March 2022 Cattle Feeding Projections
There isn’t a doubt that we all are riding the fundamentals of the cattle market and trying to outsmart the processors who continue to control cattle movement and thus drive price week to week.
Chain space continues to hinder supply, a much needed commodity if we expect beef to start becoming more of the gold standard at the grocery store. A few things since last month’s projections have certainly put some pressure on the cattle market. Just after last months projections were posted, Russia went to war with Ukraine. Seemingly in a day, most profit gains were taken away and grain prices skyrocketed. We see our cost of gains (COG) increase over $.10/lb in just a months period because of the increase in grain and corresponding distillers market. Trying to find relief from use of non-protein nitrogen (urea) has not been realized as that continues to climb as well. Any byproduct is in strong demand and if the processors can keep up with supply of corn to make byproduct fast enough, yards are taking as much as they can, this certainly doesn’t do anything for a drop in price, but it is what we are left with to try to keep our COG in check.
In relation, our feedlot producers in the south are looking at COG that are $.15/lb higher than we are currently.
These markets push more feedlots to buy lighter cattle to capitalize on feed conversion and lower COG. Cattle that come in lighter will typically market lighter, pushing a drop in HCW. This will also impact the choice/select spread as lighter carcasses hit the rail in the future. These cattle also require more health attention which doesn’t come cheap.
The risk of feeding cattle has certainly made it difficult for new comers in our industry as the amount of skill needed to market these cattle is much more difficult without much forgiveness. When your revenue seemingly depends on how the world reacts to any social movement at any given minute, decisions tend to weigh more heavily on all of us. Continue to provide the best care you possibly can, and that includes the use of a qualified nutritionist, a proactive veterinarian and a positive relationship with the packers and buyers in your area. Honest discussion goes a long way in our industry yet. Remember technologies become even more important as COG climb. Implants, beta agonists and enzyme/direct fed microbials are all available to help improve health and performance. Talk with your Form-A-Feed Nutrition and Production Specialist for more information on how these can be best applied to your operation and to help evaluate your current feeding dynamics.