The Cattle Range Home Page
Cattle Industry News
The Cattle Range Mercantile






August 18th: National Feeder & Stocker Cattle Weekly Summary

RECEIPTS: Auctions   Direct  Video/Internet    Total
This Week     148,900     41,500             0              190,400
Last Week     160,200     28,800       215,200        404,200
Last Year       151,900     40,200           800            192,900

Compared to last week, feeder steers and heifers began the week with trends mostly 5.00 to 10.00 lower.  Early-week markets had to play catch-up with the lower markets observed late last week.  However, as the week progressed, sales became mixed from 3.00 lower to 5.00 higher.  In the Southeast region, feeder markets were 1.00 to 5.00 lower.  Trade and demand was moderate, with instances of good demand reported in a few auction barns on yearling cattle as feed yards are in need of cattle to fill pen space.  There has been a larger volume of un-weaned and short weaned calves reported, with many seeing heavy discounts.  Tuesday’s CME live and feeder cattle futures put optimism into the market, encouraging feeder buyers to purchase cattle at higher prices.  However, the confidence faded as the board saw declines thereafter and cash trade for slaughter cattle saw lower prices.  Compared to last Friday, August live cattle futures ended the week 3.37 lower at 106.38 and October 1.50 lower at 105.90.  Feeder cattle futures for August were 1.27 lower at 140.50 and 2.19 lower at 140.03 for September. 

There were still noteworthy sales in the field, with the Sheridan Livestock Auction Co. in Rushville, Nebraska seeing several good strings of yearling steers, with several loads of steers weighing 890 pounds selling at an average price of 150.85.  There were also several loads of 918 pound yearling steers coming off of grass that sold at an average price of 145.30.  On Monday, Iowa traded live slaughter cattle at 110.00, setting the tone for the week.  On Wednesday, direct slaughter cattle trade broke out in Nebraska.  Dressed purchases were 8.00 to 10.00 lower from 175.00-177.00.  On Thursday, more trade occurred with dressed purchases steady with Wednesday at 175.00.  Live sales were 6.00 to 7.00 lower compared to last week from 109.00-110.00, with a few up to 110.50.  In Kansas and the Texas Panhandle, trade has been inactive on light demand.  In the Southern Plains, live purchases were 5.00 lower at 110.00. 

Weather has played a factor throughout many regions this week, with the Northern and Southern Plains seeing heavy rainfall and unseasonable cooler temperatures.  This curtailed receipts throughout both regions.  In central Nebraska, adverse weather was reported as well, with some areas receiving extensive damage from hail.  The Corn Belt may find the rain showers beneficial for their soybeans, as they are in a critical development stage.  The soybean crop rating declined 1 point, with 59 percent in the good or excellent category and 79 percent of the crop has pods set.  The corn crop rating improved 2 points, now with 62 percent rated in the good or excellent category and only 16 percent dented.  Compared to last Friday, Choice boxed-beef closed 5.31 lower at 194.29 and Select boxed-beef closed at 192.50, down 3.62.  Today’s Choice-Select spread is at 1.79.  Auction volume this week included 55 percent weighing over 600 lbs and 40 percent heifers.


August 18th: Ranchers in Parched U.S. Northern Plains Welcome Hay Lottery

Hundreds of livestock ranchers in the drought-stricken U.S. Northern Plains are embracing what organizers say is the first lottery designed to provide some much-needed relief to their operations.

The prize? Tons and tons of hay.

Ranchers in North Dakota, South Dakota and Montana have been suffering through the region's worst drought in 30 years, which has withered grazing fields, causing a severe spike in the cost of hay to feed their animals.

While the ranchers search for affordable hay, some have been selling off cattle they cannot afford to feed. If the drought persists, cattle and beef prices will rise, livestock economists said.

"Thousands of producers who have invested their lives in their operations are being financially affected by the drought. It will change how they're going to operate for the next several years in order to get through it," Greg Lardy, head of North Dakota State University's (NDSU) animal sciences department, said on Thursday.

The Dakotas and Montana represent 13 percent of the U.S. beef cow herd and 26 percent of hay acres, according to the U.S. Department of Agriculture.

In response to the drought, the North Dakota Department of Agriculture (NDDA) and NDSU helped organize a "hay lottery." Farmers can register online for a chance to win a semi-truck load of hay - roughly 30 bales. 

The lottery is the first of its kind in North Dakota, state officials said.

Participants must register by Aug. 31 and the drawing is tentatively scheduled for early September. Entry is free. Additional lotteries are possible if donations continue to pour in, officials said.


The United States is the largest producer and exporter of grass hay, the foundation of the diet for grazing animals such as cattle, according to the National Hay Association (NHA). Even so, only 4 percent of U.S. grass hay is exported, with the rest used domestically, NHA said.

The lack of adequate moisture in the Northern Plains this summer sent prices skyward.

Weston Dvorak, a rancher in Manning, North Dakota, said hay that cost him $60 per ton earlier this year is now going for $120 to $200, adding hundreds of thousands of dollars to his costs.

Dvorak has culled his 400-head beef cow herd by 10 percent after running short of the hay needed to see him through the winter. He cut some of his shriveled corn stalks and wheat for silage to help make up some of the shortfall.

Faced with the prospect of losing more of his livestock, Dvorak recently drove 300 miles (483 km) to bale hay on once federally protected conservation land, now freed up to assist struggling ranchers.

“If I didn’t come out here to make this hay, I would have to sell at least 40 percent of my cows," he said. "So it’s either sell 40 percent of my cows and do nothing all winter or come out here and fight for another day.”

NDDA Commissioner Doug Goehring estimated there are more than 800 lottery entries from the three states so far, with NDSU research farms in Fargo, North Dakota, collecting the donations.

"I hope there's 15 to 20 semi loads of hay, and if it were 100 that would even be even better," he said.


Though dry pastures have bedeviled Upper Plains ranchers, exports of U.S. hay are not expected to suffer because most of the crop is harvested closer to the U.S. East and West Coasts.

Continued drought in the Northern Plains will lead to increased culling of breeding stock that could eventually result in higher cattle and beef prices, analysts said.

NDSU's Lardy recalled how the 2012 drought, the worst in half a century, sank the U.S. cattle herd to a 63-year low two years later - driving up cattle and beef prices nationally.

"We're not there yet in terms of this drought, but continued dried conditions will lead to that eventually," he said.

Meanwhile, each passing day claims more grazing land that is scattering animals to other states to be fed, watered and in some cases ultimately processed.

North Dakota Governor Doug Burgum has declared a drought disaster, citing the state's climatologist who expects drought conditions to continue at least through late October.


August 18th: "Shootin' the Bull" Weekly Analysis
In my opinion, this weeks lower trading is perceived to be brining the major wave 2 closer to fruition than beginning a new move to the down side.  It is rare to have such a definable situation.  The hard pull on feeder cattle the first half of the year has produced numbers of fats to be marketed.  This is anticipated to make for fewer placements over the next 3 months.  Next weeks on feed report is anticipated to start reflecting this.  When this begins to materialize, it is anticipated to be exceptionally friendly towards first half of next year. 

The chart pattern on the fats is starkly different than that of feeders.  The fats appear to have made a simple zig-zag, A,B,C pattern.  Most contract months have now printed 5 waves down of the C wave as of Thursday's close from their respective July 20th high.  A close above $111.47 December will suggest the decline is complete and to anticipate a higher trade.  My analysis suggests the boat is significantly overloaded to one side.  That is perceived both in price and consensus. 

The feeder market remains the better market.  It lagged the most in the spring rally, but has held together better during this correction.  The pattern on the feeders appears to be sideways and marking time rather than a price decline.  This is perceived due to the heavy pull the first half of the year.  Were the second half of the year to begin to experience renewed demand, I would anticipate a harder pull on feeders to meet the demand.  Having some confirmation that the sale of JBS is in the works leads me to anticipate the new owners having an affiliation with China in some form.  Were this to be true, the sideways pattern would have greater importance towards it being a marking of time. 

A marking of time suggests that price superseded conditions and needed to stall while the conditions strengthen.  Conditions are anticipated to strengthen going forward.  So, with feeders having set a new low in this three week decline, or for some a new low from the contract high, they still remain elevated from contract low.  This is friendly.  Like the fats, the boat appears a little one sided.  A trade above this weeks high of $146.50 January will lead me to anticipate the major wave 2 correction complete.  I urge feed yard managers to look into owning the discount of the futures with options now.  Were the January contract to exceed $146.50, I will recommend being a buyer. 

I was so wrong on corn it wasn't even funny.  The sideways price range of corn is so entrenched that it will be more than interesting to see what traders do at $3.58 December.  A break of and it will be the first time December corn has traded out the range since being established between September of '15 to today.  Of the only positive aspect I can find with me having been so wrong was that livestock producer's won't have to worry with high feed costs for a while longer at least. 

Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @

An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.


