Author: David Anderson

Maybe we’re starting the new year on a high note with calf prices higher.  Lighter weight steer calves in the Southern Plains topped $200 per cwt at the end of 2021.  5-600 pound steers were over $180 and heavier feeders were over $160.  All of those prices were at least 10 percent higher than at the end of 2020.  Markets across the country were above a year ago along with those in the Southern Plains.

Expectations are for higher calf prices in 2022 than in 2021.  The continuing contraction in beef cow numbers means fewer calves for sale later in the year.  Tighter supplies combined with good demand means higher prices.

High feed costs will create some management choices this year.  Fine tuning fertilizer needs this year may pay off.  Targeting hay quality to cow needs could cut costs.  The area of the country in drought has been expanding across the South.  Some planning ahead for drought management strategies might include culling earlier, reviewing stocking rates, reserving some pasture for later needs, or even buying some feed ahead.  

On balance, the new year brings a bunch of reasons for optimism, in spite of higher costs.  The higher prices to start the year promises more to come later.  Best wishes to you in the new year!  

Anderson, David. “Calf Prices Start the New Year Higher“. Southern Ag Today 2(2.2). January 4, 2022. Permalink

Against a backdrop of rising cattle and calf prices and falling wholesale beef prices, USDA is to release the final Cattle on Feed report of the year on December 23^rd.  Cattle producers in the South are significant suppliers of feeder cattle throughout the Plains and Corn Belt.    

Both feedlot marketings and placements in November 2021 are expected to be about 4.5 percent larger than November 2020.  There was one more slaughter day this November implying slightly lower daily average marketings than last year.  If correct, these marketings would also be larger than in 2019.  While placements this year are expected to be larger than in 2020, if the estimates are correct, they would be fewer than in each November from 2017 to 2019.  Fewer feeder cattle were imported from Mexico during the month while slightly more were imported from Canada.  Placements in the expected range would follow the normal pattern of declining sharply from October’s placements.

The combination of marketings and placements leaves the number of cattle on feed slightly below last year.  On feed inventories typically increase from November to December and the December inventory is often the highest for the year.  December 2021 should be an exception to that with on-feed inventories in February being larger.  If the estimates are correct, this December would be the 6^th consecutive month with fewer cattle on feed than the year before.  

Merry Christmas!

Anderson, David. “More Cattle Placed and Marketed Expected.” Southern Ag Today 1(52.2). December 21, 2021. Permalink

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