Mid-Year Cattle Market Assessment

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

 

With the first half of 2024 in the books, it’s worth evaluating the first six months and what to expect for the remainder of the year.  

 

At mid-year, cattle prices are at all-time record levels.  Fed steers averaged $195.81/cwt., live basis, and 850-pound, Med/Large, No. 1 steers averaged $255.41/cwt. in Oklahoma auctions prior to July 4.  Likewise Boning cull cows, average dressing, averaged $143.22/cwt. with high dressing Breaker cows averaging $ 154.41/cwt.  Steers calves are priced slightly below the March seasonal peak but averaged $324.53/cwt. before July 4 for 475-pound Med/Large, No. 1 steers, down from the $350.85/cwt. March average.  

   

Beef production is down 1.6 percent year over year in the first half of the year.  Thus far, beef production is down less than expected.  All of the reduction in beef production is in nonfed beef, with fed beef production actually 0.7 percent higher for the year to date and nonfed beef production down 12.5 percent year over year in the first half of 2024.  Steer slaughter is down 1.7 percent and heifer slaughter is down 1.5 percent year over year so far this year, but sharply higher steer and heifer carcass weights are more than offsetting the modest decreases in slaughter. Carcass weight showed little seasonal decline through the first half of the year and steer carcasses averaged 32 pounds heavier year over year in the second quarter of the year with heifer carcasses 26 pounds heavier in the past 12 weeks.  

 

Choice boxed beef prices are just about equal to one year earlier with a price of $329.96/cwt in early July. Wholesale prices for popular grilling steaks are strong at midyear, led by Strip Loins and Top Sirloin.  The reduction in nonfed beef production, combined with strong ground beef demand has pushed 90 percent lean trimmings and subsequent wholesale ground beef prices prices to record levels.  A mix of five pounds of 90 percent lean and one pound of 50 percent lean resulting in an 83.3 percent lean ground beef formulation has a record wholesale price of $3.26/lb. in early July.

 

As of June 1, feedlot inventories were equal to one year ago.  Feedlot inventories have been stubbornly slow to decrease with annual average monthly feedlot inventories down just 2.2 percent since the peak level 21 months ago in Sept 2022.  Feedlot placements are declining but feedlot inventories remain high due to more days on feed and continued large heifer slaughter rates.  The strong heifer slaughter suggests that little, if any, heifer retention for herd rebuilding has begun.

 

Supply fundamentals will continue to tighten for the remainder of the year and beyond.  Beef production will likely finish the year down 3.0-3.5 percent year over year, less than previously expected due to continued heavy carcass weights.  Feedlot inventories and cattle slaughter will continue to decline, perhaps faster if heifer retention begins in a significant way.  Baring outside shocks, cattle prices will remain at record levels and push even higher if herd rebuilding begins in the coming months.  

 

 

Return On Investment

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

 

Return on investment (ROI) should be considered for inputs of feed, capital improvements and management in commercial cow-calf operations. This article looks at a couple of summer management practices for growing calves that offer a great ROI relative to time and cost.

 

Growth Implants

Data from over 2300 head of suckling calves collected by Merck Animal Health shows an additional 23 pounds of weaning weight gained as a result of zeranol growth implants. In the current market, assuming a conservative value of an additional pound of weaning weight at $3/pound, which is an additional $69 per head from an implant cost of less than $2 per head. Considering the cost of labor for time spent giving the growth implant (which easily fits a management schedule when giving the first round of vaccinations at two to four months of age), the return on investment is over $60 per head. 

 

Protein Supplementation

The Oklahoma Gold and Oklahoma SuperGold supplementation programs both serve as a means of adding profit potential and offer an excellent ROI. Both are designed to cost effectively improve the growth of calves and stocker cattle grazing pastures in late summer and fall. Both are based on limit feeding high protein supplements. Crude Protein (CP) content and digestibility of warm season grasses declines during mid-summer and fall. No doubt many Oklahoma producers watched green pastures turn brown during the past few weeks of intense heat and this corresponds with declining quality of standing forage. In late spring and early summer calves can gain 2 – 3 pounds/day on the same pastures that now may be limiting gains to less than half that amount, even with ample standing forage. Why? Because cattle’s growth performance is based on the most limiting nutrient in their diet. The same grasses that would have contained over 10% CP in May now are likely closer to 7% CP. A 500 lb. calf gaining 1.5 pounds/day requires a diet containing a minimum of 10% CP. Bottomline: at this point in the summer, CP has become the growth limiting factor in a calf’s diet. The key to improving growth rates is protein supplementation. As opposed to high energy creep feeds, Gold and SuperGold programs are designed to improve growth rate through high protein supplementation when ample standing forage is available. The Oklahoma Gold program includes a 38% CP supplement at a rate of 1 pound/day and includes an ionophore additive along with vitamins and minerals. The Oklahoma SuperGold program is similar as it includes supplementing a 25% CP at a rate of 2.5 pounds/day. The Oklahoma Gold program is one of the most cost effective and industry proven supplementation programs ever developed. From early June to October, several trials conducted at OSU, indicate feeding 1 pound/day of Gold can increase gains of stockers grazing summer pastures by up to 0.6 pound/day. Furthermore, the Gold program is based on a low volume of feed and offers the flexibility of feeding every-other-day. In some situations the SuperGold feeding program may offer advantages. Remember, both of these feeding strategies work based on ample standing forage. More details for both feeding strategies can be found at http://osufacts.okstate.edu in the fact sheets referenced below.  

 

References

Trust in Beef Sustainable Ranchers Tour. Animal Care on the Ranch. Deana Hardee, DVM Merck Animal Health. June 20, 2024

 

Oklahoma Cooperative Extension Fact Sheet ANSI-3032. Oklahoma Gold Q&A.

 

Oklahoma Cooperative Extension Fact Sheet ANSI-3033. Oklahoma SuperGold Q&A.