Ethanol, Corn Price and Weather Shifting Cattle Feeding North

Traditionally, Texas, Kansas and Nebraska have ranked as the top three cattle feeding states, in that order, amongst feedyards with 1,000+ head capacities (see Figure 1 on next page). A unique combination of severe winter weather, high corn prices and the rapidly increasing production of ethanol byproducts may have been shifting that pattern in recent months. Cattle on feed data show that Nebraska has had the second largest number of cattle on feed in lots with 1,000+ head capacities since February 1. This resulted from a 22 percent increase in feed numbers since September 2006 in Nebraska. Interestingly, other Northern Plains feedyards saw increases as well. Iowa and South Dakota on feed inventories increased 16 percent and 48 percent, respectively, during this time period. Texas inventory declined 6 percent since September 1, 2006 and Kansas and Oklahoma increased inventory by less than 2 percent (the U.S. average was a 5.6 percent increase during this six-month time period)

Economy Hard on Beef and Pork Demand

The inventory of all cattle and calves reached a 50-year low at the end of 2008. Pork producers reduced the size of the breeding herd late in 2008. Imports of feeder cattle, feeder pigs and slaughter cattle and hogs from Canada have dropped dramatically since the fourth quarter of 2008. And, never before seen drops in broiler production occurred in the last few months of 2008. With production of nearly all sectors of the meat industry lower than year-ago levels, why haven’t livestock prices rallied in response? The economic times we’re in have reduced demand. People haven’t been willing or able to consume more beef and pork at higher prices

National Animal Identification

Animal identification on a group or individual head basis is increasingly being discussed by animal agriculture producers, allied industry associations and governmental officials. While efforts to initiate a national animal identification system date back several years, recent concerns over animal diseases (e.g., foot-and-mouth disease, avian influenza and bovine spongiform encephalopathy) and animal terrorism have greatly accelerated plans in the past year. Serving as the general guideline for the national identification plan is the U.S. Animal Identification Plan (USAIP) developed by an industry, state and federal partnership

Country of Origin Labeling: An Update

Another step in the multi-year development and implementation of Country of Origin Labeling (COOL) was completed at the end of October when USDA’s Agricultural Marketing Service (AMS) published proposed rules for mandatory COOL. These proposed rules, published in the Federal Register on October 30, 2003, provided AMS’s requirements for compliance with COOL and clarification of some issues raised through public comment on the voluntary COOL guidelines released last year. Additionally, AMS offered a summary of research identifying costs and benefits of the program and its own cost assessment

Ethanol, Corn Price and Weather Shifting Cattle Feeding North

Traditionally, Texas, Kansas and Nebraska have ranked as the top three cattle feeding states, in that order, amongst feedyards with 1,000+ head capacities (see Figure 1 on next page). A unique combination of severe winter weather, high corn prices and the rapidly increasing production of ethanol byproducts may have been shifting that pattern in recent months. Cattle on feed data show that Nebraska has had the second largest number of cattle on feed in lots with 1,000+ head capacities since February 1. This resulted from a 22 percent increase in feed numbers since September 2006 in Nebraska. Interestingly, other Northern Plains feedyards saw increases as well. Iowa and South Dakota on feed inventories increased 16 percent and 48 percent, respectively, during this time period. Texas inventory declined 6 percent since September 1, 2006 and Kansas and Oklahoma increased inventory by less than 2 percent (the U.S. average was a 5.6 percent increase during this six-month time period)

Economy Hard on Beef and Pork Demand

The inventory of all cattle and calves reached a 50-year low at the end of 2008. Pork producers reduced the size of the breeding herd late in 2008. Imports of feeder cattle, feeder pigs and slaughter cattle and hogs from Canada have dropped dramatically since the fourth quarter of 2008. And, never before seen drops in broiler production occurred in the last few months of 2008. With production of nearly all sectors of the meat industry lower than year-ago levels, why haven’t livestock prices rallied in response? The economic times we’re in have reduced demand. People haven’t been willing or able to consume more beef and pork at higher prices

Country of Origin Labeling: An Update

Another step in the multi-year development and implementation of Country of Origin Labeling (COOL) was completed at the end of October when USDA’s Agricultural Marketing Service (AMS) published proposed rules for mandatory COOL. These proposed rules, published in the Federal Register on October 30, 2003, provided AMS’s requirements for compliance with COOL and clarification of some issues raised through public comment on the voluntary COOL guidelines released last year. Additionally, AMS offered a summary of research identifying costs and benefits of the program and its own cost assessment

Beef Export Verification Program for Japan

After regaining beef export trade with Japan in December 2005, export rule violations prompted Japan to reinstate its beef trade ban on January 20, 2006. While it is uncertain when trade will resume, it is incumbent upon the entire U.S. beef industry to understand the rules for beef export to Japan. These rules are established in USDA’s Beef Export Verification (BEV) Program for Japan. This BEV Program applies to companies, producers, feedlots, slaughterers and fabricators who supply beef and beef offal for export to Japan. Suppliers must comply with the specified product requirements under the USDA BEV Program for Japan through a USDA approved Quality Systems Assessment (QSA) Program. Because cattle producers are considered suppliers under the QSA, it is important for them to determine eligibility of their cattle for export

IDENTIFYING ECONOMIC RISK IN CATTLE FEEDING

Closeout data from two western Kansas commercial feedlots are examined to determine how cattle prices, feed costs, and animal performance impact the variability of cattle feeding profits. The relative impacts of these factors are studied across sex, placement weight, and placement month using standardized beta coefficients. Feeder cattle prices have a greater impact on profit variability for spring and fall placements. The effect of animal performance on variability of cattle feeding profits is greater for fall placements. Results suggest that fed cattle and feeder cattle prices should be emphasized in managing the overall risk in cattle feeding because they are the largest contributors to profit variability.cattle finishing profitability, cattle performance, feedlot closeouts, standardized beta coefficients, Livestock Production/Industries,

Calf Finishing Versus Background/Yearling Finishing Systems: Where’s the Profit?

As corn prices have more than doubled in the last two years, cattle producers continually look for alternatives to finishing calves exclusively in feedlots on high concentrate rations. Historically, Nebraska feeders have placed a high proportion of fall-weaned calves on feed in October and November and sold them as fed cattle in May. However, as corn prices increase, livestock producers have more incentive to background calves during the winter and following summer on forages, and delay placing the cattle on feed until they are long yearlings at the end of the summer grazing season. Based on University of Nebraska–Lincoln research examining the performance of cattle in both types of systems from 1996 to 2007, the relative difference in returns to calf finishing versus yearling systems is relatively small (about $4.00/head) on average, but highly variable (Figure 1 on next page). Average returns to the calf and yearling system were$18.54/head and $14.33/head, but ranged from losses exceeding$177/head to profits above $347/head. In the ten years of the study where both systems were directly comparable, the yearling system was more profitable than calf finishing in four years and less profitable in six of the years