Category: Livestock Marketing

December 1st hay stocks and 2023 production were included in the annual Crop Production Summary released recently by USDA. This report gives the best estimates of the amount of hay available for the winter at the state level.

For this article I’ve focused on states in the Southeastern region excluding Oklahoma and Texas. The 11 states included are AL, AR, FL, GA, KY, LA, MS, NC, SC, TN, and VA. These states represented 18 percent of total U.S. hay production during 2023. I’ve excluded OK and TX only to prevent their large totals from overshadowing the dynamics in the rest of the southeastern region. Hay production in OK and TX is up a combined 42.5 percent with OK hay stocks almost double 2022 levels when the states were suffering from severe drought. 

Despite 2023 production increasing by 4 percent over 2022 in this 11-state region, the estimated December 1 hay stocks dropped 1.1 percent and were at the lowest level since 1988. 2023 is only the 3rd time since 1986 that hay stocks decreased in a year when production increased for this region which would indicate that more hay was used or transported to another region sooner than usual. For comparison, total U.S. hay production increased by 6.3 percent and December 1st hay stocks were 6.9 percent higher than in 2022.

There were noteworthy state-level differences within the region as shown in the maps below. While some states experienced increases, AL, LA, and MS all saw decreases in production in 2023 and also saw significant decreases in December 1 hay stocks. This is likely no surprise as these states were impacted severely by the drought conditions that developed and persisted through the second half of 2023. Producers in these states had generally lower production and had to start feeding hay sooner when pasture conditions deteriorated.   

Lower hay stocks in some states have implications for heifer retention and cow culling decisions. Producers already facing high input costs are less likely to carry cows or heifers through the winter when hay supplies are low. It will be interesting to see the differences in inventory across states when the annual January 1 Cattle Inventory Report is released on January 31st.

Maples, Josh. “Lower Hay Stocks in Some of the Southeast for Winter.” Southern Ag Today 4(4.2). January 23, 2024. Permalink

More cattle on feed than a year ago late in 2023 was a factor in falling fed and feeder cattle prices.  USDA will release its January Cattle on Feed (COF) report on Friday.  This SAT takes a look at what we might expect in the report.

There is a group of market analysts that do COF “pre-report” estimates of their expectations for the report. Analysts pre-report estimates are published in major business outlets and industry newsletters.  These are my estimates of what I expect in the upcoming report.  

I expect December marketings to be about 99.4 percent of last year.  Marketings have been below the previous year since May and their decline has been a source of concern for some.  But, fewer cattle marketed is related to fewer cattle on feed and a slowdown in Saturday fed cattle processing by meat packers.  

My estimate for December placements is 98.0 percent of last year.  Placements typically decline sharply during the last couple months of the year and this year should be no exception.  The various data points that many analysts use offer a mixed bag of information.  The number of head sold that are used to calculate the CME feeder cattle index was about 2.5 percent lower in December compared to last year.  But, feeder cattle imports from Mexico were up about 7,000 head and the sales receipts data from USDA were up almost 14 percent. Improvements in wheat pasture conditions may have held some more feeders in the country.  Lower fed cattle futures market prices and some unprofitable closeouts for unhedged cattle may help to hold back placements.

Placements a little bit bigger than marketings means that the estimated number of cattle on feed on January 1^st remains at about 102.5 percent of last year.  More cattle on feed remain with us for the time being.  Slower marketing rates means more days on feed and likely heavier weights although, this latest winter storm may slow weight gains and reduce dressed weights. 

While the COF report is only focused on feedlots for cattle ranchers in the South, that’s where most of the calves head after weaning.  The report does give some insight into near term cattle and beef supplies and some direction for prices in coming months.

Anderson, David. “More COF Still?” Southern Ag Today 4(3.2). January 16, 2024. Permalink

USDA released its Hogs and Pigs report at the end of December.  In addition to breeding and market hog inventories and farrowing intentions for early 2024 the report includes data on pigs per litter and litters per breeding animal.  The pork industry has experienced tremendous productivity gains over the last several decades.  Among those gains are nutrition and genetics, feed efficiency, dressed weights, but also those related to the sow productivity, like litters per year and pigs per litter.  Last week’s SAT mentioned dressed weights as a source of beef production efficiency gains.  This week’s will examine pigs per litter and its contribution to production and prices for the coming year.  

In 1998, the average litter of pigs included 8.7 pigs.  A boom in productivity followed with the latest Hogs and Pigs report indicating pigs per litter at 11.7 pigs.  The rapid growth through the early 2010’s was halted by porcine epidemic diarrhea virus (PEDv) that cut pigs per litter by about 0.75 head, or 7.6 percent.  Growth began again after the worst effects of PEDv passed but at a lower plane for several years.  Pig per litter growth remained fairly flat from about 2019 through 2022 but, jumped rapidly in 2023.  A variety of disease factors combined to limit growth but as those pressures have lessened pigs per litter has spiked higher.