August 18th: Closing Futures Summary
Brugler Marketing & Management LLC
Live cattle futures settled mixed Friday as nearby contracts were lower and back months higher. Aug lost 3.05% on the week, as cash trade was weaker. Feeder cattle futures were mixed as well with Aug up 2.5 cents and other front months lower. The CME feeder cattle index was 36 cents higher than the previous day at $144.80 for August 17. Wholesale beef prices were lower again in the Friday afternoon report, with choice down $1.34 at $194.29 and select boxes $1.70 lower at $192.50. The CH/SE spread is now at $1.70. Cash sales of $110-$110.50 were reported across most regions yesterday, down $5 from last week. Weekly FI cattle slaughter is estimated at 634,000 head, 7,000 fewer than last week but 32,000 larger than the same week last year. Thursday’s export sales report showed Japan, again the lead buyer at 3,000 MT, as their tariff on frozen beef was increased to 50% on Aug 1. We are assuming that these latest purchases are either fresh beef (not affected by the tariff increase) or to price elastic markets.
Lean hog futures ended the week with most front months a quarter to 80 cents lower and back months higher. Nearby Oct was down 3.64% since last Friday. The CME Lean Hog Index for 8/16 was 33 cents lower than the previous day at $83.70. The USDA pork carcass cutout value was $1.83 lower in the Friday afternoon report, with a weighted average of $90.14. The loin and picnic were slightly lower, with the rib down $8.90 and belly $10.98 lower. The national base hog carcass was down $2.06 at $73.34 in the PM report. FI hog slaughter is estimated at 2,332,000 through Saturday, 60,000 head larger than the previous week and up 37,000 from the same week in 2016.Argentina agreed to open their boarders to US pork for the first time in 25 years, with initial estimates a cautious $10 million per year. Spec traders added another 5,663 contracts to their net long position in lean hog futures and options as of Tuesday, to +81,149 contracts.
Corn futures closed Friday with most contracts 1 1/4 to 1 3/4 higher. Nearby Sep lost 2.43% on the week. Friday’s Commitment of Traders report indicated managed money backing off their net long position by another 27,271 contracts in corn futures and options trading. They had net position of +39,802 contracts as of Tuesday August 15. On Friday, China sold 494,714 MT of corn from 2013 and 2014, which was 40.25% of the more that 1.229 MMT offered. The Buenos Aires Grain exchange estimates the Argentine corn harvest at 85.4% complete.

Wheat futures saw fractional gains in most KC and CBT contracts on Friday, as their respective Sep contracts were down 6.06% and 5.29% since last Friday. MPLS was 1 1/2 to 2 3/4 cents lower on the day, with Sep down only 0.78% on the week. As of Tuesday, spec funds were reporting a net position of -34,236 contracts in Chicago wheat futures and options, 20,135 more bearish than the previous week. In KC wheat futures and options, they were shown to lower their net long position by 14,326 contracts to +34,609 contracts. BAGE lowered their Argentine wheat planting estimate to 13.22 million acres. Australia’s production is estimated at 22 MMT according to a private analyst, vs. the USDA’s 23.5 MMT. Saudi Arabia’s tender for 480,000 MT of wheat will close today.


August 17th: Multitude of Factors Impact U.S.- Australia Competition in Japan
Katelyn McCullock -- Farm Bureau Economist

In the wake of the Japanese safeguard tariff on U.S. frozen beef, discussions have focused on the relative change in tariff values that impact frozen beef. For those of you who may have missed it, Japan, beginning on August 1 temporarily increased the U.S. tariff on frozen beef imports from 38.5 percent to 50 percent until the end of the Japan’s fiscal year (March 31). Safeguard tariffs are implemented when the import volume exceeds a predetermined threshold.

This safeguard measure only affects countries without free trade agreements with Japan, which includes the U.S., Canada and New Zealand. Countries that have free trade agreements with Japan, such as Australia, will not experience a change in their negotiated frozen beef tariff levels. This is important because Japan is a major destination for U.S. beef, representing 20 percent of frozen exports and over 30 percent of fresh beef exports. USMEF estimates the tariff rate change will increase the price of U.S.-produced short plates by 17 cents per pound, an 8 percent increase. 

The U.S. is the second largest supplier to Japan, accounting for approximately 23 percent of beef consumption while Australia is closer to 35 percent according Meat and Livestock Australia Market Snapshot. The tariff change does throw salt in the wound of the U.S. backing out of TPP and highlights the need for further work to be done to maintain market access to critical U.S. markets. 

Free trade agreements offer some consistency in market access, but before we assume how much market share we will lose to Australia, we should consider all the moving parts at play. The exchange rate is a big one, but also something, that on balance hasn’t changed much in recent years. Australia has enjoyed a significant currency advantage over the last four years relative to the U.S. Figure 1 shows the Australian and U.S. dollar converted to Japanese yen. The U.S. dollar has been about 30 percent more expensive relative to Australia in 2017.  Currency exchange rates go beyond affecting a specific product.  They also fluctuate considerably, cannot be negotiated, and affect not only the relative value of currencies with trading partners but also competitors. Since Australia has enjoyed a significant currency advantage in the last four year, the launch of this safeguard further disadvantages U.S. frozen beef to Australian beef from a pricing standpoint. The Australian dollar was trading at $1.26 per U.S. dollar during the first week of August. 

The primary loss of market share is predicted to come from U.S. short plates, a product preferred in gyuden beef bowl restaurants and heavily used by Japanese consumers.  As stated above, short plate prices are predicted to rise 8 percent from the tariff increase. However, that’s not to say the value of U.S. short plates will fall to zero. Other markets could open up in the wake of Australia devoting more product to the Japanese market – creating an opportunity for the U.S. to backfill residual demand globally.

From a value perspective, short plate prices are also unlikely to fall below the price of 50 percent lean ground beef price, because there is still value in grinding the product and finding a home on the domestic market.

Japanese buyers also have the choice between chilled and frozen, as well as grass-fed beef and grain-fed. Japan is a much larger chilled market for Australia then frozen. Chilled product represents about 61 percent of the exports by value, compared to 39 percent frozen product according to Meat and Livestock Australia. On a volume basis, the division of grain to grass varies between chilled and frozen as well. About 32 percent of the chilled beef exported to Japan is grain-fed compared to only 17 percent of frozen beef over the 2016 calendar year. This means the U.S. shipped an additional 46 thousand metric tons of frozen grain-fed beef into Japan than Australia did in 2016.  Figure 2 shows the 2016 comparison of grain-fed and grass-fed trade volumes.

Trade matters are often complicated and involve far more than supply and demand of the underlying commodity.  Without question, the safeguard tariff makes U.S.-produced beef less competitive and more expensive in Japan. However, it signifies a good thing: so far during 2017, the U.S. and other countries have shipped more beef to Japan than in 2016 thereby triggering the safeguard. Year to date, U.S. exports to Japan are up 13 percent for frozen beef and 40 percent for fresh/chilled compared to last year. Variety meats are also not under safeguard measures and have also seen gains in the Japanese market. Fresh, chilled offal is up 13 percent year to date in 2017, tongues are up 22 percent, and livers are up 9 percent.

The safeguard measure is neither a positive precedent nor is it a dire setback. This safeguard is due to lift at the end of March 2018 and although fresh/chilled beef could trigger an additional safeguard measure, for now, U.S. chilled beef is enjoying a vast expansion into the Japanese market to the tune of 40 percent year to date.


August 17th:

Summer weather takes a toll on pastures during this time of the year and this year is not different. USDA currently estimates that 47% of pastures and ranges are in excellent or good condition, 4 points less than the same time last year. Current conditions still are above that 10 year average but, as with corn, one needs to recognize that the long run average includes that disastrous 2012 year when good/excellent rating dropped to under 20%. Current pasture rating is the worst since 2013. Deteriorating pasture conditions and deteriorating profit outlook could continue to put pressure on cow-calf operators, pushing calves to market earlier than expected and, in some cases, forcing producers to change their plans about expanding the beef cow herd. Low feed costs and ample hay supplies have bolstered calf supplies in the last three years. But much as we would like that to be the case, weather patterns turn and invariably this directly impacts cattle production (pastures/corn) and hog / chicken production (corn).


August Seasonal Drought Outlook

"Click Here to view a Slide Show of Drought Monitor maps for the last 12 weeks


August 16th: U.S. Trade Envoy Says NAFTA Has Failed Americans

U.S. President Donald Trump’s top trade official laid down a hard negotiating line for revamping the North American Free Trade Agreement on Wednesday, saying that major changes were needed to slash U.S. trade deficits and boost U.S. content in autos.

U.S. Trade Representative Robert Lighthizer said NAFTA had “failed many, many Americans” and Trump was not interested in merely tweaking the 23-year-old pact, and would seek major changes that would increase North American and U.S. content for autos and strong labor standards.

“We need to ensure that the huge trade deficits do not continue and we have balance and reciprocity. This should be periodically reviewed,” Lighthizer said in opening remarks at NAFTA negotiations in Washington. “The rules of origin, particularly on autos and auto parts, must require higher NAFTA content and substantial U.S. content.”


August 16th: US Beef Prices Rise in Japan as Tariff Kicks-in

JAPAN - Wholesale prices for US beef are climbing even higher in Japan, fed by the country's new additional tariff on American frozen beef as well as continued robust demand from restaurants.

Japan's emergency tariff took effect on 1 August, as the nation's quarterly import volume of US frozen beef increased in the April-June period by more than the 17 per cent threshold that triggers this safeguard mechanism.

According to Nikkei Asian Review, wholesale prices of American frozen short plate beef came to around 800 yen ($7.24) per kilogram in mid-August, rising 3 per cent from July. Prices also were up 40 per cent on the year, riding strong demand from the restaurant industry in Japan and abroad.

US beef accounts for around 40 per cent of Japan's import market. Even cheaper varieties of Japanese beef cost almost double that of US imports, and they are not used in eateries serving low-cost meals such as beef bowls.

The higher tariffs have been largely ineffective in protecting Japan's livestock farmers, failing to push retailers and restaurateurs to buy more domestic beef. Edoichi, operator of restaurant chain Stamina-Taro, may source some of its barbecued beef from Australia and Mexico, while adding more pork and chicken. Supermarkets, meanwhile, are thinking about offering fewer discounts.


August 16th: Can & Should Packers Pay More for Cattle?
Daily Livestock Report

Can beef packers pay a bit more for cattle and still be stay in the black? I think most would agree that the answer to that is yes (see chart). But that does not mean that they should do that, the same way that feedlots should not sell feds at a so called “reasonable” price, or cow-calf operators should not part with their calves at what a buyer likes to think is a “fair” price. What we should want is a market that is as frictionless as possible, free of market distorting influences. What would it take for beef packers to pay more for cattle than they are today? Better beef demand surely is a good answer. After all, excellent demand going into the spring caused packers to up their bids for cattle in order to fill large orders from retailers, foodservice operators, and foreign buyers. In the process packer margins were squeezed, albeit only for a few short weeks. 

