May 2019 Cattle Feeding Projections
May beef cattle projections confirm the tough economy cattle producers are facing when trying to work through Mother Nature and current markets.
There is more red showing up once again, with smaller profit margins on certain types of cattle. This makes managing your risk that much more important.
From the last few turns of closeouts, regardless of the type of facility or cattle one feeds, we’ve learned that the need for environmental control and solid marketing are critical.
The buy on heifers is seemingly disappearing, with many folks refilling with colored heifers. This competitive market is working against those who were late to purchase.
The Holstein market picked up based on this last go of cattle marketing, but have since fallen into some trouble with finding contracts to sell finished cattle, without taking the spot market basis. Talk in the country when trying to hedge April/May of 2020 cattle is that contracts with the major buyers are full. This pushes these cattle into June contracts or spot markets, both leading to discounts when it comes to delivering heavy cattle to market or taking such a harsh negative basis. There is talk of discounts of $-0.32/lb to $-0.50/lb, pending which packer buyer you are trying to sell to. Offerings to send Holsteins to further packing houses for shackle and contract space only inflate losses. In some instances, trucking goes from $45/hd to closer to $90.
On a positive note, both local and USDA reporting on distillers has shown a reduction in cost per ton. However, there may be questions on potential availability if we can’t get corn in the field and hay harvested. Many yards are running critically low on silage, stalks, and hay due to higher maintenance cost this winter; increased bedding use; and unavailability of other feedstuffs (gluten) from a spot purchase to help economically offset these issues.
May isn’t over and it continues to be Beef Month. Sharing your story, your recipes and continuing to be a positive role model for the industry will all help promote the product and brand we are proud of.
Also, remember that summer heat stress is upon us and can greatly impact cost of gain. Consider Hydro-Lac® as part of a comprehensive heat abatement program at your feedlot to reduce the impact of heat stress and improve recovery.
I encourage you to sign up for the Form-A-Feed Summer Feedlot Clinic, which will be held June 11th at the Butch Olson Feedlot near Avoca, MN. At this interactive learning event, there will be sessions on ways to improve yard performance by paying attention to environmental factors, feed technologies and strategies that will help impact your bottom line positively. You can register for this event here: https://formafeed.com/event/summer-feedlot-clinic/
As always, with further questions please contact your local Form-A-Feed Nutrition and Production Specialist.