April 2018 Cattle Feeding Projections

Year-to-date domestic production data through the end of last week as compared to 2017:

• Federally inspected slaughter +2.2%, 8.374 million head
• Cow slaughter +7.3%, 1.444 million head
• Carcass weight +0.6%, 823 pounds
• Beef production +2.9%, 6.891 billion pounds

A few items of note regarding changes in how our monthly projections are calculated:

• Yardage rates increased by $0.05
• Beef steer and heifer performance numbers aligned with actual performance closeouts from our Opitc feedlot tracking software. High performers are aligned with those at the 75^th percentile of our database and low performers at the 25^th percentile.
• Vet/medical costs by class reflect averages from our Optic database.
• Fed Holstein basis widened to -$18/cwt. Marketing options for this class of cattle have become extremely limited in recent months.

These changes have been made to more accurately reflect today’s market conditions and performance expectations in an effort to better serve our customers.

Changes month over month on our feeding projections:

• Softer feeder cattle market (Holsteins -$5.00/cwt, beef steers -$9.00/cwt, beef heifers -$4.00-7.00/cwt).
• Expected fed beef cattle prices mostly softer with all classes -$3.00-5.00/cwt.
• Increased cost of gain (+$1.80-2.00/cwt): corn +$0.06/bushel, corn silage unchanged, corn stalks unchanged, grass hay +$5/ton, DDGS +$12/ton, MDGS +$7/ton, and pelleted soy hulls unchanged.
• Negative swing in net profits, but modest profitability persists for five of the eight classes of Holsteins.
• Upward movement in the profitability outlook for beef steers and heifers, however all classes are still projecting in the red.

As always, please note the difference in cost of gain ($5-12/cwt) and potential profits ($50-200+/head) between the high and low performance projections. Ensuring proper management and animal husbandry can make the world of difference in this regard. With Midwest late winter/spring conditions here, along with the accompanying ice and mud, it is imperative to focus on managing pens and bunks through these tough environmental conditions. Remember to keep this as a priority as profits on well managed cattle are hard to come by in today’s market and virtually impossible to find on those which are not managed to their full potential.

For more specific projections, please contact your Form-A-Feed representative.