In the short term the challenge for the market is that retail feature activity slows down after the 4th of July and it does not get a whole lot better in August either. The retail activity index for the week ending August 11 was down 8% from a year ago but in line with the five year average. Retail activity normally improves in October as retailers tend to promote more beef items before they start to fill the meat case with turkeys, hams and other seasonal items.

Feedlot currentness is also an important factor. It is no big secret that any negotiation, be this for a house, a tract of land or a lot of cattle, hinges on real and perceived leverage. Large slaughter runs in March and April caused feedlots to get extremely current with their marketings. If packers wanted to buy more cattle, they had to open their wallets and pay up enough to encourage feedlots to dig deeper into their on feed supply. Packer margins have declined from the all time record levels established in June but they are still above year ago levels. 

But before we go more into this, one point of clarification. The calculations in the chart above are simply an approximation. Every packer faces a different cost structure. In addition, not all cattle that come through the door in a given week have the same price tag. When calculating the gross margin number above, we make some generalizing assumptions and it is good to know what those assumptions are.

For one, we need to assign a price to the average price the packer paid for cattle. The average feedlot price we used was based on negotiated trade, both live and dressed, calculated at $182/cwt dressed carcass or around $115.5 live. On the revenue side, we use the comprehensive cutout value, which last week was $203.68 plus the by-product credit, last week estimated at $11/cwt live or around $151 per head. October fed cattle futures are currently trading around $109/cwt. All things being equal and assuming packers get a similar margin they are getting today, this would imply market is pricing the October comprehensive cutout at around $195. 

Last year the comprehensive cutout traded at about the same level as choice in October. The question at this point is whether cutout values will continue to come under additional pressure in September, which is a function of domestic/export sales after Labor Day. And whether feedlots manage to gain ground in terms of currentness so as to be in a better negotiating position in Q4 when holiday demand for middle meats kicks in.


August 15th: Bad News Priced into the Market?
Cassie Fish --

Perhaps CME live cattle futures have priced the bad news for now. In early trade, most active Oct LC traded down to $105.75, not far from key long-term support of $105 only to rally a fast 165 points. Not only is $105 big support, it has been the downside technical objective of many since the market topped in June. Now, the market is trading back above $107 but has yet to fully penetrate the key overhead resistance of $107.97 to $108.60.

Futures are ignoring weaker auction barn sales in the Midwest today, yesterday’s Iowa trade of $110 with time and today’s Texas bids of $110, a harsh $5 lower than last week’s average negotiated fed cattle price of $115.17.

Futures are significantly oversold, a ton of open interest has come out of the market for a month and the selling appears to have exhausted itself for now. If the board holds, closes well and builds on today’s action, then another short-term low is likely in.

This week’s kill may top last week’s 641k, which was the largest of 2017, as the market absorbs its large supply into the pipeline. Last week’s USDA Comprehensive Boxed Beef report showed the third largest volume of 2017 and a pick-up in long-term forward sales as value attracts end users, seemingly a little early this year.

It is not new news to this market that fed cattle supplies are their largest of the year or that packer has the upper hand, which is why Aug LC traded $7 under last week’s cash average. But the gate rush fueled by fear inspiring cattle feeders to avoid a fall wreck by aggressively selling cattle, will go a long way in shortening the “wall” of cattle. August weakness may turn out to be a worthy sacrifice and go a long way to cementing a Q3 low this year.


August 15th: Congress... Stop Horsing Around
Dr. William James

Dr. William James capped a 28-year career at USDA’s Food Safety & Inspection Service (FSIS) as the agency’s chief veterinarian. During his career in FSIS he worked in the offices of Field Operations, Policy, Science, and International Affairs. James supervised district offices, coordinated animal welfare enforcement throughout the country, directed ante-mortem and post-mortem inspection of livestock and poultry, implemented pathogen and residue sampling and had executive oversight of import and export issues for FSIS.

Kids of my generation grew up on a steady diet of westerns.  That’s a figure of speech.  Trigger and Silver were not for dinner. Westerns aren’t nearly as popular today, but horses still are. 

Under public pressure, Congress passed an appropriations act in 2005 that forbid FSIS from spending any of its budget to inspect horses at slaughter.  Since horses are required by the Federal Meat Inspection Act to be inspected and passed before entering commerce, slaughter of horses for meat was effectively ended in the U.S. 

USDA tried an end-run around the intent of the act by issuing a regulation permitting horse slaughter plants to pay for inspection.  But Congress wasn’t happy with that, and USDA backed off. 

Since then, the story of horse slaughter has taken some twists and turns.  Right now, the House (yea) and Senate (nay) are squabbling over resuming horse inspection. 

Since the prohibition on slaughter in the U.S., it’s estimated that over 100,000 horses are exported to Mexico and Canada each year to become meat.  That’s a long haul to meet the same end they’d have met here.

Also, thousands of horses have been abandoned since 2005 that would have been sold for slaughter.  They’ve been found emaciated, sick, and injured.  Slaughter would have been more humane.

Before the ban, virtually all of our horse meat was exported to Europe.  The Euros manufactured a scare about hormone use in cattle because they didn’t want U.S. beef.  But, real residue problems in horses were ignored because the French in particular coveted our “viande chevaline.”  And, news of criminal convictions in Europe over the past few years reveals horse meat is a cheap substitute for beef.

If Congress permits the resumption of horse slaughter in the United States, it will be a difficult start-up.  For one thing, companies will need to make investments in an industry that could be defunded again in a few years.

For another, horses aren’t raised for meat.  FSIS recognized that horses had the highest level of residue violations of all the slaughter classes.  As we were looking at regulatory options, Congress made further considerations unnecessary with the ban.  If horse slaughter resumes, expect FSIS to take a stronger regulatory posture than before the ban.

So, the abandonment and misery of horses will continue in this country.  Economic uncertainty due to the whims of Congress, and tight regulatory enforcement by FSIS cloud the future of horse slaughter in the United States if the “yeas” have it.  Shipment of live horses over long distances to other countries for slaughter will continue if the “nays” have it.

It doesn’t matter whether the House or Senate wins, because the “neighs” will continue to lose.


August 15th: Weekly Corn Crop Condition Report


August 15th: BQA Reports Improvement in Cattle Branding

In 2016, nearly three quarters of all harvested steer and heifer beef animals did not contain any hot-iron branding marks.

According to the report, in 2016, most of the cattle branding was located on the butt of the animal; the hide and leather industry’s preferred location for branding. “The positive findings in the recent Beef Quality Assurance (BQA) report are a testament to the U.S. cattle industry’s concerted efforts to improve producer value and returns to all sectors of the beef industry,” said Stephen Sothmann, President, USHSLA. “The data reveals a major shift in the U.S. beef herd as U.S. cattle producers have become increasingly aware that their branding decisions can have a major impact on the overall economic value of the animal”, he added.

According to the BQA report, 74.3% of cattle had no brand, meaning a marked improvement from the 55.2% in 2011 and compared with the 55% of non-branded cattle back in 1991, when the first report was issued. Also, the number of cattle with multiple brands is reported to have fallen from 9.9% in 2011 to 1.6% in 2016. The number of hides with “side brands” (located on the side, shoulder or rib cage area of the animal) decreased from nearly 14% in 1991 to 6% in 2016. Side brands often pose challenges to tanners, as their location reduces the available portion of the hide that can be used to produce leather.

The difference in brand locations affects the overall economic value of the animal. No brands on the hide will garner the highest price per head while, on average, butt brands are US$1-2 per piece lower, and side branded hides can be range from US$10-12 lower. The BQA report, which captures the lost value of branding practices by the U.S. cattle industry, estimates that producers lost nearly US$1 dollar per head in 2016 as a result of branding practices, however, due to increased awareness by cattle producers, the value lost is reported to have shrunk from US$2.43 per head since the first BQA report in 1991.

The U.S. hide and leather industry exports approximately 95% of all hides that are produced in any given year. In 2016, this represented a total market value of over US$2 billion, with China being the largest buyer; importing nearly 60% of all hides produced. 


August 14th: Searching for the Seasonal Lows
Ag Center Cattle Report

A lot of time has been spent by a lot of people analyzing the seasonal patterns for cattle prices. Studies of the spring highs and the summer lows keep market participants guessing and the forecasters predicting, but observers note, with little success from either party. This week's decline in fed prices was a reminder of how vulnerable the market can be to weakness in price. Those who believed the market would hang in the high teens/low 120s for the balance of the year are now looking at a price level that could find prices $5 under last year by next week and closeouts deep in the red soon after.

The industry as a whole is much more protected this year with many, fearing a decline from increasing numbers of cattle on feed, are short the board. It is likely over half of the live segment of the industry is fully hedged, leaving the balance divided between partially hedged and some who are open. Breakevens are working higher from this point forward and many of the cattle to close for the balance of the year have breakevens from $115-125 - a far cry from the $107 posted on the October live cattle contract.

The question on all minds is how low can it go?  The answer will rest with two primary factors -- carcass weights and beef demand. Carcass weights are currently 8# under last year but rising faster than last year and are expected to match last year's record number soon. Total beef tonnage is key to maintaining the important supply/demand balance. Cow slaughter is up +10% and expected to remain above last year. Continued declines in cattle prices will certainly encourage more cow culling this fall.

Beef demand has been good all year. Exports have exceeded prior year's numbers throughout the year but warning signs are on the horizon. The U.S. producers refuse to support National ID and this costs us foreign sales every day. Japan, our largest trading partner, has increased tariffs. Imports are likely to increase as Australia rebuilds its herd following a drought. Domestically, unemployment is down and people are active buying beef and protein is increasingly popular in the diet.

Beef packers are positioned to get more than their fair share of the margins available to beef production because slaughter capacity is currently quite low when compared to the increasing size of the herd. The industry needs to see a new beef plant or the reopening of an old beef plant. Competition will help keep margins across all sectors in line.

