Category: Livestock Marketing

Supplemental feeding programs are a staple in beef cattle production systems. Something that is a constant battle is making it more economical. One sector of supplemental feeding is the use of byproduct supplemental feeds to achieve a more sustainable, yet economical way of production. Byproduct feeds are used throughout the southeastern US and include a wide variety of products. Availability of specific products is based on location. In the Southeast, some commonly used supplements include products from the processing of cotton, peanuts, soybeans, corn, ethanol and beer.         

We surveyed beef cattle producers across the southeastern states including Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Oklahoma, Tennessee, Texas and Virginia. The survey received 142 responses. Of those responses, 99 indicated use of some type of supplementation for their grazing cattle. Furthermore, 50% of respondents who used supplementation were using byproduct feeds for supplementation while the other 50% were using commodity feeds for supplementation. The results indicated that producers use a variety of different products based on availability, storage facilities and time of year. The most common products used in the southeastern US are whole cottonseed, corn gluten feed, soybean hulls, dried distillers grain, cotton gin byproduct, and peanut hulls (Figure 1). 

Cost is often a key difference between byproduct feed supplementation and commodity feed supplementation. Prices vary throughout the year depending on what products are being produced during that time. Current prices can be found on the USDA’s Agricultural Marketing Service’s National Grain and Oilseed Processor Feedstuff Reports. Considering the energy and protein concentration is important.  Knowing what your herd needs and finding a product that fits those needs will lead to the best results. 

The use of byproduct feeds for cattle is a promising way to promote both sustainability and economic gain in beef cattle production. By understanding the nutritional needs of your herd and the cost differences between products, producers can make decisions to benefit their operations. Our next step in this research is to analyze fertilizer value of feeding byproduct supplements to cattle on pasture. 

 Figure 1: Survey Results of Byproduct Feed Use by Southeastern Producers

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St. Andrew, Lauren. “From Byproduct to Beef: Revolutionizing Cattle Feeding for Sustainability and Savings in the Southeast.” Southern Ag Today 4(24.2). June 11, 2024. Permalink

In 2023, food scientists from Auburn University’s Poultry Science Department conducted a survey to ascertain the perception of poultry processing, specifically stunning processes, among American chicken consumers (“Consumer Perception Survey of Animal Welfare in Broiler Stunning.”, Linda Barahona; Sungeun Cho, Ph.D.) The full survey data are currently being evaluated, but some preliminary findings are especially intriguing on the economic front. 

The following two survey questions were of specific economic interest: A. “Humanely processed (chicken) are animal derived products from animals that have been treated ethically. Are you willing to pay more for humanely processed(chicken)?” – to which respondents could answer Yes, No or Maybe. The next question related to the previous by asking: B. “If the answer to the previous question was ‘Yes’ or ‘Maybe’, how much more are you willing to pay?” Respondents had six choices for B: Less than 10%, 10-50%, 51-100%, 101-200%, 201-300% and Greater than 300%.

Of the 986 respondents, 699 of them (71%) answered Yes (358) or Maybe (341). Of those 699 Yes/Maybe’s, almost 85% were in the first two categories and willing to pay at least 10% more, with half of those willing to go up to 50% more in price for humanely processed chicken. To put the choice ranges in perspective, at the time of this writing, the average regular pack of boneless/skinless breast in the Southeast U.S. was $3.21 (USDA National Retail Report – Chicken, May 17, 2024.) Using the upper end of the ranges above, the respective increased prices someone might be willing to pay chicken would be: $3.50 (<10%), $4.81 (10-50%), $6.42 (51-100%), $9.63 (101-200%), $12.84 (201-300%), or $14.45 (>300%, estimated at 350% increase). Applying these prices to the results would suggest only 15% of those willing to pay more would accept more than an additional $1.60 ($4.81 compared to $3.21) per package of humanely processedchicken breasts. 

While this survey seems to suggest that consumers are indeed willing to pay for chicken that was processed in a perceived more humane fashion, several questions remain. The above prices in dollars were not shared in the survey, those are extrapolations of this author. Further work is planned to evaluate consumer choices with products visually before them with the dollar prices clearly marked, and with one package clearly labeled and understood as “Humanely Processed”. Would the breaking point remain at 50% price increase, or would consumers make different choices with more information? Some of the current survey data suggests increased knowledge of poultry production in general leads to willingness to pay more. Would a clearer understanding of a specific “humane process” in question also impact willingness to pay? All of these are questions being considered for further expanded study.

The results of this work will be important for poultry companies as they consider implementing processes that might be considered more humane, like controlled atmospheric stunning, but can be costly to implement and have increased management requirements. If consumers are willing to pay enough, it might be possible for poultry companies to work with their wholesale and retail customers, like grocery and fast-food businesses, to pass the increased cost of production directly to end consumers. 

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Brothers, Dennis. “Building Equity.” Southern Ag Today 4(23.2). June 4, 2024. Permalink

USDA released their May cattle on feed report on Friday, May 24^th.  For the first time in 8 months the total number of cattle on feed declined below last year’s level.  The 11.5 million cattle on feed were the fewest since September 2023.  The number of cattle in feedlots has been pumped up by placing more heifers, some pulling of feeder cattle ahead, and a few more cattle from Mexico compared to the year before.

Due to when holidays fell this Spring and weekends there were 2 fewer slaughter days in March compared to last year and 2 extra days in April.  This large swing in days has not happened since the mid-1990s.  The 2 extra days in April meant that feedyard marketings were more than 10 percent larger than April last year.  Placements were almost 6 percent fewer than last year and were the smallest since 2020.  