So, what does this mean for the hog market over the next few months?  Estimated farrow-to-finish returns have been mired in large losses for 10 of the last 12 months.  In fact, hog producers have been losing money and reducing herds worldwide for some months.  The U.S. breeding herd was estimated to be 5.999 million head, the fewest since December 1, 2014.  Farrowing intentions for the December through May period are expected to be the fewest since 2015.  But, the increase in pigs per litter is large enough to keep projected commercial hog slaughter and pork production above a year ago in 2024.  More pork production will keep the pressure on hog prices and may limit upside potential.

Anderson, David. “More Pigs.” Southern Ag Today 4(2.2). January 9, 2024. Permalink

The title of this article is not meant to incite regret over our holiday excesses but, instead, to take a look at cattle dressed weights in late 2023 that set new record highs.  Heavier weights contributed to more beef production than expected helping to pressure prices late in the year.  

Fed cattle weights have a distinct seasonal pattern through the year.  They usually hit their seasonal lows in May-June and their highs late in the year.  Days on feed, placement weights, weather, and prices all effect dressed weights.  Dressed weights were below 2022 until early May contributing to some tighter beef supplies.  Steer dressed weights climbed seasonally, about equal to the year before until late in the year when they climbed to a record 940 pounds.  The increase in steer dressed weights contributed an additional more than 3 million pounds of beef per week in November and December.  

Record high dressed weights should not be a surprise to long-term participants in the cattle market.  The steady growth in weights over time has been one of the remarkable achievements in productivity growth of the industry.  In 1964, steer dressed weights averaged 662 pounds per head.  In 2023, steer dressed weights were an estimated 907 pounds per head.  Weights in 2022 hit an annual record high of 910 pounds.  The 3 pound annual decline in 2023 is largely due to lower weights in early 2023.  Bigger cattle, feeding efficiency gains, and economics have driven this long-term trend of heavier weights.

What’s to come in 2024?  We should expect the seasonal pattern to continue.  But, the seasonal pattern will be impacted by days on feed.  We entered December 2023 with more cattle on feed over 120 days than the year before, likely meaning some heavier weights are ahead at least early in the year.  Lower feed costs than the year before implies some heavier weights.  Winter weather will be important in coming months.  A series of severe storms would pull down weights.  Beef demand will be a major factor in weights.  A boost in consumer demand resulting in higher cutout values, boosting margins and fed cattle prices would speed up fed cattle marketings and pull down weights.  Fed cattle weights will be something interesting to watch in the coming year.  

Happy New Year!

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Anderson, David. “Weight Gain.” Southern Ag Today 4(1.2). January 2, 2024. Permalink

Environmental Quality Incentives Program (EQIP) has been a very popular program with livestock producers for many years.  EQIP is a working lands conservation program administered by the Natural Resources Conservation Service (NRCS) to provide conservation programs for farmers, ranchers, and forest landowners. It’s meant to help producers improve water and air quality, build healthier soils, and improve wildlife habitats by providing both financial and technical assistance. The good news for livestock producers is that fifty percent of the EQIP funding is mandated for livestock related practices. 

Some practices that cattle producers may find beneficial are fencing, cross fencing, forage harvest management, heavy use area protection (gates, feeding areas), herbaceous weed control, pasture and hay planting, nutrient management, livestock shelter protection, prescribed grazing, watering facilities.

Other practices that are livestock related are in the following list. (This is not a complete list.)

Access control

Animal mortality management

Brush management 

Composting facility 

Conservation Crop Rotation

Constructed Wetland

Contour Farming 

Dam

Energy Efficient Agricultural Operation, Insulation, lighting

Firebreak

Groundwater testing

Irrigation 

Land Clearing

Livestock Pipeline

Obstruction Removal

Organic Management

Pond

Short term storage of Animal waste and By-products

Silvopasture

Sinkhole Treatment

Stream crossing

Watering Well

Woody Residue treatment 

Many of the eligible practices might also overlap with production systems related to carbon payment opportunities.  If you are thinking about carbon options, it might be worth exploring the potential for EQIP participation.  Several past SAT articles have discussed carbon programs and contracts here.   

There are many practices that NRCS can provide financial and/or technical assistance that is beneficial for environment and sustainability. Look at the EQIP page for more information.

https://www.nrcs.usda.gov/programs-initiatives/eqip-environmental-quality-incentives

Here are some important points to keep in mind in learning more about EQIP.  

To get started, you need to register with the Farm Service Agency to participate in the USDA programs. 

https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/Outreach/pdfs/Brochures/4%20Steps%20to%20Assistance.pdf

Even though the deadline for signing up for is typically the end of October or early November, producers are encouraged to sign up any time during the year.

Available practices and practice standards can vary by state and by year so check with you local NRCS office to see what is available in your area. State contacts can be found at:

https://www.nrcs.usda.gov/conservation-basics/conservation-by-state

Finally, get to know you’re the local USDA staff at your USDA service center or offices. They can provide valuable information on how best to get assistance for the programs that are offered.

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Runge, Max. “EQIP Overview for Livestock Producers.” Southern Ag Today 3(52.2). December 26, 2023. Permalink