Finally, the CME will play a role in price and production. Premium deferred cattle contracts will cause more holding at the feedyard level hoping for a better basis and taking cattle to heavier weights. Discounted futures serve the opposite effect. It will encourage earlier marketings. October will soon become the spot month and is trading $8 under this week's cash -- a good reason to pull sales forward.


August 10th: USDA Crop Production Report Sends Grain Lower

Corn Production Down 7 Percent from 2016
Soybean Production Up 2 Percent from 2016
Cotton Production Up 20 Percent from 2016
Winter Wheat Production Up 1 Percent from July Forecast

  • Corn production is forecast at 14.2 billion bushels, down 7 percent from last year. Based on conditions as of August 1, yields are expected to average 169.5 bushels per acre, down 5.1 bushels from 2016. If realized, this will be the thirdhighest yield and production on record for the United States. Area harvested for grain is forecast at 83.5 million acres, unchanged from the June forecast but down 4 percent from 2016.
  • Soybean production is forecast at 4.38 billion bushels, up 2 percent from last year. Based on August 1 conditions, yields are expected to average 49.4 bushels per acre, down 2.7 bushels from last year. Area for harvest in the United States is forecast at a record high 88.7 million acres, unchanged from the June forecast but up 7 percent from 2016. Planted area for the Nation is estimated at a record high 89.5 million acres, also unchanged from June.
  • All cotton production is forecast at 20.5 million 480-pound bales, up 20 percent from last year. Yield is expected to average 892 pounds per harvested acre, up 25 pounds from last year. Upland cotton production is forecast at 19.8 million 480-pound bales, up 19 percent from 2016. Pima cotton production is forecast at 770,000 bales, up 35 percent from last year.
  • All wheat production, at 1.74 billion bushels, is down 1 percent from the July forecast and down 25 percent from 2016. Based on August 1 conditions, the United States yield is forecast at 45.6 bushels per acre, down 0.6 bushel from last month and down 7 bushels from last year.
Buoyant US crop supply hopes send corn, soy, wheat prices lower

Corn, soybean and wheat futures tumbled after US officials, in a much-anticipated briefing, pegged domestic supplies of all three crops above market expectations – with world wheat supplies supported too by a huge upgrade to Russia's harvest.

Corn futures for December tumbled 2.6% to $3.76 ¼ a bushel in Chicago, where soybean futures for November stood down 2.3% at $9.51 a bushel.

Wheat futures for September dropped 2.0% to $4.50 ¼ a bushel in Chicago, and by 2.6% to $7.15 ¼ a bushel in the Minneapolis exchange, which trades the spring wheat which has been particularly closely watched by investors thanks to dryness in major growing regions in the US and Canada.

The declines followed crop estimates in the US Department of Agriculture's monthly Wasde report on world crop supplies and demand which reversed ideas of a drop in world soybean supplies in 2017-18, and lifted expectations for the rise in wheat inventories.

In corn, the estimate for US stocks at the close of 2017-18 was reduced, but by far less than investors had expected.

Corn resilience

Indeed, rather than cutting its estimate for the US corn yield by 2.5 bushels per acre, as investors had expected after a dry July for much of the Midwest, the USDA downgraded the forecast by a modest 1.2m bushels per acre, to 169.5 bushels per acre.

While South Dakota, Iowa, Minnesota, and Illinois "are forecast to have yields below a year ago… the projected yield for Indiana is unchanged relative to last year, while Nebraska and Ohio are forecast higher", the USDA said.

While the yield reduction translated into a harvest downgrade of some 100m bushels, the cut was offset in part by a drop in expectations for corn exports and for domestic feed use of the grain.

Although the US corn inventory forecast for the close of 2017-18 was downgraded by 50m bushels to 2.27bn bushels, that was well above the 2.00bn-bushel figure the market had expected.

Surprise upgrade

For soybeans, the USDA actually increased its domestic yield estimate, by 1.4 bushels per acre to 49.4 bushels per acre, rather than cutting it to 47.5 bushels per acre as traders had forecast.

While some of the extra soybeans were seen being used up by increased export prospects, thanks to "lower prices", the upgrade translated into a 15m-bushel increase to 475m bushels in the estimate for US soybean inventories at the close of 2017-18.

That was 50m bushels more than investors had expected.

The upgrade fuelled a 4.3m-tonne hike to 97.8m tonnes in the estimate for world soybean inventories at the close of 2017-18, well ahead of market forecasts.

'Outstanding conditions'

For wheat, meanwhile, although the estimate for US output in 2017-18 was cut by 21m bushels, that was less than 50m-bushel downgrade that the market had expected.

Figures for both winter and spring wheat came in ahead of investors' forecasts.

And global supply prospects received a mammoth boost from an 8.6m-tonne hike to a record 77.5m tonnes in the forecast for Russian wheat output this year.

The USDA flagged official Russian reports of "high winter wheat yields in the Southern, North Caucasus, and Central Districts of Russia.

"In addition, satellite imagery indicates outstanding conditions and high potential yields in the country's spring wheat zone, including the Siberian, Ural, and Volga Districts."


August 10th: USDA World Agricultural Supply & Demand Estimates

LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2017 is raised from last month, as increases in commercial beef and broiler production more than offset declines in pork and turkey production. The increase in beef production reflects relatively large cattle placements in the second quarter which will likely impact fourth quarter cattle slaughter. Second quarter broiler production is raised slightly based on June production data, but no change is made to the outlying quarters. Pork production is reduced on lower expected slaughter in the third quarter. Forecast turkey production is reduced on a slower-than-expected recovery in demand and relatively poor returns to producers. Egg production is increased modestly on recent hatchery data. For 2018, the beef production forecast is raised from the previous month, as expected higher placements in late 2017 and early 2018 result in higher steer and heifer slaughter. Pork, poultry, and egg production forecasts for 2018 are unchanged from the previous month. 

For 2017, beef imports are raised, as higher-than-expected shipments of lean processing beef from Oceania in June are expected to carry into the third quarter. The beef export forecast is lowered from last month on recent trade data and an expected slowdown in global demand for the remainder of 2017. Pork imports are raised slightly on recent trade data. The second quarter pork export forecast is adjusted for June data, but the forecast for the remainder of the year is unchanged. The broiler export forecast is reduced on weak foreign demand. Turkey exports are adjusted to reflect June data. For 2018, the beef import forecast is unchanged from the previous month while exports are lowered slightly. Pork, poultry, and egg trade forecasts are unchanged from the previous month. 

Fed cattle prices are reduced in 2017 and 2018 as current prices have weakened and larger expected supplies of fed cattle are expected to pressure prices. Hog price forecasts are raised for 2017 and 2018 on continued strength in demand. The annual broiler price forecast for 2017 is raised, but the price forecast for 2018 is unchanged. The turkey price forecasts for 2017 and 2018 are lowered on slow recovery in demand. The egg price forecast for 2017 is raised, but no changes are made to the 2018 price forecast. 

The milk production forecasts for 2017 and 2018 are reduced from the previous month as slow growth in milk per cow more than offsets increases in dairy cow numbers. For 2017, fat basis exports are raised from the previous month on higher butter and anhydrous milk fat shipments. Fat basis imports are unchanged. The skim-solid basis export forecast for 2017 is lowered on weaker than expected whey sales. The import forecast is unchanged. For 2018, fat basis exports are raised on stronger shipments of a number of dairy products. Fat basis imports are lowered slightly. Skim-solid basis exports are raised on expected stronger  WASDE-568-5 sales of nonfat dry milk (NDM) and other dairy products while imports are unchanged from last month. 

Butter and cheese price forecasts are raised for 2017 and 2018 as demand strength is expected to carry into 2018. The 2017 and 2018 NDM and whey price forecasts are reduced from the previous month on weak demand. The 2017 Class III price forecast is unchanged at the midpoint, but the 2018 price is lowered as lower whey prices more than offset higher cheese prices. Class IV price forecasts for 2017 and 2018 are raised as stronger forecast butter prices more than offset lower NDM prices. The all milk price is raised to $17.80 to $18.00 per cwt for 2017, but is unchanged at $18.00 to $19.00 per cwt for 2018.

WHEAT: Projected 2017/18 U.S. wheat supplies are decreased this month on lower production, down 21 million bushels to 1,739 million. The August NASS production forecasts for durum and other spring wheat indicated a significant decline compared to last year, primarily due to continued severe drought conditions affecting the Northern Plains. Partially offsetting this decrease is higher winter wheat production, on increased yields, with most of the production increase for white wheat. Food use estimates for both 2016/17 and 2017/18 are reduced, based primarily on the August 1, NASS Flour Milling Products report. The other wheat usage categories for 2017/18 are unchanged this month. Projected 2017/18 ending stocks are decreased 5 million bushels to 933 million. The 2017/18 season-average farm price is unchanged at the midpoint of $4.80 per bushel and the projected range remains at $4.40 to $5.20.

Global 2017/18 wheat supplies increased significantly, primarily on an 8.6-million-ton production increase in the Former Soviet Union (FSU). Russian production is a record 77.5 million tons, surpassing last year’s record by 5.0 million. Winter wheat yields are forecast higher for both Russia and Ukraine, based mainly on harvest results to date. Additionally, spring wheat conditions have remained very favorable for both Russia and Kazakhstan, resulting in higher production forecasts. Canadian wheat production is reduced 1.9 million tons to 26.5 million on the increasing intensification of drought conditions in major production areas of the Prairie Provinces. The increased FSU production more than offsets reduced production forecasts in Canada, EU, and U.S., raising 2017/18 global production by more than 5.0 million tons to 743.2 million.

Foreign 2017/18 trade is increased on higher exports for Russia, Ukraine, and Kazakhstan more than offsetting reductions in Canada and EU. Projected imports are raised for several countries, led by Indonesia and Nigeria. Total world consumption is projected higher, primarily on greater usage by Russia, Indonesia, and Nigeria. Projected global ending stocks are 4.1 million tons higher this month at 264.7 million, which is a new record.

