Category: Livestock Marketing

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

Poultry growers across the southeastern broiler belt are watching heating fuel prices closely. Most commercial poultry houses are heated with either liquid propane (LP) and natural gas (NG) and heating costs can account for upwards of 40% of the annual cost of production.  Currently, commodity trading prices of LP and NG are at 5-year highs. The reasons for this are multi-faceted but are closely related to a national supply deficit approaching 30 million barrels of LP per the latest U.S. Energy Information Center’s inventory update. Additionally, the NG crisis in Europe and Asia created a driver for prices to move higher as traders buy BTUs across the energy spectrum. Since LP is primarily a byproduct of crude oil & NG production, recent disruptions in offshore oil and the overall decrease in domestic oil production has shortened LP supply. Natural gas price has moved up 2.5x in the past year. This has a major impact on propane prices as natural gas acts as a price floor for propane. These factors, along with higher trucking costs, are indicators that LP prices could continue to rise this winter and reach all-time highs in the short-term.  The bottom line for poultry growers is to do all they can now to prepare for significantly higher heating fuel costs this winter. This includes considering available price security options sooner rather than later and doing all the tightening up and insulating of their houses they can manage. It could be a long winter. 

Brothers, Dennis. “Commercial Poultry Input Costs Heating Up!” Southern Ag Today 1(43.2). October 19, 2021. Permalink