Form-A-Feed provides monthly cattle feeding projections for various weights and types of cattle. These projections provide a good estimate of the current cattle feeding climate. Contact a Form-A-Feed representative for projections specifically tailored to your operation.
Click on the link below to see current projections:
Commentary Regarding Current Projections by Simon Kern, M.S.:
China opens doors to U.S. beef! Or so at least the headlines read. While this statement may be a bit premature, the possibility of the largest consumer market re-opening its doors to U.S. beef has certainly given cattle futures a much needed boost. Actual export numbers have been very strong thus far with February exports running 18.3% higher year over year due in large part to Japan’s increased volume. Rumors have circulated that packers were looking to slow the pace of slaughter, however actual slaughter volumes beg to differ as federally inspected slaughter was up 7.3% for Q1 2017 vs. Q1 2016. Feedlots have remained very current with their marketings and packers have been more than willing to maintain these larger slaughter numbers as the cutout has been strong (Choice cutout broke above $220 in late March) and product has been moving readily. Current feedlot inventories have pushed steer carcass weights down significantly (-19 pounds to 868) year over year. Lighter weights have also resulted in a decrease in the number of carcasses classified as Yield Grade 4’s & 5’s (12.4% of graded carcasses, down from 13.9% a year ago). Despite the large increase in slaughter numbers, domestic per capita disappearance has only risen 1.2% due to lighter carcass weights (-1.1%), stronger exports, and smaller imports. This has been very positive news for cattle prices looking ahead through the spring and early summer. The question remains: can this level of demand be maintained throughout the dog days of summer, especially in the wake of plentiful supply of competing proteins?
Changes month over month:
- Expected fed cattle prices have experienced steady gains netting +$5/cwt. Holstein basis seems to have stabilized and has been adjusted up slightly (+$1.00/cwt to -$15/cwt).
- Improving fed cattle prices have pushed the demand for feeder cattle and prices have responded in kind (+$9-12/cwt for Holstein feeders, +$5/cwt for beef heifer calves, and +$3.50-4.00 for beef yearlings).
- Slight increase in cost of gain (+$0.40-0.50/cwt): corn +$0.04/bushel, DDGS -$1.50/ton, pelleted soybean hulls -$10/ton, corn silage, corn stalks, grass hay, and MDGS all unchanged.
- Margins have improved for beef feeders to the tune of +$40-80 per head depending on cattle class. Margin for all classes has pushed into the black for the first time in a long time.
- Holstein feeder margins have remained strong for most feeder classes. Danger looms for lighter or slower growing calves as summer 2018 prices are at a sharp discount to spring (-$7-8/cwt).
As always, please note the difference in cost of gain ($6-10/cwt) and potential profits ($50-100+/head) between the high and low efficiency projections. Ensuring proper management and animal husbandry can make the world of difference in this regard. Spring has finally arrived and wild temperature swings and added moisture making pen conditions difficult to maintain. It is as important as ever to keep pen and bunk management at the forefront in order to keep cattle healthy and performing.
For more specific projections, please contact your Form-A-Feed representative.