COARSE GRAINS: This month’s 2017/18 U.S. corn outlook is for lower supplies, reduced feed and residual use and exports, and a decline in ending stocks. Corn production is forecast at 14.2 billion bushels, down 102 million from the July projection. The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 1.2 bushels lower than last month’s trend-based projection. This month’s Crop Production report indicates that South Dakota, Iowa, Minnesota, and Illinois are forecast to have yields below a year ago. The projected yield for Indiana is unchanged relative to last year, while Nebraska and Ohio are forecast higher. Sorghum production is forecast 13 million bushels higher with the forecast yield 2.6 bushels per acre above last month’s projection. 

Projected feed and residual use for 2017/18 is lowered 25 million bushels on a smaller crop. Exports are forecast down 25 million bushels, reflecting the increased competitiveness of supplies in Argentina and Brazil and the low level of new-crop outstanding sales. With supplies falling faster than use, ending stocks are reduced 52 million bushels. The projected range for the season-average corn price received by producers is unchanged at $2.90 to $3.70 per bushel.

This month’s 2017/18 foreign coarse grain outlook is for virtually unchanged production, lower trade, and greater stocks relative to last month. EU corn and barley production are reduced. Canada corn production is down on lower projected harvested area. Corn and barley production forecasts are raised for Russia based on higher corn area and favorable growing conditions for barley. Ukraine corn production is unchanged as a reduction in projected yield is offset by increased area. For 2016/17, corn production is increased for Brazil based on second crop corn harvest results to date.

Major global corn grain trade changes for 2017/18 include corn export reductions for the EU, Serbia, and Canada. More than offsetting are increases for Ukraine and Russia. Brazil’s corn exports are raised for 2016/17 based on record-high shipments observed for the local marketing year beginning in March 2017. Corn imports for 2017/18 are raised, mostly reflecting increases for the EU and Iran. Foreign corn ending stocks are raised from last month. Historical revisions are made to corn stock estimates for Ukraine to better reflect statistics published by the government.


August 2nd: Calf & Yearling Prices: Mid-year Review and Outlook
Livestock Marketing Information Center 

At mid-year, U.S. calf and yearling prices were similar to a year ago, but had rebounded strongly from the dismal market of October and November 2016. Underpinning higher prices was stronger than expected fed cattle prices and profits posted by cattle feeders. In the Southern Plains, yearling prices (700- to 800-pound steers) averaged below a year earlier during the first three months of 2017 and essentially equal to 2016’s for the second quarter. Calf prices (500-to 600-pound steers) were more than $30.00 per cwt. below 2016’s in the first quarter of this year, but in the second quarter posted a year-over-year decline of only $3.40 per cwt.

If fed cattle prices remain above a year ago for the balance of 2017, look for that to support calf and yearling prices compared to a year ago, too. Of course, prices last year were very depressed. Nationally, LMIC is currently forecasting that yearling prices will be at or above a year ago for the balance of 2017. Current quarter (July-September) calf prices are likely to be unchanged to higher, compared to 2016’s. In 2017’s the fourth quarter, Southern Plains calf prices (500- to-600 pound steers) are currently forecast to be $8.00 to $12.00 per cwt. above 2016’s.

Three usual drivers of calf and yearling prices in 2018 will likely be at play: 1) fed cattle prices; 2) size of the calf crop; and 3) feedstuff costs. Larger domestic supplies will likely pressure fed cattle prices lower compared to this year’s. How much prices slip depends mostly on beef demand, both domestic and foreign. Currently, LMIC is forecasting the annual average fed steer price in 2018 will be 2% to 6% below 2017’s. The 2017, U.S. calf crop was bigger than 2016’s, and 2018’s will increase, again. Feedlots and backgrounders could face higher feedstuff costs in 2018 which may provide some additional headwind to prices. For planning purposes, look for some erosion in calf and yearling prices in 2018 compared to 2017’s. 


July 24th: USDA Cold Storage Report

As of June 30th, 2017

Total red meat supplies in freezers were down 3 percent from the previous month and down 7 percent from last year.

  • Total pounds of beef in freezers were up 1 percent from the previous month but down 10 percent from last year. 
  • Frozen pork supplies were down 5 percent from the previous month and down 4 percent from last year. 
  • Stocks of pork bellies were down 29 percent from last month and down 65 percent from last year.
  • Total frozen poultrysupplies were up 4 percent from the previous month and up 4 percent from a year ago. 
  • Total stocks of chicken were up 3 percent from the previous month but down 1 percent from last year. 
  • Total pounds of turkey in freezers were up 7 percent from last month and up 12 percent from June 30, 2016.

July 21st: USDA Mid-Year Cattle Inventory Report

July 1 Cattle Inventory Up 4 Percent from 2015

  • All cattle and calves in the United States, as of July 1, 2017, totaled 103 million head. This is 4 percent above the 98.2 million head on July 1, 2015.
  • All cows and heifers that have calved, at 41.9 million head, are 5 percent above the 39.8 million head on July 1, 2015.
    • Beef cows, at 32.5 million head, are up 7 percent from two years ago.
    • Milk cows, at 9.40 million head, are up 1 percent from 2015.
  • All heifers 500 pounds and over, as of July 1, 2017, totaled 16.2 million head. This is 3 percent above the 15.7 million head on July 1, 2015. 
    • Beef replacement heifers, at 4.70 million head, are down 2 percent from two years ago. 
    • Milk replacement heifers, at 4.20 million head, are unchanged from 2015. 
    • Other heifers, at 7.30 million head, are 9 percent above two years earlier.
  • Calves under 500 pounds in the United States, as of July 1, 2017, totaled 28.0 million head. This is 5 percent above the 26.7 million head on July 1, 2015. 
    • Steers weighing 500 pounds and over totaled 14.5 million head, up 3 percent from two years ago.
    • Bulls weighing 500 pounds and over totaled 2.00 million head, up 5 percent from 2015.
  • Calves under 500 pounds in the United States, as of July 1, 2017, totaled 28.0 million head. This is 5 percent above the 26.7 million head on July 1, 2015. Steers weighing 500 pounds and over totaled 14.5 million head, up 3 percent from two years ago. Bulls weighing 500 pounds and over totaled 2.00 million head, up 5 percent from 2015.
Calf Crop Up 3 Percent from 2016
  • The 2017 calf crop in the United States is expected to be 36.3 million head, up 3 percent from last year's calf crop and up 6 percent from 2015. Calves born during the first half of 2017 are estimated at 26.5 million head. This is up 4 percent from the first half of 2016 and 8 percent above 2015. An additional 9.80 million calves are expected to be born during the second half of 2017.
  • Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 12.8 million head on July 1, 2017. The inventory is up 6 percent from the July 1, 2015 total of 12.1 million head. Cattle on feed, in feedlots with capacity of 1,000 or more head, accounted for 84.5 percent of the total cattle on feed on July 1, 2017. This is down 0.1 percent from 2015. The combined total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots) is 37.0 million head. This is 5 percent above the 35.4 million head on July 1, 2015. 

July 21st: Cattle on Feed Report
United States Cattle on Feed Up 4 Percent
  • Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.8 million head on July 1, 2017. The inventory was 4 percent above July 1, 2016. The inventory included 6.96 million steers and steer calves, up 1 percent from the previous year. This group accounted for 64 percent of the total inventory. Heifers and heifer calves accounted for 3.86 million head, up 11 percent from 2016.
  • Placements in feedlots during June totaled 1.77 million head, 16 percent above 2016. Net placements were 1.71 million head. During June, placements of cattle and calves weighing less than 600 pounds were 375,000 head, 600-699 pounds were 315,000 head, 700-799 pounds were 430,000 head, 800-899 pounds were 385,000 head, 900-999 pounds were170,000 head, and 1,000 pounds and greater were 95,000 head.
  • Marketings of fed cattle during June totaled 1.99 million head, 4 percent above 2016. 
  • Other disappearance totaled 56,000 head during June, 8 percent below 2016. 
  • United States All Cattle on Feed Up 6 Percent from 2015 Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 12.8 million head on July 1, 2017. The inventory was up 6 percent from the July 1, 2015 total of 12.1 million head. Cattle on feed in feedlots with capacity of 1,000 or more head, accounted for 84.5 percent of the total cattle on feed on July 1, 2017. This is down 0.1 percent from 2015.
. .

Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of July 1st
Millions of Head

Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in June
Millions of Head

Number of Cattle Marketed from 1,000+ Capacity Feedlots in June
Millions of Head

Cattle on Feed by State as of July 1st

July 20th:  Fed Cattle Market - Mid-Year Review
Livestock Marketing Information Center

In the first quarter of this year, the 5-market slaughter steer price was 8.8% below 2016’s. Slaughter steers averaged above a year ago (up 4.0%) in the second quarter. Those were stronger prices than forecast in late 2016. It appeared that the cash market price was topping out in mid-March when the weekly 5-market average hit $130.91 per cwt. (live basis) and prices did erode for a few weeks. Then they surged higher. The weekly peak was $144.60, which was posted the first week of May.  By the last week of June the price had fallen to $118.64 per cwt. 

Steer and heifer slaughter levels have been larger than expected so far this year, while carcass (dressed) weights have been much lower than anticipated. Very strong beef packer profits made packers aggressive buyers of slaughter ready animals and cattle feeders were willing sellers.

U.S. commercial cattle slaughter in the first quarter was 7.3% above 2016’s. Average cattle dressed weight declined 1.1% year-over-year, so beef production was 6.1% above a year ago. The trend of higher slaughter levels compared to a year earlier and lower dressed weights continued in the second quarter (slaughter up 5.8% and dressed weight dropped 2.2% year-over-year). In the second quarter, U.S. beef production was up 3.4% from 2016’s. For the first half of 2016, commercial beef output was just over 12.7 billion pounds, which was the largest for the first six months of a calendar year since 2012.

