Feedlot Situation Improving Slowly

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

The September USDA-NASS Cattle on Feed report pegged September 1 feedlot inventories at 11.234 million head, 98.6 percent of last year.  August marketings were 1.885 million head, 99.6 percent of one year ago and August placements were 2.104 million head, 102.3 percent of one year earlier.  August placements and marketings were both slightly higher than average pre-report estimates but within the range of analyst forecasts.

The August placements were the largest placement total for the month since 2011.  Among major cattle feeding states, placements were largest in Nebraska, up 11 percent year over year and Colorado, up 17 percent from last year.  Meanwhile, August placements in Kansas were down 2 percent year over year and Texas placements were 90 percent of one year ago.  The weight distribution of August placements shows that the unexpected increase in placements was almost entirely in heavy weight placements.  Placements of feeders under 600 pounds were unchanged from last year and placements from 600-700 pounds were down 7.5 percent year over year.  Placements weighing 700-800 pounds were up 2.1 percent year over year and placements from 800-900 pounds were up 2.3 percent over last year.  Most dramatically, placements weighing over 900 pounds were up 15.4 percent year over year.  Placements over 900 pounds were up 21.4 percent in Nebraska, accounting for 60 percent of the total year over year increase for the heaviest weight group.

The question for several months has been when feedlots would “turn the corner” on the large fed cattle supplies and set the stage for improving fed cattle prices.  It always seems to take longer than it should.  However, there are indications that of continued progress along those lines.  It appears the feedlots are slowly getting more current.  The 12-month moving average of feedlot placements peaked recently in April, with declines since except for a slight move higher with the large August placements.  Generally declining placements implies smaller feedlot numbers eventually.  The large heavy placements in August will front-end load future production somewhat.  The 12-month moving average of marketings peaked recently in June and is moving lower in July and August suggesting that the peak feedlot production is past.  Remember back in February that the monthly feedlot inventory was the largest since February of 2006.  The inventory dropped by 8.5 percent from the February peak to a seasonal low in August.  The 12-month moving average of the feedlot inventory also peaked recently in June and is also moving lower.  The feedlot situation is slowly improving.

Going forward, the expectation is that fed cattle supplies will continue to tighten and drop below the slaughter capacity cap that has separated the fed market from beef markets.  Beef production is expected to drop in the fourth quarter and fed markets should participate more fully in the market strength.  Barring any new disruptions or “Black Swans” cattle and beef markets should get lined up in a more typical fashion and move forward with tighter supplies and continued strong demand.   Experiencing just the normal cattle market dynamics, i.e. a little “stability”, would be nice for a change.

Management Practices for Cows at Weaning: Part 3 – The Influence of Cow Size and Body Condition on Forage Intake

David Lalman, Amanda Holder, and Mark Z. Johnson, Oklahoma State University Department of Animal and Food Sciences Extension

This week we continue with a multi-part series on what information collected on cows at weaning can indicate with regard to making informed management decisions on our cowherd.  As we continue to see high temperatures and little rain across Oklahoma, forage budgeting and planning for supplementation needs are critical.  Both are impacted by cow weights and body condition scores.

In an ongoing research project at OSU, 42 registered Angus cows are being used to investigate the influence of cow size, body condition and diet quality on feed or forage intake. These cows were purposefully sourced to create a wide range in mature weight, feed intake and growth potential. In fact, cow weight ranged from 1,130 to 2,006 pounds during this experiment. The cows were split into two roughly equal groups and individual feed intake was measured for 45 days after a 14-day adaptation period. After the first period, each group’s diet was switched and after another 14-day adaptation period, feed intake was measured for an additional 45 days. We found that each 100 pounds of additional cow weight was associated with 1.4 pounds of additional daily hay intake. On the other hand, with a high-quality mixed diet, each 100 pounds of additional cow weight was associated with 1.9 pounds per day more feed consumption.  In other words, if the average of these two diets represents average annual forage quality on a ranch, a 1,400 pound cow would need about 1,861 pounds more forage dry matter each year compared to an 1,100 pound cow. This is equivalent to an additional 1.8 grazing acres per cow annually on land producing 3,500 pounds of forage and 30% harvest efficiency. If large round bales are fed to make up the difference, an additional 1.7 bales are required for the larger cows assuming 1,300 pound bales and 15% hay waste during storage and feeding.

