the same cowherd in 2009 (a wet year) and 2010 (a drought year) are presented below. Breeding and management of the cowherd were relatively consistent across years, but finishing performance (average daily gain), bodyweight at harvest, hot carcass weight, and carcass quality (percentage USDA Choice and greater) were all lower for calves impacted by the drought.
Item | 2009 (Normal) | 2010 (Drought) |
---|---|---|
Finishing Average Daily Gain, lbs/day | 3.39 | 3.13 |
Harvest bodyweight, lbs | 1,222 | 1,209 |
Hot Carcass Weight, lbs | 735 | 729 |
% USDA Choice | 90.4% | 74.2% |
Yes, undernutrition of the dam has impacts on heifer fertility (as discussed last week) and finishing performance of offspring, but there are other impacts that are less visible. Colostrum production and quality is affected by undernutrition at calving, which can impact long-term health and productivity. There are more subtle effects of undernutrition on organ development (liver, lungs, heart, GI tract etc.) that can have long-term effects on health. In the Figure below is data from Shawn Walter, a data scientist from CattleFax, showing the feedlot mortalities in the last 60-days of the finishing period as a percentage of total death losses. There is a definite upward trend line over the last 10 years for both steers and heifers. Notice how the data points are above the trendline for the years following the drought in 2015 and 2016, before returning to baseline after a couple of year of ‘normal’ environmental conditions. Although not a scientific analysis this may indicate drought impacts on animal health and well-being through fetal programming.
Figure 2. Mortalities in the Last 60-days of Finishing as a percent of Total Mortalities