Due to strong beef exports and declining imported beef tonnage, U.S. per capita beef disappearance in the first two quarters of this year in percentage terms grew much less than production. Year-over-year, per person disappearance was up 3.3% in the first quarter and the LMIC projects the second quarter will be up only 0.7%.

The LMIC is forecasting U.S. commercial beef production will increase 2% to 3% in the second half of 2017. In 2018, year-over-year quarterly production increases in the 3% to 5% range are currently forecast. If strong beef exports continue to absorb most or all of the increase in per capita domestic supply, look for fed cattle prices to remain above a year ago for the balance of 2017. In 2018, larger domestic supplies will likely pressure prices lower compared to this year.

U.S. Exports of Beef & Pork Remain Strong

U.S. red meat export tonnage continued to post year-over-year increases in the latest data compiled by USDA, which is for the month of May. In their World Agriculture Supply and Demand Estimates, USDA is forecasting that both beef and pork exports (carcass weight) this calendar year will set new record highs.

Beef export tonnage during May was 3.2% above a year ago. For the first five months of 2017, U.S. beef export tonnage surged 19.5% year-over-year to nearly 1.1 billion pounds (carcass weight equivalent).That slightly eclipsed the prior high for January-May set in 2011.

Pork export tonnage in May was 12.3% above 2016’s and year-to-date increased 12.1%. At over 2.4 billion pounds (carcass weight), U.S. pork exports so far this year were the largest ever for the January-May timeframe (increased 3.0% from the prior high set in 2012). 


July 20th: USDA Livestock Slaughter Report

Record Total Red Meat and Pork Production for June

Commercial red meat production for the United States totaled 4.35 billion pounds in June, up 3 percent from the
4.23 billion pounds produced in June 2016.

Beef production, at 2.28 billion pounds, was 4 percent above the previous year. Cattle slaughter totaled 2.86 million
head, up 6 percent from June 2016. The average live weight was down 13 pounds from the previous year, at
1,321 pounds.

Veal production totaled 6.3 million pounds, 1 percent below June a year ago. Calf slaughter totaled 40,400 head, up
7 percent from June 2016. The average live weight was down 23 pounds from last year, at 268 pounds.

Pork production totaled 2.05 billion pounds, up 2 percent from the previous year. Hog slaughter totaled 9.87 million
head, up 3 percent from June 2016. The average live weight was down 1 pound from the previous year, at 279 pounds.

Lamb and mutton production, at 12.4 million pounds, was down 7 percent from June 2016. Sheep slaughter totaled
188,000 head, 4 percent below last year. The average live weight was 132 pounds, down 4 pounds from June a year ago.

January to June 2017 commercial red meat production was 25.4 billion pounds, up 4 percent from 2016.

Accumulated beef production was up 5 percent from last year, veal was down 2 percent, pork was up 3 percent from last year, and lamb and mutton production was down 5 percent. 


July 13th: Drought Likely to Worsen in the Northern Plains
Successful Farming

The Midwest is dividing into three regions as the growing season continues this summer, and it appears these divisions will grow more prominent throughout the summer.

The areas are:

  • The northern Plains, including the Dakotas and Montana, where hot, dry weather has caused a drought that ranges from moderate to extreme. Shown at right, the soybeans in Wilmot, South Dakota, are thirsty for a rain.
  • The west, south-central Midwest – eastern Nebraska, southern Iowa, and southern Illinois – where dry conditions are being picked up on the drought monitor and some areas are beginning to move into a moderate drought.
  • The northeastern Midwest, spanning from Minnesota, down through Iowa, and across Illinois into Indiana, where growing conditions are much more favorable.

“The rains this week have gone a long way in improving soil moisture in a lot of places,” says Dan Hicks, meteorologist at Freese-Notis Weather.

While most of the Midwest is going to get some precipitation, there are a few places that will be left out or only get minimal amounts, including southwest Minnesota, northwest Iowa, northeast Nebraska, and southeast South Dakota.

Rain chances during the next 48 hours are greatest for Indiana, Ohio, and southern Michigan, where .5 to 1.5 inches are forecast. “As you move farther west, the amounts tend to be lighter and more spotty,” says Hicks. “There is still the possibility for some beneficial amounts in drier pockets of Iowa, eastern Nebraska, and the southern half of Illinois.”


As the drought monitor has been updated each week this summer, the yellow patch indicating dry conditions has continued to creep across Montana, North Dakota, and South Dakota as the center has turned darker and darker. Unfortunately for farmers in these states, it doesn’t look like this will improve anytime soon.

“It’s hard to imagine this getting better based on what the weather looks like,” says Hicks. “I think the drought index will show worsening conditions through late July.”

For the rest of this month, the forecast is continuing to indicate below-normal rainfall combined with above-normal temperatures, says Hicks. “There will be periods when hot weather flairs up for three to four days and then cools back down,” he says. “I don’t see much opportunity for the spring wheat crop to improve up there.”

The condition of spring wheat in this area is already significantly behind other states. For the northern Plains, North Dakota brings up the lead with 36% in good-to-excellent condition, Montana 11%, and South Dakota with only 10%, according to the USDA’s weekly crop progress report. By comparison, 85% of Minnesota’s spring wheat is in good-to-excellent condition.

The North Dakota/Minnesota border has picked up some rain in the past 24 hours. In addition, this region will have a slightly cooler temperature pattern with slightly better chances for rain moving forward.

While conditions in the Northern Plains do look to be a littler cooler and wetter in August than they will be for June/July, Hicks cautions against being too optimistic. “There will be a slight improvement, but that isn’t saying much. I’d be really hesitant to say growing conditions would improve much,” he says.


The areas with the greatest danger of stressful conditions for corn and soybean conditions – based on insufficient rainfall and the number of days where temps pass 90°F. – appear to be southwestern Minnesota, eastern Nebraska, parts of western and southern Iowa, eastern Kansas, Missouri, and the southern half of Illinois. “Given the soil moisture situation currently, these areas may not get enough rain to keep up with crop needs,” says Hicks, adding that the areas may receive some, just not enough, rainfall.

Moving farther north and east, Mother Nature will please farmers with more favorable growing conditions. “These areas had better rains this week, soil moisture is better, and they will have fewer days of high temperatures,” explains Hicks.


2016 Livestock Slaughter Summary

Record High Total Red Meat and Pork Production in 2016

Total red meat production for the United States totaled 50.5 billion pounds in 2016, 4 percent higher than the previous year. Red meat includes beef, veal, pork, and lamb and mutton. Red meat production in commercial plants totaled 50.4 billion pounds. On-farm slaughter totaled 93.2 million pounds.

  • Beef production totaled 25.3 billion pounds, up 6 percent from the previous year. 
  • Veal production totaled 81.0 million pounds, down 8 percent from last year. 
  • Pork production, at 25.0 billion pounds, was 2 percent above the previous year.
  • Lamb and mutton production totaled 155.4 million pounds, down slightly from 2015.
Commercial cattle slaughter during 2016 totaled 30.6 million head, up 6 percent from 2015, with federal inspection comprising 98.5 percent of the total. The average live weight was 1,363 pounds, up 3 pounds from a year ago. Steerscomprised 54.8 percent of the total federally inspected cattle slaughter, heifers 25.6 percent, dairy cows 9.6 percent, other cows 8.4 percent, and bulls 1.6 percent.

Commercial calf slaughter totaled 487,700 head, 8 percent higher than a year ago with 98.4 percent under federal inspection. The average live weight was 266 pounds, down 44 pounds from a year earlier.

Commercial hog slaughter totaled 118.2 million head, 2 percent higher than 2015 with 99.3 percent of the hogs slaughtered under federal inspection. The average live weight was down 1 pound from last year, at 282 pounds. Barrows and gilts comprised 97.3 percent of the total federally inspected hog slaughter.

Commercial sheep and lamb slaughter, at 2.24 million head, was up 1 percent from the previous year with 89.8 percent by federal inspection. The average live weight was down 2 pounds from 2015 at 134 pounds. Lambs and yearlings comprised 94.6 percent of the total federally inspected sheep slaughter.

There were 814 plants slaughtering under federal inspection on January 1, 2017 compared with 808 last year. Of these, 650 plants slaughtered at least one head of cattle during 2016 with the 13 largest plants slaughtering 58 percent of the total cattle killed. 

Hogs were slaughtered at 621 plants, with the 13 largest plants accounting for 60 percent of the total.

For calves, 3 of the 200 plants accounted for 46 percent of the total and 3 of the 531 plants that slaughtered sheep or lambs in 2016 comprised 54 percent of the total head.

Iowa, Kansas, Nebraska and Texas accounted for 49 percent of the United States commercial red meat production in 2016, unchanged from 2015


March 22nd: Post-Wildfire Reality Sinks in for High Plains Ranchers
Sherry Bunting -- Progressive Cattleman

“The overwhelming reality of it all is sinking in,” said Greg Gardiner of Ashland, Kansas, in a phone interview 10 days after the Starbuck fire – which had consumed over 300,000 acres in Oklahoma and nearly 500,000 acres in southwest Kansas – claimed 43,000 of the 48,000 acres at Gardiner Angus Ranch.

Officials are calling the Starbuck fire the largest single fire in Kansas state history. Additional wildfires on the same day brought the state total to 650,000 acres burned.

All told, multiple windswept wildfires on March 6 burned close to 2 million acres of grasslands and left a deadly trail of crippling losses in four states.

Preliminary livestock loss estimates for Kansas, Oklahoma, Texas and Colorado are approaching 7,000 to 9,000 adult cows and untold numbers of calves, horses and wildlife. These numbers are expected to increase in the weeks ahead as more cattle are located and those with less severe injuries are monitored and may not recover.

Tragically, some of the affected ranching families suffered the ultimate loss of loved ones. Seven people lost their lives, at least five while trying to herd cattle to safety before becoming trapped in the rapidly moving fire when the high winds changed direction.

It was the perfect storm when the red flag day dawned in the High Plains. The 60 to 70 mph winds drove multiple fast-moving fires that found abundant fuel in the grasslands that had previously benefited from two years of good moisture before turning tinder-dry over the past 60 days.

