Author: David Anderson

The number of dairy cows in the U.S. declined to 9.4 million head in October, 14,000 head fewer than in October 2020.  Milk production per cow and milk production fell below last year, as well.  All three statistics are a sharp departure from the Spring when the number of cows peaked at 9.5 million head.  

Four states in the South are included in monthly NASS reports on milk cows, production per cow, and milk production: Florida, Georgia, Virginia, and Texas.  Fewer cows were reported in Florida (-7,000 head) and Virginia (-3,000 head) in October compared to October 2020.  Georgia reported 1,000 more dairy cows.  Texas, where milk production has largely moved to the panhandle, reported 22,000 more cows.  Following cows, October milk production was lower in Florida and Virginia and higher in Georgia and Texas.

DMC payments were triggered last month for the tenth straight month.  While all milk prices have increased in the South, prices elsewhere are below a year ago.  Feed costs continue to be high, leading to continued DMC payments.  Reduced milk production is likely to result in some higher milk prices in coming months increasing milk over feed cost margins but rising non-feed costs will keep the pressure on margins.  

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Anderson, David. “Fewer Dairy Cows in Parts of the South.” Southern Ag Today 1(50.2). December 7, 2021. Permalink

USDA’s November Cattle on Feed report comes out Friday, November 19^th.  The report is expected to indicate that about 3.6 percent more cattle were placed on feed in October than last October.  Placements usually increase in the Fall to a peak in October.  The South is a major calf producing region supplying feeder cattle to feedlots throughout cattle feeding country.  On average, over the last few years, 73,726 cattle have entered Texas from Southern states in October.  That data is from the Texas Animal Health Commission and represents non-breeding cattle in-shipments to the state with a veterinary certificate.  It does not mean that all those cattle went directly to feedyards and it is likely an undercount of all cattle coming into Texas.  Drought in some parts of the country and higher fed cattle prices are supporting placements.

Feedyard marketings are expected to be below last October by about 4.2 percent but, the decline in marketings is due to one less working, or slaughter, day in October 2021 versus October 2020.  Daily average marketings should be about the same as a year ago.  The combination of marketings and placements leaves the number of cattle on feed on November 1^st at 99.9 percent of last year.  

A lot of factors are at work in determining Southern calf prices, like higher fuel costs for trucking, higher fertilizer prices, and higher hay prices. Higher fed cattle prices are boosting the demand for calves and supporting prices.

Anderson, David. “More Cattle Heading to Feedlots.” Southern Ag Today 1(47.2). November 16, 2021. Permalink

Following their normal Fall decline, calf prices across the country, including the South have bounced higher.  In the last two weeks 5-600 pound calf prices in Georgia have increased from about $139 to $146 per cwt.  That calf price increase is roughly in line with the average price increase over the 2015-2019 period.  Lighter, 4-500 pound calves in Georgia, have seen little price increase, in contrast to sharply higher prices for lighter calves in Texas.  Heavier, 7-800 pound feeder steers have increased about $10 per cwt to $130 over the last two weeks.

A couple of factors are working to increase calf prices.  The first is supply related in that the Fall run of calves is over, effectively reducing supplies on the market.  The second is rising fed cattle prices.  Fed cattle prices crossed $130 per cwt last week after a number of weeks around $124.  Higher feed costs are working against these price increasing factors.  Corn prices in the Southern Plains have increased from about $5.85 per bushel to $6.11 in the last couple of weeks.  

Calf prices do tend to decline by year end, on average, before rallying into the next Spring.  The smaller cow herd suggests some tighter supplies of calves next year.  Rising fed cattle prices would also pull calf prices higher.  

Anderson, David. “Calf Prices on the Rise.” Southern Ag Today 1(46.2). November 9, 2021. Permalink

It’s that time of year where our attention turns to turkeys.  While the South is not normally thought of as a major turkey producing region, we are major eaters.  But, Arkansas and North Carolina are the second and third largest turkey producing states, respectively, according to NASS, USDA data. 

Weekly turkey production is down about 5.5 percent for the year compared to last year.  But, as Thanksgiving has approached the production gap has closed a little, with production only trailing last year by 2 percent over the last 2 months.  Production, estimated to total 5.7 billion pounds is the smallest since 2015.  Struggling turkey demand over the last few years and higher feed costs over the last year have contributed to falling production.  Per capita consumption at 15.34 pounds in 2021 will be the smallest since 1987.  

Tighter supplies have led to higher prices.  While USDA no longer reports retail turkey prices, the wholesale market provides an indication of prices for the holidays. Wholesale prices for frozen 8-16 pound hens and 16-24 pounds toms are 17 percent higher than those last year.  So, grocery stores will feel the pressure of higher prices and figuring out how much to pass on to their customers.  Turkeys are often used to sell the whole basket of Thanksgiving dinner items.  It appears that retail store featuring is starting to pick up, but price specials are lagging behind last year.  

While stores aren’t likely to run out, it may pay to shop early this year, especially if there is a specific weight, brand, or fresh vs frozen bird you like the best.    

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Anderson, David. “It’s Turkey Time! Gobble Gobble!” Southern Ag Today 1(45.2). November 2, 2021. Permalink

Fall is here and cow prices have begun to decline from their summer seasonal highs.  Cull cow prices in the Southern Plains that hit $64 mid-year have given back about 22 percent of that price as of last week.  Over the last five years, cow prices have declined by about one-third from mid-year to November.

Cow prices normally decline this time of the year because culling picks up across the country.  Beef cow culling normally hits its annual peak in October-November each year.  This year, beef cow slaughter remains well above last year (up 10 percent), likely encouraged by drought in the West.  Dairy cow culling normally peaks in January-February and again late in the year.  Beef and dairy cow sales, increasing at the same time in the Fall, combine to force lower cull prices.

A couple of good questions remain for the Fall.  Did the surge in beef cow culling over the Summer pull ahead cow slaughter so there are fewer to go to market this Fall?  Will high feed costs and struggling milk prices push more dairy cow culling?  A long-used strategy has been to buy cows (or keep some cows) at depressed prices in the Fall to take advantage of seasonal price increases the next Spring.  A smaller beef cow herd will likely support higher cow prices in 2022, but it will be important to consider high feed costs in this strategy.

Anderson, David. “Cow Prices Start Seasonal Slump.” Southern Ag Today 1(42.2). October 12, 2021. Permalink