February 2020 Cattle Feeding Projections

Posted: February 17, 2020

February 2020 FAF Projections

February brings the hopes of some market capitalization as the month of Valentines needs to shed some more love on the cattle markets.

As of the middle of the month, a bounce back in the live cattle market isn’t enough to make Holstein cattle appreciable as competition for large runs of Holsteins continue to run the price of these animals up. Local sale barn prices continue to be lower than group purchases; however one must remember to increase your cost of treatment and death loss percentage when comingling sources of young calves in these types of markets. One plant continues to indicate a need for straight Holsteins however talk of some widening basis after April are being heard in the countryside. With the current need they have been at -$12.00 basis, come April that basis may jump back to $-14.00.

Crossbred Holsteins, something that have been an item of much interest, but have struggled to find their place in the market as well as pin point a value on these calves are rumored to have finally found a home in some plants. Contracts do exist but one should be sure they have held one in their hands and ran values on crosses before purchasing. Values on these have been anywhere from equal to straight Holsteins to premiums of up to $2.00/lb for a 250 lb. animal. With these values it is important to have your Form-A-Feed nutrition and production specialist run yard specific projections on these type of cattle so you know what your projected outcome may be. If these animals take a straight Holstein basis it is hard to make them work in most scenarios at their current asking price. However if packers come through with their current bids, with eyes on contract, these are certainly animals that will be available with the current dairy breeding situations and may provide a valuable revenue stream for many dairy operations.

Colored cattle, especially light weight heifers have seemingly had some nice runs these past few weeks. The live cattle market certainly showed its swings this month with fear overseas. With more disease loss in the swine market, one would predict some support in demand for beef protein. With National Cattlemans Beef Association (NCBA) Convention just wrapping up, the sought after CattleFax report showed that perhaps some relief will be in sight as long as demand stays strong. There is definitely not a lack of colored cattle out there to feed, and shackle space will continue to dictate purchase demand from packing plants, but domestic meat consumption is supposed to increase ever so slightly due to natural disasters in high importing countries; keeping US beef home. Along with some pending trade agreements with multiple countries, all of this support should show some increases to the fed price to keep up with demand.

It’s nice to have some highlights for the beef industry as we start into 2020. It is my hopes the rest of this month continues to show some positive live cattle changes.

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