In fact, the Starbuck fire was so fast and intense that even where fence appears to be standing, the wood at ground level is disintegrated. In Kansas, alone, an estimated 12,000 miles of fence will eventually need to be replaced. The priority is perimeter fencing, so materials and fencing crews are needed.

With severe losses of grazing land and stockpiled hay, another immediate concern is feeding the estimated 25,000 to 30,000 surviving cattle in the affected areas of the four states for the next 30 to 60 days while ranchers deal with the recovery while finishing out the calving season before they can take stock of their positions and make decisions about their futures.

The toll of survival

While Gardiner Angus Ranch lost 500 adult cows – mainly donor cows for fall breeding and spring calving females on grass – the 1,500 cattle on wheat pasture and those gathered for their April 1 production sale were not affected. Gardiner estimates they have lost 300 calves. All of their stored hay is gone – 5,000 round bales and 3,000 bales of horse hay – despite scattered locations. Of the cattle in the line of the fire, 150 survivors are being monitored in corrals, and 30 of them have calved within days of the fire.

“Those cows didn’t deserve this,” said Gardiner of the devastation. “We found many with their calves flat beside them – having just calved as the fire raced through. The fire happened so fast, but everything that day seemed to be happening in slow motion.”

“Everywhere you looked, it was like the world was on fire with fire lines on every horizon,” Gardiner said, explaining how fast the fires were upon them and the complications of changes in wind direction, making it impossible to move cattle ahead of the fire.

Even people evacuating their homes were back and forth on where to go as the shifting high winds fueled fires that jumped roads and turned in unpredictable ways throughout the day and night. Greg’s brother Garth had a few close calls, as the fire came first from the north and Garth’s family evacuated their home. Then it switched and the roads were blocked.

Greg Gardiner described his own close encounter while following his brother Mark with a horse trailer. Mark and Eva were attempting to save three horses and two dogs with the fire closing in on their home. When a tree belt erupted in flames, the blackness descended and the heat of the fire reached Greg’s vehicle. He was forced to retreat with zero visibility, and was left wondering for what seemed like an eternity whether Mark and Eva had escaped before their home was engulfed.

A firefighter emerged 30 minutes later to tell him they had made it out.

“This thing is of biblical proportions. Everywhere you look, it is like an apocalyptic wasteland, but that seems like small potatoes right now: My family is alive,” said Gardiner.

Waves of relief

As the heart-wrenching stories and statistics emerge from the region, the focus is transitioning from cattle triage to organizing the significant short- and long-term needs of the ranchers. The agriculture community across the country is wasting no time organizing shipments of donated hay, milk replacer, fencing materials and other needs, while foundations are setting up methods to accept donated funds, and auctions are being organized to raise additional funds for these ranchers.

“When the hay trucks rolled in, it was like the cavalry arrived,” said Gardiner, whose ranchlands were largely burned by the Starbuck fire, deemed the largest single fire in Kansas state history. All told, 22 counties in Kansas were affected by multiple wildfires.

Truckers dispatched from drop points to ranches describe the evident relief in the faces of the ranchers they have met. While the early convoys of semis and flatbeds traveled under lifted highway restrictions, strangers along the way offered cash for fuel or for the ranchers. But the cost of fuel and the availability of trucking remain a bottleneck in getting some of the hay donations to their destinations.

Hay has been delivered from mainly a 300-mile radius of the affected areas. Dr. Randall Spare of Ashland Veterinary Clinic said 800 bales are waiting in Waco, Texas, if they can find trucking. Convoys are also being assembled in South Dakota, Kentucky, Tennessee and Minnesota, with calls coming into the various state coordinators from as far away as Arizona, Wisconsin, Vermont and Canada.

“By Friday we were just amazed at the amount of hay and calls we were getting, and it continues,” said Danny Nusser, Texas A?M Agrilife Extension regional director. “We put the message out Saturday morning that we will take all that we can handle.”

By Monday, however, the 4,200-bale goal set for the three Panhandle supply points had been met, and Nusser reported they are taking names and numbers until they further assess the region’s needs. The goal was to gather a 30-day supply for the estimated 15,000 surviving cattle in the Panhandle.

In Oklahoma, hundreds of large round bales were received over the weekend; one convoy was organized by ranchers in the southern part of the state.

In Kansas, 3,000 large bales were received within a week of the wildfires, and according to Spare, they can use more. “We don’t want to turn down hay because some of our ranchers are just coming to grips with what their losses are and what their needs will be. Since Gardiner Ranch has the capacity to unload and accumulate hay where neighbors can come and get what they need, we are utilizing that.”

Southwest Kansas has an estimated 15,000 surviving livestock on ranches that have lost most of their grazing and hay.

Donations that lift spirits

The challenge with the hay, said Spare, is that “some producers are saying they don’t need the hay or they feel embarrassed to take it, but the grass is all gone and we are 60 days from good grass [in unburned areas], and that’s if it rains, so we are still in the process of contacting ranchers, trying to help people understand as they make their plans that they will need to have something to feed.”

As the immediate hustle to triage cattle and secure feed and care for survivors shifts to a longer-term coordination of ongoing recovery, those close to the situation are urging more distant donors to consider monetary donations to help with trucking of closer hay and materials and other needs instead of trying to send hay from 1,000 miles away.

Spare has spent his time trying to connect the dots. And those dots include the growing number of orphaned calves.

With fences to build and repair, feed to secure, cows still calving and long-term plans and decisions to make, there’s no time to bottle and bucket feed calves two and three times a day, particularly for those ranchers who have also lost their homes.

Kansas county 4-H clubs put the word out early that youth members are taking in bucket calves to help the ranchers who have so many other things to do in the recovery. To follow their progress and donate milk replacer and other supplies, visit the Orphaned Calf Relief of SW Kansas on Facebook.

Veterinarians are reaching out to colleagues in the hard-hit areas. Spare received a call late last week from Dr. Tera Barnhardt. She and Deerfield Feeders’ general manager, Cary Wimmer, came up with the idea of offering temporary homes and care in the calf ranch hutches for orphaned calves from Ashland.

Many ag companies have donated milk replacer, feed, pharmaceuticals and other animal care products – and along with hay donations from other ranches, have come personal items for the families who have lost their homes and belongings.

“Our hearts go out to the ranchers,” said Barnhardt. “I’m just glad we could help connect some dots and take something off their plate.”

Moving forward

With the fires mostly contained in the affected regions, conditions are still tricky in some spots, according to Nusser. He said it will be June or July, with sufficient rain, before the greenup slows the fire threat in the Panhandle.

County FSA offices are asking ranchers to contact them with loss numbers so this information can be tied to emergency declarations from each state’s respective governors for grazing lands exceptions and assistance.

The problem is that individual ranch losses will far exceed the individual $125,000 caps for USDA programs like the Livestock Indemnity Program and fencing cost shares.

“Every individual rancher will weather these losses differently, depending on their financial position at the time of the fire,” said Dr. Steve Amosson, AgriLife Extension economist in Amarillo, Texas. His early estimate for the Panhandle, alone, is $21 million in losses, which he expects to see increase as more information is gathered. He said that for many ranchers, little insurance money will come into play.

In Texas, the Perryton/Lipscomb fire is deemed the third largest in Texas state history.

For the short term, the tangibles are necessary because it takes time for the various foundations to pool monetary donations and get resources to the ranchers. Over the next 30 to 60 days, the recovery will transition to a rebuilding effort.

This will be a long recovery for ranchers who have lost 50 to 90 percent of their herds and multiple years of income and stockpiled forage, according to Spare.

“We’re praying for rain,” he said, describing dirty skies as the wind lifts the gray dusty sand over charred soils.

“I told CNN that we as ranchers are stewards of the grasslands, and that the only way we have something to sell for an income is to sell grass through the cows that are eating it. We are working to take care of that and start all over again,” said Spare, who had significant losses among his own cow herd and was relieved when his son showed up in the driveway Tuesday morning, taking time away from vet school before spring exams to take care of the home front while he worked with other ranchers and their cattle.

As for the immediate fencing need, a short- and long-term approach is being pursued. While fencing certainly has its government specs to qualify for USDA cost-sharing, several ranchers interviewed for this report indicate that the amount of fencing they have to replace so greatly exceeds the cap on funds they will begin with what is donated to establish perimeters and do their cross fencing as they can over the next few years.

While prayers are most coveted, those who want to help are urged to contact organizers in the affected states to see what the needs are as community leaders develop an ongoing relief plan.

“There are no guarantees in agriculture. We know the risks and we appreciate this is life we have chosen to live,” said Gardiner. “This is an emotional deal, hitting us all every day. We’ll take it one step at a time. We’ll survive by keeping ourselves moving.”

“There is so much appreciation in this community for the outpouring of love and compassion from the people who have come alongside us with prayers and help,” said Spare. “Many don’t know how they’ll get through this, but we know we will get through it.”  end mark

The Starbuck fire consumed 43,000 of the 48,000 acres at Gardiner Angus Ranch. Over 12,000 miles of fencing in Kansas, alone, is estimated in need of replacement as the rapidly moving and intense fire disintegrated posts at the ground level. 

Photo by Julie Tucker

How you can help

Wildfire relief organizers are indicating that the best way for distant donors to help is to provide monetary donations for transporting nearby hay and resources to the areas affected by the wildfires.

In addition, auctions are being organized to benefit wildfire funds. For example, a heifer donated by Oklahoma West Livestock Market was auctioned 105 times on March 8 to garner $115,449 with proceeds going to the Oklahoma Cattlemen’s Foundation Fire Relief Fund. Similar ideas are creating a ripple response throughout the agriculture community and can be replicated anywhere.

Trent Loos at Rural Route Radio is helping to organize this idea to fund the recovery and rebuilding efforts in the fire-ravaged areas of the High Plains through means of raising cash. For information about how to participate in this and to find a list of upcoming auctions, as well as how to set one up, contact Trent Loos at (515) 418-8185.

