August 2021 Cattle Projections
Cautiously optimistic are the words that describe the current market trends as we see most columns in the black this month.
True cost of gains have started to drop along with the corn price as harvest approaches, but in many areas the drought still calls the shots as producers wait to fill pen space due to low feed inventory or feed uncertainty.
Fat cattle bids have been promising this last week but shackle space continues to be the hold up in delivery.
If you look at Benchmarks latest data (Elanco Animal Health), the average cost of gain ran around $1.00/lb for cattle closed out in June. Current Holstein projections show an average cost of gain going forward at about $1.16/lb looking at both high and low conversion cattle. Native cattle tend to run around $0.95/lb for heifers and steers running around that $1.00/lb in the Midwest.
With lower inventories in the feed yard the drop in distillers prices we normally see in June has started to come around. Corn prices have dropped but continue to be volatile as we wait for the crops to mature and see just how much the drought has impacted corn production. Hay is in high demand but will most likely be offset by a lot of acres of silage that will be put up due to the drought. Make sure you test your ensiled feeds for nitrates prior to feeding.
Prices of feeder calves have started to come back a little after a very high start, and lighter weight calves will enter the market once again caused by burnt up pastures in drought areas. These calves will demand more attention in the feed yard for health and performance, but should continue to meet our high demands of producing superior grading cattle. If feed inventory is plentiful there are opportunities to help feed gestating cows for those in the hardest hit areas on a custom basis.
As we begin to bring in lightweight cattle please be sure to talk to your Form-A-Feed Nutrition and Production Specialist on ways to help set those calves up for a healthy feeding period. Running projections and being realistic on out weights when calves come in lighter will be crucial to making sure these cattle turn a profit.
For more information please feel free to contact your local Form-A-Feed representative.