Updates on and information for the livestock markets


by Karl H. Kazaks

Virgina Tech has been hosting a series of livestock update webinars to keep producers appraised of information and strategies relevant to current market conditions.

The hockey stick-like increase in the price of wholesale beef is, as producers know too well, not being reflected in feeder cattle prices.

Boxed beef prices are high, said Matthew Sponaugle of VDACS Livestock Services, because of lower kill volumes. Whereas slaugherhouses typically kill 600,000 – 650,000 head of cattle per week, in recent weeks that number is down by 150,000 – 200,000 head per week, due to slaughterhouse closures.

Leaving an extra 200,000 head of cattle in feedlots every week “is a big, big deal,” said Sponaugle. He expects to see later this year higher carcass weights due to backlogged animals getting heavier. He anticipates it will take an entire year to “clean up the overcapacity” of animals – which in turn could result in an oversupply of beef in the retail market.

Cull cow prices have been widely variable, spiking in early April and dropping more recently with slaughterhouse closures. If you have cull cattle but aren’t sure of whether to sell now or wait, Virginia Tech’s Dr. John Currin recommended being “ready to move when the price is good.” However, if cull cow prices are low, you’re probably better off keeping borderline cull cows.

While producers would welcome a return of the market prices of 2014, some decisions made then weren’t good. In 2014, calf prices led everyone to “keep any cow that could get pregnant,” Currin said. Breeding lower quality animals meant a decrease in weaning weights in 2015.

The lesson from then? “Cows that need to go need to go,” Currin said. “Cull cows are cull cows for a reason and should be culled in almost any economic situation.”

Currin also suggested some management tips all producers can use to ensure maximal profitability. In tough economic times, best management practices become even more important. You may be inclined to look at your input costs and see what you can cut. “All farms think about that,” he said. Look at limiting the input costs related to improving your quality of life (like new handling facilities) but not your bottom line. Don’t limit inputs which increase the number of live calves and increase calf weight gain (like vaccines).

Position yourself to make the best use of your forage. Take the time to calculate your optimal stocking density and review your hay production or hay sourcing strategies – it’s important to get hay in the right quantity and quality. For autumn-calving herds, if you have plenty of grass and spring is looking good in your area, consider keeping cows and calves together longer. Grazing the spring flush of grass is typically the most economical way for calves to gain weight. The downside is there may be less forage stockpiled for the summer, but Currin thinks this year the risk is likely worth it.

For a related reason, he also suggested reverse weaning – keeping calves on pasture and containing cows when weaning. “In abnormal times we need to consider doing things abnormally,” he said.

Autumn-calving cows are at their lowest level of nutritional requirements right after weaning, so they can be maintained by feeding them your lower quality hay. Calves, meanwhile, can be backgrounded on pasture with minimal supplementation while still attaining a profitable average daily gain.

Reverse weaning does have downsides: you will have to feed cows and calves, and the area where you keep your cows could experience sod damage.

Forage management was addressed by Virginia Tech’s Dr. John Fike. In Virginia, he suggested, livestock producers should shoot to graze 300 days per year. Sometimes, he said, a farm can be more profitable by reducing its herd size, because by adjusting input levels and management techniques the increase in the profit per head will offset the decrease in total herd size.

Fike suggested that though cattle producers are livestock farmers, “the basic commodity is forage.” Thinking that way will affect how you manage the whole farm.

To have the best forage, test for soil fertility and review your fertility management regime according to test results. Also, use rotational stocking and stockpile tall fescue, Fike advised. When appropriuate, look at using different forage species. Clover can be a good companion species.

When stocking rotationally, make sure to manage forages appropriately, Fike said, otherwsie you won’t have a system as productive as it can be. That means not overgrazing and not letting forage stands get overmature.

Different species can handle different levels of grazing – meadow fescue can be grazed harder than than orchardgrass. One rule of thumb to keep your livestock from overgrazing is to move your animals before they graze into the lower, yellow area of forage (where the forage keeps stored carbohydrates).

When sourcing feed, Wilson suggested ordering early. Dried distillers’ grain is in short supply this year because ethanol plants have been producing less because there is less demand for ethanol.

Some producers are considering holding cattle, hoping for higher prices. If you do this, Wilson said, be aware that many buyers have a maximum allowable fat thickness. Also, slow feeding doesn’t take your herd’s average daily gain to zero – it just decreases average daily gain.

If you decide to slow feed and your cattle are used to feeding ad lib, consider adding forage to the ration and decreasing the energy content but not the net amount fed. If you do limit feed, make sure there is enough headsapce in the feedbunk for each animal in your herd (at least 24 inches). Otherwise, the more dominant animals could crowd out the more docile ones. Finally, if you do make a change to your ration, make sure to consult with your nutritionists.

When it comes to planning breeding, Virginia Tech’s Dr. Vitor Mercadante said, “It’s important to do everything you can to make sure cows get pregnant.” Don’t skip on the important inputs, such as those which determine conception rates.

Set your breeding dates, and if you’re using AI, pick your sires and plan your synchronizing period. There is a free spreadsheet you can use to plan estrus synchronization at beefrepro.unl.edu. Enter your dates and the protocol you’re using; the file will generate all relevant dates you need to know.

Breed your heifers first, seven – 10 days earlier than cows, Mercadante said. Studies have shown that heifers that calve within the first 21 days of the calving season will wean heavier calves and stay longer in the herd.

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