November 2021 Cattle Projections
November beef projections look good when paired with higher live cattle prices when considered from the month prior. The trick will be to maintain an even, if not positive, basis when selling fats based on packer demand and shackle space. This past week has shown there is still packer demand over contract cattle as live cattle bids reached into the $1.30’s. Normal cattle swings seem to be shifting as calf prices have once again trended upwards even with the projected number of cattle on feed and delay in fat cattle delivery. World demand for beef protein sources continue to rise; the issue is the pricing formulation as it hits the shelves. This puts some uncertainty for affordability of beef as packers, retailers, restaurants and export all vie for sales or a more consistent expectation of selling price.
Breakeven cattle purchase prices are higher this month with pressure from the corn market now that most of the crop is in. Even realizing good yields, many producers found that the actual starch value is lower in their corn due to the drought and harvest conditions as a lot of ‘trashy’ corn was put into bins. Downed corn, droughty corn and late season rains all impacted harvest and seemingly caused a delay in some areas for filling pens. Those producers are now in the buying mode and looking to fill pen space which is also why the pressure for calves has increased.
It is easy to get into the mindset of ‘doing it cheaper’ however remember that memo your father always said, ‘You get what you pay for’. In the cattle business we are in the art of turning inconsistent feeds into a consistent product; one of the hardest things to do. Between dry matter variation, nutrient variation and price flexibility we are always trying to improve our conversions. A cheap mineral, fire sale, etc. are cheap for a reason. Something will need to be accounted for when utilizing these products. They are not a bad deal, one just must consider that for every ‘give’ there is a ‘take’. Understand your feedstuffs and rely on your nutritionist to help you extract the most out of that feed, whether it be the best ingredient or one that was harvested subpar.
As we start to enter into the holiday seasons remember that beef is a great gift and a great meal to share with those we are thankful for.