December 2018 Cattle Feeding Projections
The month of December is proving to be an up and down ride for many cattle feeding operations. Looking to the challenges we have faced this month include a very tight supply of distillers grains resulting in many high priced loads of distillers being delivered to the feedlot. The ethanol market continues to see a very hard down trend to their pricing structure (Figure 1) and in doing so has reduced their capacity greatly which in turn shortens the amount of distillers that is available creating higher distillers prices due to demand. You will see this price reflected in COG in this months cattle projections as MDG went from $65/ton to $85/ton. In some regions delivered price to the feed yard is even greater.
Alternative protein sources, including adding urea back into supplements are helping to reduce the pressure on many feedlots as these supplies continue to tighten. The other commodity you will note that continues to have pressure is hay supply. Depending on the region hay prices continue to climb and price out ground in the pile over $100/ton. Producers are able to find some reprieve in alfalfa supplies to help offset utilization of all grass hay.
On the weather side, those yards that have cattle under roof continue to closeout better performance but not without the cost of extra bedding being used through the cattle keeping COG higher than what we would like. Open yards continue to struggle to keep pens maintained as snow/rain/foggy conditions hamper any drying and continual pen scraping. Cattle continue to carry tag with these outside pen conditions.
All of these items continue to contribute to lower live weights and subsequently hot carcass weights being reported this year compared to the same time last year (7 lbs lighter HCW). The positive note is that the choice cutout is above where we were trending last year. Overall total head count being slaughtered remains above this same period as last year making it extremely important to know where your COG is prior to laying cattle into the yard to keep oneself competitive in the market today. Your local Form-A-Feed representative can easily run you projections based on your individual needs so that you can better understand where your break-evens lie.
It is my hopes that you find yourself turning into the Christmas Season with beef on your menu and family gatherings where you can rejoice in the prosperity of health and family. This month brings about much excitement for the new year and a celebration of what has been accomplished.
As always, if you have any further questions please feel free to reach out to your local Form-A-Feed representative.
Merry Christmas and Happy New Year from the Form-A-Feed Beef Team. Thank you for your business in 2018 and we look forward to growing with you into 2019.
Figure 1. Source https://www.nasdaq.com/markets/ethanol.aspx?timeframe=6m