Animal scientists have suggested for many years that fatter cows eat less feed per unit of body weight, although there is little data available to quantify this influence. Sure enough, in this study, there was a strong negative relationship between body condition score and feed intake. Interestingly, daily feed intake was reduced by 4 pounds per unit of body condition score when fed the high-quality diet and by only 1.6 pounds per unit of body condition score when fed the grass hay diet. These results simply point out that cows in thin condition can only do so much to make up for thin body condition when forage quality is low. When diet quality is high (more similar to early growing season), thin cows will be able to catch up at a much faster pace. Mother nature rides the brakes just a little when cows are fat and diet quality is low. But when diet quality is high and cows are already in good condition, she a puts a lot more pressure on those brakes.

Bottomline, knowing cows weights and body condition scores at this time of year is beneficial in cost effectively planning a our nutritional program so that cows are in optimum body condition at the beginning of calving season a few months down the road.

Making Money in the Cattle Business: Part 2 – “Keep ‘em Alive”

Paul Beck, Oklahoma State University Extension Beef Nutrition Specialist

In my last article I introduced the wisdom of my great Uncle Ed, who, when asked “How do you make money in the cattle business?”, always gave the pat answer “Buy low, sell high, keep ‘em alive, and put gain on ‘em cheap”.

Last week I covered “Buy low, sell high”. Which is true up to a point, but we often lose sight of that fact by overbidding for that fancy set of calves that comes through the sale barn, or when we buy the plain set of calves that will always be discounted.

The classic example of buying at a discount is buying the un-weaned, horned, bull calf. This is what Don Gill, the former OSU State Extension Livestock Specialist, called “mismanaged calves”. Many of us would call them “unmanaged calves” because there is no indication that the calf had ever been in a working chute for vaccination, deworming, or any other management input.

When we say “keep ‘em alive” we really mean keep them healthy. Castration and dehorning after weaning adds stress on top of the stresses of weaning, transport and marketing which can lead to reduced response to vaccination and increase susceptibility to disease. Nutritional deficiencies can reduce immune response and lead to more disease pressure (so, sometimes those thin calves may not be as great a deal as we think).

Research was conducted on Southeastern calves that entered the receiving pens as bulls or steers were tracked through receiving and grazing. These 270 calves weighed 463 at arrival. Calves that arrived as bulls and castrated during initial processing had 78% first pull bovine respiratory disease (BRD) morbidity, while steers had 50% morbidity. Bull calves had 2.5-times more 2^nd treatments and 1.7-times more 3^rd treatments for BRD. During the 42-day receiving period, calves that arrived as steers gained 1.8 pounds per day; while calves that were castrated after arrival only gained 1.2 pounds per day during receiving.

Preconditioned calves are much less stressed and more resilient to disease because they have already been through the weaning process, have been bunk broke, and vaccinated. Research comparing preconditioned calves and calves of unknown history purchased from salebarns showed the advantages of preconditioning for the buyer. Calves were managed the same after arrival at the stocker facility with a 42-day receiving period, where calves were processed and fed long-stem hay based diets. Preconditioned calves gained more than salebarn calves through receiving (2.6 vs 1.9 pounds per day). Salebarn calves had 10-times greater first pull BRD morbidity (33 vs 3.2%), 26-times more second pull BRD (26 vs 1.1%) and had more calves defined as chronically morbid. Antibiotic costs for preconditioned calves were only $2.31/head compared with $18.49/head for auction market calves, this savings alone accounts for 25 to 30% of the added cost for the certified preconditioned calf.

Animal health is one of the primary concerns for beef cattle operations. Increased health issues affect performance much further down the line than we often think. We tracked over 1,300 calves through receiving and grazing, and found that increasing BRD treatments reduced performance not only during receiving but also during subsequent grazing and finishing. So, often our goals to “Buy Low, Sell High” and “Keep ‘em Alive” run counter to each other.