The combination of large marketings and light placement numbers pulled down cattle on feed below a year ago.  There are still more cattle on feed for more than 90 days and 120 days than a year ago so that should keep dressed weights high.  

The wholesale beef market, as measured by the Choice beef cutout, has jumped more than $16 per cwt in the last 2 weeks.  Remember that the cattle on feed report is a little bit backward looking.  It contains marketings and placements in April and the number of cattle on feed on May 1.  In the ensuing couple of weeks prices have jumped higher.  Whether that increase reflects some packer cut back in processing to try to boost prices, some Memorial Day summer bump in buying, or fewer cattle on feed, or a combination of all three (most likely) the end result is higher wholesale beef prices.  Fed cattle prices are increasing also.  Fewer cattle on feed promises to cut beef supplies that have actually been larger than last year over the last 8 weeks.  Tighter supplies will work to boost prices for calves, feeders, and feds.

Anderson, David . “Fewer Cattle on Feed, Higher Prices.” Southern Ag Today 4(22.2). May 28, 2024. Permalink

Total beef production can be defined as the number of animals slaughtered times the average dressed weight. I’ll briefly discuss the steer dressed weight in this article, emphasizing its recent surprising behavior. Dressed weight corresponds to the weight of the carcass minus feet, head, hide, and organs (ERS/USDA). Figure 1 shows the atypical seasonal pattern so far in 2024 for the U.S. federally inspected weekly average steer dressed weight. The blue line exhibits the 2024 counter-season pattern when contrasted with 2023 (dotted line) and the 2018-2022 average (red line).

Following a record high for the first week of January (937 lb./head), the dressed weight experienced a gradual decline until the fifth week of 2024, when it reached 909 lb./head. Winter weather helps explain this fall at the beginning of the year. However, instead of continuing to decrease, the dressed weight unexpectedly surged, reaching record highs for weeks 9 to 16. During this period (weeks 9 to 16), the steer’s average dressed weight was 921 lb./head, tallying 25 lb./head heavier than in 2023 and 32 lb./head more than the previous five years’ average.

One of the key factors contributing to the recent increase in dressed weight is the surge in days on feed. The number of cattle on feed (COF) for over 120 days significantly increased, exceeding 4.9 million head in April, up by about half a million from last year. Meanwhile, the COF, for over 90 days, plateaued at around 6.6 million heads since February. As the cost of gain has dropped, producers tend to increase weights. But, keeping the yard full and packers slowing harvest schedules may be more important factors in dressed weights.  One by-product of heavier weights and more days on feed is the percent of carcasses grading Prime.  In fact, the percent of Prime carcasses jumped from 9.9 percent in the first week to 11.4 percent in the last week of April 2024 (Figure 2). More Yield Grade 4’s and 5’s is another by-product, but that is another subject.   

In the short run, the dressed weight shows a counter-season pattern. Nevertheless, in the long run, the steer dressed weight exhibits an upward trend. Figure 3 illustrates this behavior, displaying an average increase of 4.95 pounds for every additional year (linear regression, dotted line). In 50 years, the average dressed weight has grown by approximately 30%. It means that nowadays, three steers produce almost the same amount as four steers in the seventies. Technological advancements, such as in nutrition, management, and genetics, help explain this phenomenal growth. 

Figure 1 – Steer Dressed Weight, Federally Inspected, Weekly

Figure 2 – Beef Graded Prime as Percent of Beef Graded, Weekly

Figure 3 – Steer Dressed Weight, Federally Inspected, Yearly

References

AMS/USDA. (2024, May 10). Retrieved from: https://publicdashboards.dl.usda.gov/t/MRP_PUB/views/LPMeatGradingDashboard/GradeData?%3Aembed=y&%3Aiid=1&%3AisGuestRedirectFromVizportal=y

ERS/USDA. (2024, May 10). Retrieved from: https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=77827

NASS/USDA. (2024, May 10). Retrieved from: https://quickstats.nass.usda.gov/

In general, the only old things that have much value are those that are rare and in extremely good condition. For instance, a Rembrandt would be a good example of an old thing that has a lot of value, or a 40 series John Deere tractor would be another! However, slaughter cows would be an example of a fairly common thing that has a strong value in today’s market. Or, maybe they are not all that common since there has been tremendous herd liquidation due to drought the past couple of years.

Slaughter cow prices generally reach their seasonal price peak in late spring or early summer. They may or may not have already peaked, but that is of little concern given the extremely high price level. Cow condition does influence their total value from both a weight and price standpoint, but slaughter cattle in most any condition are bringing a high price due to the need for lean grinding beef. Specifically, the boxed cow beef cutout value has increased from just over $200 to $270 per hundredweight since the beginning of the year.

Figure 1 contains weekly slaughter cow prices in Tennessee for breaking grade cows. The price of this class of slaughter cows has increased in price by about $35 per hundredweight since the beginning of the year and are $20 per hundredweight higher than any point in 2023. Assuming a 1,200 pound cow, the total value has increased from $1,140 per head to $1,560 per head since the beginning of the year, which is a $420 per head increase. 

The value increase in slaughter cows is being driven by cattle producers hauling fewer of these animals to town, which is seasonally driven by calving season being in full force and the fact that many cattle producers have already culled deep into the cow herd. The value of slaughter cows should remain high for the next couple of years.

Figure 1. Slaughter cow prices for 2024, 2023 and the 5-year average.

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Griffith, Andrew P. “Diamond Rings for Old Things.” Southern Ag Today 4(20.2). May 14, 2024. Permalink