COW SLAUGHTER UPDATE
Federally Inspected (FI) cow slaughter in 2006 has generally been above a year ago due to an upswing in beef cow slaughter, which in turn has pressured cull cow prices in recent weeks. This year, year-to-year increases in beef cow slaughter have mostly been due to dry conditions in the Southern Plains and southeastern regions of the U.S. Still, from a national perspective cow slaughter levels do not yet indicate a reduction in the beef cowherd.
Source: Livestock Market Information Project Web Page, 13 Jun 06.
posted by Dr. Harlan Hughes 9:00 AM[edit]
Welcome To The Special BEEF Cow-Calf, Spring 2004 Issue
14 Articles On How Ranchers Can Increase Their Beef Cow Herd's Economic Efficiency
You can access each article by clicking on its respective hot button
Welcome to the Spring 2004 Cow-Calf issue
Mar 1, 2004 12:00 PM
When BEEF editorial staff decided last fall to dedicate this annual, single-focus issue as a how-to on doing a cost-and-return analysis on the ranch enterprise,...
Bump Up Your Economic Efficiency
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
In light of the discovery of the first case of bovine spongiform encephalopathy (BSE) in the U.S., damage control has to be foremost on ranchers' minds....
The 4 Major Components
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
As market prices adjust post-BSE to an uncertain supply-demand equilibrium, ranchers will be unable to do much about their market prices. What they can...
The Importance Of UCOP
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
Beef producers traditionally have focused their beef cow management attention on physical production traits. Typically, this has meant that weaning weights...
A Look At Analysis Tools
Mar 1, 2004 12:00 PM, By Stephanie Veldman & Joe Roybal
After making the decision to do a cost-and-return analysis (CRA) on your ranch, the next step is using an analysis tool to determine the production and...
Managing For Better Or Worse
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
During the last decade, my high-profit Integrated Resource Management (IRM) cooperators demonstrated that the herds that best survive the market's volatile...
Building Learning Teams
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
Beef farmers and ranchers often find it overwhelming to synthesize all the production and financial information necessary for profitability. An Integrated...
Going Head To Head
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
A comparative analysis is the single, most powerful, farm and ranch management tool available. It's a tool that works especially well as a way to identify...
Team Management
Mar 1, 2004 12:00 PM, By Clint Peck Senior Editor
As cattle operations grow and become more complicated, ranchers admit they're often not very sure of their overall financial direction until it's too...
Net Return Is In The Details
Mar 1, 2004 12:00 PM, By Wes Ishmael Contributing Editor
Increasing the net profitability of a cow-calf operation is simple on paper. Just reduce production costs, increase pounds sold, increase the price received...
Mentors And More
Mar 1, 2004 12:00 PM, By Clint Peck Senior Editor
For several years, Brian Rosencrans, Powers Lake, ND, was a participant in the Integrated Resource Management (IRM) program offered through North Dakota...
Knowing is Growing
Mar 1, 2004 12:00 PM, By Wes Ishmael Contributing Editor
Asking and answering tough economic questions in a ranching operation isn't pleasant or easy. Just ask Mike Kelly. The first time he was out, we about...
Benchmarking An Example Herd
Mar 1, 2004 12:00 PM, By Harlan Hughes, PhD
Many ranchers feel the end product of an Integrated Resource Management (IRM) analysis is building a set of financial, economic and cash-flow numbers...
10 Years Of IRM
Mar 1, 2004 12:00 PM, By Harlan Hughes
Here are some of the lessons North Dakota learned after a decade of Integrated Resource Management (IRM) participation. Ten years ago, I promised North...
posted by Dr. Harlan Hughes 9:21 PM[edit]
Trends ... RED INK FOR CATTLE FEEDERS
The spring feeding season has been a difficult one for cattle feeders as high feeder cattle prices combined with above year ago feed grain prices and lower fed cattle prices left returns deep in the red. Red ink will continue on summer closeouts.
Since February, most slaughter steers sold lost money, with the largest losses incurred in the month of May. Based on the placement of a 750-pound steer in a Southern Plains commercial feedlot and taking into account all production costs, the estimated closeout return in May was just over a negative $153 per steer.
Two fundamental factors combined to cause large losses for May closeouts: 1) declining slaughter cattle prices, which fell below $80 per cwt. for the first time since February 2004; and 2) rather high feeder cattle prices.
Feeding-out steer calves placed into feedlots last fall also has been a red ink proposition, recently. In fact, the price ($ per cwt.) relationship between a slaughter steer price in May and a calf (500-to 600-pound steer) price the prior November was the lowest on record.
USDA began reporting western Kansas slaughter steer prices at feedlots in the early 1970's. In the last 30 years, on average the May slaughter steer price was about 90 percent of the calf price. Over the last 20 years, the "sell versus buy margin" averaged about 85 percent. Only three times in the last 30 years was that percentage under 75 percent. This year, the "sell/buy" margin at 62 percent was impossible to overcome.
Breakevens for a 750-pound steer placed into a Southern Plains feedlot during May is estimated to be about $87.00 per cwt., well above forecasted fed cattle prices for late this summer (i.e. September).
Breakeven sale prices for slaughter steers this summer and fall are below a year ago due to lower feeder cattle prices. Still, the next opportunity for positive cash cattle feeding closeouts will likely be during the fall (e.g. November or December).
Source: Livestock Monitor, Livestock Market Information Center, 10 Jun 2006
posted by Dr. Harlan Hughes 3:31 PM[edit]