October 2018 Form-A-Feed Cattle Feeding Projections

Posted: October 22, 2018 | Written By: Heidi Doering-Resch, M.S.

Oct. 2018 Cattle Projections

 

Oct. 2018 Profit Projection News:

 

Native Cattle:

  • Estimated cattle on feed reports continue to climb month over month with this past month being no different. The cattle on feed live cattle marketing report that came up this past Friday was once again up 5% over the past year totaling over 11.4 million head entering feedlots with a capacity of 1,000 head or more and was the largest since the series reporting began.
  • Placements of cattle to date were down about 5% since last year at this time.
    • Many of the highest placements came in the range of 700-800 lb. cattle trying to hit the April live cattle market on the futures board and the marketing reports would confirm competition for this weight group of cattle.
    • The delay in field work across the upper Midwest in addition to up and down weather has slowed this region from placing in cattle.
    • Cold and wet weather hampering lot conditions has further slowed cattle moving into the yard, and rightly so, with concerns over health of calves and meeting projected performance.
  • Prices continue to be variable depending on the region of purchase with many of the cattle in the plains section being offered higher than the Midwest.
  • Lightweight feeder cattle continue to push the market due to hopes of next years yearling run and southern grass and wheat grazing prediction availability.
  • Low corn prices and an ever changing live cattle board continue to make locking cattle in for a profit a difficult game at times however; feeding corn through livestock is a seemingly strong value added proposition in this market.
  • With the up and down weather and further competition for cattle it goes without saying a proper receiving program is worth its weight in gold.

 

Holstein and Holstein Cross type cattle:

  • Holsteins continue to look attractive when buyers take advantage of locking in cattle contracts ahead of time.
    • Please note the difference between buyer contracts and open market contracts when buying Holstein or cross type cattle as it is the difference between a profit or a loss.
  • Many dairy operations are looking to diversify with the drop in price of milk and retention of their bull calves and crossbred calves has potential value if marketed correctly.
  • Please note the difference in low efficiency vs high efficiency fed cattle profit margins when making the decision to purchase and feed Holstein cattle, define which area you fall under.
  • The ever changing commodity section puts pressure at times on the standard self-feeder type diet if feeding a blend of by-products.
    • DDG have remained tight due to competition with the export market.
    • Soyhulls have taken a jump in price these past few weeks.
  • Self-feeder programs, such as Tend-R-Leen, that utilize just a corn and pellet option may be more suited for certain areas where by-products are unavailable or out of cost due to trucking expenses.

 

Other Market Considerations:

  • Finding and making bedding for pack type facilities may prove difficult if mother nature doesn’t start to cooperate.
  • Similarly, hay supplies may continue to be in tight supply as you look across the Midwest region and the inability to get multiple crops up due to a wet spring and fall.
  • By-products will continue to be volatile as export pressure stays strong; If you have the ability to contract you should certainly entertain it.
  • Custom feeding pens are becoming more available as feeders are tired of the volatility in the live cattle market and looking to take a break from ownership.
  • Calf health and preconditioning programs seemingly pay a bigger dividend when the market and the weather are so volatile.

 

With the volatility in the market, strong competition for all weights and types of cattle and the fall run finally starting amidst fall harvest, be diligent in bunk management, pen walking and cattle health checks. There is not much margin for error in today’s cattle feeding business with many yards buying at a loss and betting on the come. When purchasing cattle, whether they are fed and owned or custom fed be sure to know your COG and lock your protection in place. Husbandry and management are the one thing you can control every single day, don’t take that for granted as it is the difference between profitable cattle and large losses. If you need help in assessing your management and risk, be sure to reach out to the Form-A-Feed beef team for individualized attention. As always for further information or more defined cattle projections please see your local Form-A-Feed Representative.