May 2018 Cattle Feeding Projections

Posted: May 22, 2018 | Written By: Simon Kern, M.S.

Beef Premixes

May 2018 Cattle Feeding Projections

Year-to-date domestic production data through the end of last week as compared to 2017:

  • Federally inspected slaughter +2.5%, 11.528 million head
  • Cow slaughter +7.7%, 2.031 million head
  • Carcass weight +0.7%, 817 pounds
  • Beef production +3.2%, 9.417 billion pounds

 

A few items of note regarding changes in how our monthly projections are calculated (second month these adjustments have been made):

  • Yardage rates increased by $0.05
  • Beef steer and heifer performance numbers aligned with actual performance closeouts from our Optic feedlot tracking software. High performers are aligned with those at the 75th percentile of our database and low performers at the 25th percentile.
  • Vet/medical costs by class reflect averages from our Optic database.
  • Fed Holstein basis widened to -$18/cwt. Marketing options for this class of cattle have become extremely limited in recent months.

These changes have been made to more accurately reflect today’s market conditions and performance expectations in an effort to better serve our customers.

 

Changes month over month on our feeding projections:

  • Softer feeder cattle market (Holsteins -$7.00-9.00/cwt, beef steers -$3.50-4.50/cwt, beef heifers -$1.50-4.75/cwt).
  • Expected fed beef cattle prices mostly softer with all classes -$2.00-4.00/cwt.
  • Increased cost of gain (+$2.00/cwt): corn +$0.17/bushel, corn silage +$5.00/ton, corn stalks -$10.00/ton, grass hay +$5/ton, DDGS +$17.50/ton, MDGS +$3/ton, and pelleted soy hulls -$21.00/ton.
  • Mixed movements in net profits, but modest profitability persists for four of the eight classes of Holsteins.
  • Overall downward movement in the profitability outlook for beef steers and heifers, with nearly all classes still projecting in the red.

 

As always, please note the difference in cost of gain ($5-14/cwt) and potential profits ($50-200/head) between the high and low performance projections. Ensuring proper management and animal husbandry can make the world of difference in this regard. Spring has finally arrived and wild temperature swings and added moisture making pen conditions difficult to maintain. It is as important as ever to keep pen and bunk management at the forefront in order to keep cattle healthy and performing. Remember to keep this as a priority as profits on well managed cattle are hard to come by in today’s market and virtually impossible to find on those which are not managed to their full potential.

 

For more specific projections, please contact your Form-A-Feed representative.