To give supplies and trucking or to donate funds to foundations for direct wildfire relief, contact the state-by-state resources below.


Monetary donations: Ashland Community Foundation/Wildfire Relief Fund at www.ashlandcf.comor P.O. Box 276, Ashland, KS 67831. The Kansas Livestock Association/Wildfire Relief Fund at 6031 SW 37th St., Topeka, KS 66614.

Hay, trucking and fencing donations: Call Ashland Feed and Seed at (620) 635-2856. (Ashland Feed and Seed is also taking credit card orders over the phone for feed and milk replacer or other supplies for ranchers in the area.)


  • Monetary donations: Texas Department of Agriculture STAR Fund.
  • Hay, trucking and fencing donations: Ample hay has been received for two to three weeks, so call to see if and when more is needed. Fencing supplies are needed, which can go to the Agrilife supply points. Contacts are J.R. Sprague at (806) 202-5288 for Lipscomb, Mike Jeffcoat at (580) 467-0753 for Pampa, and Andy Holloway at (806) 823-9114 for Canadian.
  • For questions about donations or relief efforts, contact Texas A?M Extension at (806) 677-5628.
  • Hay, trucking and fencing: Contact Kent Kokes (970) 580-8108, John Michal (970) 522-2330, or Justin Price (970) 580-6315.
  • Monetary donations: Oklahoma Cattlemen’s Foundation Fire Relief at P.O. Box 82395, Oklahoma City, OK 73148 or
  • Hay, trucking and fencing donations: Contact Harper County Extension at (580) 735-2252 or Buffalo Feeders at (580) 727-5530.
  • Other states organizing deliveries
Preliminary statistics
  • Texas: Four deaths and more than 480,000 acres burned and early livestock loss estimates of 2,500 adult cattle. Texas A?M Agrilife Extension estimates preliminary damage at over $21 million, not counting equipment losses. Gov. Greg Abbott declared a state of disaster in six counties in the Texas Panhandle.
  • Kansas: One death, 11 injuries, more than 40 homes destroyed and 702,000 total acres burned, 462,000 of which stem from the Starbuck fire deemed the largest single fire in Kansas state history. Kansas Gov. Sam Brownback signed a disaster declaration covering 20 counties. Early estimates of livestock losses are 3,000 to 6,000 adult cows and additional calves.
  • Oklahoma: One death, eight homes and 381,000 acres burned from the Starbuck fire. Three additional fires in the state have burned 120,000 additional acres. Gov. Mary Fallin declared a state of emergency for 22 counties. Early estimates of livestock losses are 3,000 cows and additional calves.
  • Colorado: Five homes were destroyed and more than 30,000 acres burned; early livestock loss estimates are 185 cow-calf pairs.

Comprehending the Immensity of the National Debt

This does not directly pertain to the cattle market, but we recently came across the map of the United States found below that shows the proportion of Federally owned land in each state. This prompted the question, "How much of the nearly $20 trillion National Debt could be paid if vast amounts of this land, much of which costs more to administer than it generates in lease payments, were sold and the sale proceeds applied to the debt?" -- National Debt Clock

What was found in the New Estimates of Value of Land of the United States - Bureau of Economic Analysis - April 3, 2015, is astounding and may be the most compelling and understandable way to comprehend the immensity of the National debt...

In the conclusion of this report, it is stated... "This paper presents new estimates of the value of land in the lower 48 United States from 2000 to 2009. In 2009, the value of land was approximately $23 trillion, $1.8 billion of which is owned by the federal government.  According to the National Land Cover Database, 6% of the lower 48 states is developed, and according to the estimates in this paper, this land consists of 50% of the overall land value. Land values rose until 2006 and then fell until the end of the sample in 2009."

"The estimation methodology consists of dividing the U.S. into a mosaic of parcels at the census tract level and below, assigning ownership and prices to each parcel, and tabulating.  Whereas past estimates have omitted large areas of land or have based valuation on potentially implausible estimates of structure values, this attempt instead misses no land area and uses hedonic estimates of land values."

The Bottom Line... Selling all Federally owned land and applying the sale proceeds to the National Debt would only be "a drop in the bucket" and nearly all of the land in the lower 48 states would have to be sold to pay the debt.


All Cattle & Calves Inventory: January 1, 2017 vs. 2016
Compiled from USDA National Agricultural Statistical Service Data

Beef Cows Inventory: January 1, 2017 vs. 2016
Compiled from USDA National Agricultural Statistical Service Data

Replacement Heifers Inventory: January 1, 2017 vs. 2016
Compiled from USDA National Agricultural Statistical Service Data

January 1 Cattle Inventory Up 3 Percent
USDA - National Agricultural Statistics Service (NASS)
  • All cattle and calves in the United States, as of January 1, 2017, totaled 93.6 million head. This is 2 percent above the 91.9 million head on January 1, 2016. 
  • All cows and heifers that have calved, at 40.6 million head, are 3 percent above the 39.5 million head on January 1, 2016. 
    • Beef cows, at 31.2 million head, are up 3 percent from a year ago. 
    • Milk cows, at 9.35 million head, are up slightly from the previous year. 
  • All heifers 500 pounds and over, as of January 1, 2017, totaled 20.1 million head. This is1 percent above the 19.9 million head on January 1, 2016. 
    • Beef replacement heifers, at 6.42 million head, are up 1 percent from a year ago. 
    • Milk replacement heifers, at 4.75 million head, are down 1 percent from the previous year. 
    • Other heifers, at 8.88 million head, are 1 percent above a year earlier. 
  • Calves under 500 pounds in the United States, as of January 1, 2017, totaled 14.4 million head. This is 2 percent above the 14.1 million head on January 1, 2016. 
    • Steers weighing 500 pounds and over totaled 16.4 million head, up slightly from one year ago. 
    • Bulls weighing 500 pounds and over totaled 2.23 million head, up 4 percent from the previous year. 
  • The 2016 calf crop in the United States was estimated at 35.1 million head, up 3 percentfrom last year's calf crop. 
    • Calves born during the first half of 2016 were estimated at 25.6 million head. This is up 4 percent from the first half of 2015. 
    • Calves born during the second half of 2016 were estimated at 9.53 million head, 27 percent of the total 2016 calf crop. 
  • Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 13.1 million head on January 1, 2017. The inventory is down 1 percentfrom the January 1, 2016 total of 13.2 million head. 
    • Cattle on feed, in feedlotswith capacity of 1,000 or more head, accounted for 81.2 percent of the total cattle on feed on January 1, 2017. This is up 1 percent from the previous year. 
    • The combined total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots) is 26.6 million head. This is 2 percent above one year ago. 

What Did it Cost to Produce a Calf This Year?
Aaron Berger -- University of Nebraska Extension

Weaning of spring-born calves has occurred for many cow calf producers. Right after weaning is a good time to analyze the business and see what it cost to produce a pound of weaned calf.

Cow costs and thus the cost to produce a weaned calf have shot up over the last 15 years. From 1987 to 2001, the Livestock Market Information Center reports that annual cow costs increased from $300 to $400 per cow. From 2002 to 2015, cow costs more than doubled from $400 to $875 per cow.

These annual cow costs figures are from National Ag Statistics Surveys. Cow costs in much of Nebraska would be equal to or higher than the national average due to the cost of pasture. Obviously not every cow weans a calf, so the actual cost per calf produced is much higher than $875!

This information prompts the question: What did it cost you to produce a pound of weaned calf this year? What do you project it will cost in 2017?

Unit cost of production (UCOP) is a value based on a relationship in production between costs and units of product made or produced.

Unit Cost of Production = Costs / Units Produced

The relationship between the numerator (Costs) and the denominator (Units Produced) is what drives the UCOP value. The power of the UCOP ratio for cow-calf producers is that everything involved in the production of a pound of calf is represented in the numerator or denominator of the equation. For example, if a producer wants to buy a pickup that will be used in the production of calves, he can estimate how the purchase of that pickup will affect his UCOP in terms of cost per pound of calf produced. The same thing goes for the purchase of a bull. Evaluating the purchase of a bull in light of how many estimated pounds of calf that bull will produce in relation to his cost can give insight into what a producer might be willing to spend.

What did it cost to produce a pound of weaned calf this year? What is it projected to cost next year? The old adage "you can't effectively manage what you don't measure" is true in relation to managing the cow-calf enterprise. The first step in calculating UCOP is to have accurate production and financial records. These records do not have to be complicated, but they need to be accurate and thorough. If current management and information systems don't provide the data to run this type of analysis, consider making changes that will provide the records needed.

Unit Cost of Production takes into account both product produced and input costs. Knowing UCOP allows a manager to look forward utilizing both present and projected input costs with production numbers to make informed decisions. You can’t change last year’s cost of production numbers, but with good information, you can make management changes that will impact the upcoming year. Cow-calf producers who know UCOP numbers and understand the interaction between costs and production can implement strategies to effectively manage resources to meet business and personal goals.

As with most things in life, the first few times you do something, you make mistakes and through the process learn how to get better. The first time someone learns to drive, there is going to be gears grinding, lurching and jerking, and some killed engines. There also is likely going to be some parent or adult with more gray hair (or perhaps less hair) in the process! Passing the driver’s test and being able to drive is well worth the hassle and effort!

Learning how to calculate UCOP is a similar process for cow-calf producers who have never done it before. The first few times through the mental gears will be grinding and there will be frustration along the way. However once someone does it and gets comfortable, the value of knowing this information and being able to confidently make decisions that improve profitability is extremely satisfying! 


Home| Recent Listings | Cattle for Sale| List On-Line |.TCR Mercantile.| Classified Ads | Markets|Auctions
Copyright © TM - The Cattle Range - All Rights Reserved





August 17th: Commodity Market Comments 
  • “Shootin’ The Bull” -- Christopher B. Swift.
  • ..

    "Shootin' the Bull" Daily Comments.
    Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @

    An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.