The Newsletter, May 24, 2021
Feedlot Situation Improving
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist
The latest USDA Cattle on Feed report pegs May 1 feedlot inventories at 11.725 million head, 104.7 percent of last year. A more useful comparison is to 2019 levels with the 2021 May 1 total down 0.7 percent from May 2019. After a February feedlot inventory that was the highest of any month since February 2006, strong marketings the past two months have reduced feedlot inventories below 2019 levels in April and May. April feedlot placements were larger than expected at 127.2 percent of year ago placements. However, April placements were 1.1 percent smaller than April 2019 placements.
April feedlot marketings were up 32.8 percent year over year and up 0.5 percent from the 2019 level. The April marketings total was the highest April level since 2008. This follows the March marketings total that was the highest for March since 2000. These marketing levels confirm that feedlots are making progress working through large feedlot inventories. Feedlot inventories have declined 3.2 percent since the February peak. On average, feedlot inventories typically increase early in the year to an April peak before beginning a seasonal decrease into late summer. The current relative marketing rate suggests that feedlots will pull inventories down on a sustained basis in the next two or three months and reflect cyclically tighter cattle numbers at some point in the second half of the year.
The bottleneck in fed cattle markets this year has been the capacity constraints that limit the ability of beef packers to process feedlot cattle. Limited packing infrastructure, combined with chronic labor issues have made it impossible for packers to process cattle at an even faster rate. Total cattle slaughter is up 1.8 percent for the year to date compared to 2019. Comparisons to 2020 are not meaningful given the massive pandemic disruptions last year. Year to date steer plus heifer slaughter is up 1.6 percent compared to 2019. Average weekly steer plus heifer slaughter for the first 18 weeks of 2021 is 496,051 head, up 2.0 percent from 2019 levels. In fact, the 2021 year to date weekly average is the highest since 2011.
A look a daily slaughter statistics reveals the beef packing capacity challenges. Although the average weekly total is larger thus far in 2021, daily averages reveal the struggles to maintain slaughter levels. Compared to 2019, average daily slaughter is down four of five days per week, with Mondays down 4.3 percent, Wednesdays down 1.0 percent, Thursdays down 1.3 percent, and Fridays down 7.1 percent. Tuesday slaughter has averaged 3.1 percent higher thus far in 2021 compared to 2019. The big change is Saturday slaughter, which has averaged 62.7 percent higher thus far in 2021 compared to 2019. Maximum weekly slaughter thus far in 2021 is 3.5 percent less than 2019 despite a larger weekly average. Maximum daily slaughter is lower for all days except Tuesday, which is 0.3 percent higher thus far this year. Even Saturday slaughter, which is averaging 62.7 higher this year compared to 2019, has a daily maximum that is 25.6 percent less than 2019. All of this means that packers have less total capacity but are using the available capacity more consistently thus far in 2021. The reliance on Saturday slaughter this year will be increasingly difficult to maintain going forward. Not only are labor agreements and the willingness of labor to work Saturdays a concern, but persistent Saturday shifts reduce opportunities for packing plant maintenance and could lead to more breakdowns and disruptions in operations at some point.
The feedlot situation is improving but it will take additional time to process current feedlot supplies and the stress and challenges at the packing level will slow the process for at least several more weeks.
Estrus Synchronization - Part 2
Dr. Dan Stein, Oklahoma State University Department of Animal and Food Sciences
Choosing an estrus synchronization protocol that can be used with either AI or with natural service can be perplexing, as a number of synchronization protocols are available. To assist cattle producers in determining an effective estrus synchronization protocol, the Beef Reproduction Task Force provides recommendations for estrus synchronization protocols to be used in either cows or heifers and these protocol recommendations are reviewed annually by the Task Force. The current protocol recommendations are found at the Applied Reproductive Strategies in Beef Cattle website.
For synchronization protocols recommended by the Beef Reproduction Task Force; it is suggested that mature cows be in a BCS 5 or greater and at least 50 days or more postpartum at the time of insemination. Recent studies suggest that beef heifers with a body condition score = 6 and reproductive tract score ≥ 4 are more likely to become pregnant to artificial insemination. Three primary groups of products are used to synchronize estrus or ovulation in beef cattle: prostaglandin F2α (PG), progestins (progesterone) and gonadorelins (gonadotropin-releasing hormone; GnRH). Producers should visit with a veterinarian about the products used for synchronization as a current veterinary-client-patient-relationship (VCPR) will be necessary before these products can be purchased. In all cases, be sure to use the correct synchronization product at the recommended time and follow Beef Quality Assurance practices when administering the products.
