Category: Livestock Marketing

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 November estimates of retail meat prices were released last week by the USDA Economic Research Service (ERS). This dataset sheds light on average retail meat prices using data from the Bureau of Labor Statistics (BLS). Retail prices for beef, poultry, and pork were all up sharply from year ago levels. The all-fresh beef retail price was reported at $7.52 per pound during November. This was a few cents below the October level but still about 21 percent above the same month a year ago. Pork and chicken retail prices were also higher as compared to a year ago.  Retail pork prices were up about 18 percent and chicken prices were up about 10 percent compared to November 2020.

The monthly BLS Consumer Price Index summary was also released last week and showed the all-items price index has increased 6.8 percent over the past 12 months. This is the largest 12 month increase since 1982. Higher energy prices were a contributor to the CPI increase. The energy price index was up 33 percent over the past 12 months. The food price index was up 6.1 percent over the past 12 months with meat price increases being a key factor. 

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Maples, Josh. “Meat Prices and CPI.” Southern Ag Today 1(51.2). December 14, 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

Beef cow slaughter has been higher than year-ago levels for most weeks in 2021. National beef cow slaughter is up about 10 percent (or about 6,000 head weekly average) since July over the same period of 2020. In the southeast reporting region which includes AL, FL, GA, KY, MS, NC, SC & TN, beef cow slaughter has been about 25 percent higher since July 2021 than it was during the same period of 2020. That is equivalent to an additional 2,000 head each week on average. This region accounts for about 15 percent of national beef cow slaughter. There has been some additional cow processing capacity brought online in the southeast in 2021 which helps explain the weekly increase in slaughter. But where are the cows coming from? Are producers in the southeast culling cows deeper than previously expected? Weekly auction receipts shed some light on these questions.

Combined weekly auction receipts for slaughter cattle (reported as both cows and bulls) from GA, KY, and MS are up 3 percent since July compared 2020. That 3 percent increase equals an additional 128 head weekly average. The data is messy, and I don’t have the data for the other 5 states in the region, but the receipts don’t suggest enough of an increase in the number of cows being culled in the southeast to support the big increase in beef cow slaughter in the region. It seems likely that a good portion of the increase in slaughter are cows coming from other regions. Backhauling cows is likely a contributor when calves or feeder cattle are trucked from the southeast to other regions and cull cows come back. The January Cattle Inventory report will tell a more complete story of the changes in cows in each state. 

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Maples, Josh. “Huge Cow Culling in Southeast? Not So Fast, My Friend!” Southern Ag Today 1(49.2). November 30, 2021. Permalink