Beef Cattle Marketing in Uncertain Markets
It’s only the beginning of the month and we have already seen a swing in cattle prices. It seems once again where we thought the market was going and where it’s at now are two different spots. Continual reports of more cattle on feed than anticipated and lower live and hot carcass weights (HCW) (Figure 1.) due to a rough winter/spring as well as the flooding tragedy in NE keep us in limbo when it comes to guessing where this market is going. If you look at beef production slaughter, an estimated average from the first part of April’s marketing compared to confirmed pounds marketed last year, we are running nearly 20.25 million pounds more than a year ago. That’s an astounding amount of beef being produced currently even with lighter carcasses hitting the chain.
So, what’s the positive side to this?
If you review the USDA National Daily Cattle and Beef Summary from April 5th, 2019 you can see that we are sitting in a marketing window that looks to provide some opportunities when it comes to capitalizing on the choice/select spread in the next few months if it follows historical trends (See Figure 2). When looking to put cattle on the show list, or if you already have cattle contracted with a ship date, you can still work at adding some additional pounds before they hit the trucks regardless of how you sold the cattle to help offset some of the negative winter stress effects all yards felt regardless of type of finishing lot.
As the spring thaw continues and pens are hauled clean and dry lots come back into condition, the temperature range allows for some great weight gain. During this time, use of beta agonists such as Optaflexx®, ActogainTM 45 or Hydro-Flexx can help add additional pounds while reducing feed conversion (research shows by about 15%) during a time when most fat cattle are at their least efficient growth stage. These pounds, when accounted for correctly, return margin on every head put on the truck. Assuming you are selling steers and adding an additional 22 lbs. per head live, 20 lbs. of HCW and an increased dressing percentage by 0.5% (on average), figuring your own yards ROI will allow you to utilize a product with zero slaughter withdrawal for the last 28 to 42 days on feed. Figuring your marketing window will best help tell you how long your cattle should be on this product. Keep in mind that heifers and Holsteins have different weight gains on these types of products, so make sure to use realistic values for live and carcass weight gain in these types of animals to understand what your true ROI will be. Please be sure to ask your local Form-A-Feed representative about which product is right for your operation, proper feeding rate, and calculated ROI based on type and kind of cattle fed.
When looking at the upcoming months with the Choice/Select spread, additional revenue can be maximized if cattle are set to be sold during these months. The use of certain beta-agonists are approved in most cases when selling on a grid but be sure to ask that question prior to assuming this is the case and understand that these products on average type grid cattle can reduce marbling score. Utilizing an all-natural product like our stand alone Hydro-Lac allows for further carcass benefits, less shrink and areas of flexibility when it comes to marketing days. It’s one of the most flexible pre-harvest tools on the market.