When trying to decide which protocol to use, one must remember that there are protocols that will synchronize estrus (standing heat) which are designed to synchronize the expression of behavioral estrus into a 3-to-7-day time period. There are other protocols that will synchronize ovulation within estrus; these protocols are used for Fixed-Time Artificial Insemination. The Fixed-Time AI (FTAI) protocols do allow the producer to utilize a limited estrus detection protocol or a no-estrus detection protocol.
The use of sexed semen can result in a decreased conception rate when compared to the use of conventional semen used in similar conditions and situations. Sexed semen can be used on any female observed in estrus (standing heat) and synchronized with any heat detection protocol on the Task Force protocol sheet for conventional semen. It is recommended to use sexed semen on females that have exhibited estrus (standing heat) before FTAI and conventional semen on females that have not exhibited estrus (standing heat) at the prescribed time for breeding listed on the FTAI protocol. Th use of estrus detection aids for detecting females in estrus and for best results perform AI 16 to 22 hours after detecting the female in estrus. Synchronization systems used in Bos taurus breeds of cattle do not yield consistently similar results as in Bos indicus type cattle. The Task Force have listed modified protocols recommended for use in Bos indicus type cattle.
Drs. Mark Johnson and Dan Stein discuss the benefits of estrus synchronization on Sunup.
Oklahoma Quality Beef Network 2020 Sale Summary
Jeff Robe, Oklahoma Quality Beef Network Coordinator
I believe it is safe to say 2020 is year we are pleased to leave in the rear-view. The COVID-19 virus proved to provide plenty of disruptions sending the country into lockdown, thus causing a shift in the retail beef sector with higher demand at the grocery store. Virus outbreaks in packing plants further compounded the problem. Supply issues were eventually remedied, and things were back to business as usual…for the most part. If anything, it exposed the vulnerability in our supply chain and the need for more diversity at the packer level. No doubt, industry issues, and the virus continued to linger on in the minds of many producers. A dry fall and slow wheat availability around the state contributed in delaying stocker buyers from ramping up purchasing. Add in the fact it was also a presidential election year, and the combination of everything left many producers waiting to see how things were going to play out.
During the 2020 fall selling season, the Oklahoma Quality Beef Network (OQBN) participated in six livestock markets (Cherokee, Woodward, McAlester, Payne Co., Southern Plains, and OKC West) where producers participated in 14 sales beginning mid-October ’20 and finishing the first week of February ‘21. Producers enrolled 4,655 head from across 39 counties in Oklahoma, Texas, Kansas, and Colorado. Data was collected on 2,224 head at 9 sales. Producers received an average premium of $8.35/cwt (the first chart shows the premiums by year for steers and heifers combined) over non-preconditioned calves. Steers had average premiums of $8.68/cwt and heifers $7.88/cwt (shown in the second chart).
Needless to say, 2020 did not prove to be a favorable year for the cow/calf producer. OQBN sales were no exception. Though producers still saw premiums over non-preconditioned calves, the data collected displayed irregularities not seen in a typical year. For example, 5-weight steers brought premiums of $5.43/cwt on average. This is a considerable decrease from years past that averaged $12.59/cwt over a 5-year span. Compare that to 3, 7, and 8-weight steers that averaged $18.07, $11.43, and $10.98/cwt, respectively over non-preconditioned cattle. A logical explanation for 7 and 8-weight steer receiving higher premiums could be due to the shortened grazing season due to the late wheat, and buyers were looking for steers that would be feedlot ready coming off pasture. Cattle in the 3-weight class saw the highest premiums with steer receiving premiums of $18.07/cwt and heifers $15.59/cwt. It is likely buyers saw these lightweight preconditioned cattle as a nice opportunity to add a lot of pounds without the cost and time of backgrounding these calves in a drylot since they would be ready to turn out on pasture. Premiums received for 3-weight calves might look enticing, but the seller should also consider whether the 3-weight premium outweighs the value in added pounds by holding cattle longer.
Evidence shows preconditioning calves in a down market does provide added value and squeezing out every penny is more important than ever. However, producers should pay close attention to cost of inputs in order to maximize profit per head. Any anticipated premiums can quickly be erased if one fails to properly track input costs, particularly in feeding cattle. Proper planning is key in any preconditioning program and determining your break-even price a useful way to identify when and how you will market your calves. Tools for calculating cost of gain and break-even pricing can be found at www.beef.okstate.edu.