News Update
November 1, 2011
In the Cattle Markets – Week of Oct. 25
This week the 5-area fed steer carcass weights exceeded 900 pounds (lb.). I believe that is a record. Weights have been running above year ago levels for most of 2011. This probably is partially a result of negative feeding margins for much of the year and higher cattle prices. This may not seem intuitive at first, but let’s consider the economic forces. If I am losing money on a pen of cattle, I am looking for every advantage to try and salvage a few more dollars per head. Even though we have had higher feeding costs in 2011, the fed cattle price per pound has still exceeded the cost per pound of gain. Therefore, a feeder has an economic incentive to try and add a few more pounds to those cattle before selling them. A feeder will push the limits of what a packer will allow in terms of carcass weight up to the point of being docked for too heavy of a carcass weight.
Since August the Choice-Select spread has been steadily increasing. This past week it exceeded $18 per hundredweight (cwt.). That is also a near record high. That provides a real incentive for feeders to try and get more cattle to grade Choice. Once a feeder has cattle on feed, the genetics are set, so that won’t affect the percentage grading Choice. There really are only two main management tools to increase the percentage of cattle grading Choice and they are related: 1) be less aggressive with implants and 2) feed the cattle longer. Typically, if you are less aggressive with implants, you are also going to feed the cattle longer. However, you may lose as much in feed efficiency in this scenario as you gain in a higher price by selling more Choice grading cattle. Alternatively, you can continue the same implant strategy and still feed the cattle longer, and therefore have heavier cattle to sell.
This all works just fine until too many feeders end up with too many heavyweight or overfat cattle. Then packers usually have the upper hand in price negotiations, and the discounts for heavy and overfat cattle become significantly larger. From the feedlot perspective, perhaps some caution is warranted given the short term economic incentives to produce heavier cattle. Don’t get them too big or too fat.
The fed cattle market was higher this past week. Most trade took place on Thursday this last week. Prices were at mostly $121 on a live weight basis and were $191 on a dressed basis. Choice boxed beef prices were lower this week. The Choice-Select spread increased and is wider than the typical level. Feeder cattle prices were mostly higher this past week compared to last week’s prices. Montana prices were steady for heavier feeders and higher on calves. Nebraska prices were lower for yearlings and higher for calves this week. Oklahoma prices were higher for yearlings and were higher for calves compared to last week. Corn prices were steady with last week using mid-week prices. Dried distillers’ grain prices were $3 per ton higher in Nebraska for the week.
Panhandle Farm and Ranch Management
Symposium Set for Nov. 30 in Amarillo
Drought issues will be a primary topic of the 27th annual Panhandle Farm and Ranch Management Symposium hosted by the Texas AgriLife Extension Service Nov. 30 in conjunction with the Amarillo Farm and Ranch Show.
The farm show will be Nov. 29-Dec. 1 at the Amarillo Civic Center. The symposium immediately follows the 11th annual Texas Commodity Symposium and Amarillo Chamber of Commerce Ag Appreciation Luncheon. Registration will be from 1-1:15 p.m. in the Grand Plaza Room.
There is a $2 admittance fee for the Amarillo Farm and Ranch Show, and a $10 registration fee for the Panhandle Farm and Ranch Management Symposium.
“This year our topics revolve around the drought situation faced by much of the Panhandle,” said Brandon Boughen, AgriLife Extension agriculture and natural resources agent for Potter County. “Drought conditions affect much more than what we normally think about, like the flight patterns of commodity pests and livestock parasites.”
Program topics and speakers will include:
- Laws and regulations, Lavon Harmon, Texas Department of Agriculture inspector.
- Controlling weeds during drought and other weed issues, Brent Bean, AgriLife Extension agronomist.
- The Worst of the Worst Dust Bowl Areas, B.A. Stewart, Dryland Agriculture Institute, West Texas A&M University
- Monitoring moths with pheromone traps for the Texas High Plains, Ed Bynum, AgriLife Extension entomologist.
- “i-WHEAT,” an information-driven wheat pest management system, and progress on Southwestern corn borer and western bean cutworm models, Jerry Michels, Texas AgriLife Research entomologist.
- Parasite control for livestock animals, Sonja Swiger, AgriLife Extension entomologist in College Station.
The program will offer four Texas Department of Agriculture continuing education units for pesticide applicator participants: one in laws and regulations, one-and-a-half in general, one-half in drift management and one in integrated pest management, Boughen said.
For more information, contact Boughen at 806-373-0713 or bwboughen@ag.tamu.edu.
Live Cattlemen to Cattlemen to Address
State of Cattle Industry
Drought; shrinking herd size; passage of the much anticipated free trade agreements; the outstanding proposed change to the U.S. Department of Agriculture (USDA) Grain Inspection, Packers and Stockyards Administration (GIPSA) marketing rules; and record cattle prices have taken the U.S. beef cattle industry on a wild ride in 2011. The National Cattlemen’s Beef Association (NCBA) has been fighting for U.S. cattlemen and women each step of the way. Expert panelists will address these other important issues during NCBA’s Cattlemen to Cattlemen live call-in show Nov. 1, 2011, on RFD-TV at 8:30 p.m. EDT. Viewers will be able to ask questions of the panelists by calling 1-888-824-6688 or by emailing C2C@beef.org.
Among the panelists will be NCBA President and Montana rancher Bill Donald; NCBA CEO Forrest Roberts, NCBA Vice President of Government Affairs Colin Woodall; and CattleFax Market Analyst Kevin Good.
“There is a lot of change in the beef cattle industry this year. We’ve experienced some major challenges but we’ve also had some significant wins in Washington, D.C.,” said Donald. “This live program will give viewers a chance to understand how these developments are having a positive impact on their livelihoods now and into the future.”
Viewers are also going to be encouraged to join NCBA. NCBA membership staff will be on hand to answer membership inquiries and talk to callers live about special membership incentives at 1-866-BEEF-USA. The program will be re-broadcast on RFD-TV Wed., Nov., 2, 2011, at 10:30 a.m. EDT and Sat., Nov. 5, 2011, at 9 a.m. EDT. In addition, all episodes of NCBA’s Cattlemen to Cattlemen are available on the program’s website at www.cattlementocattlemen.org. The program is also on Facebook and can be followed on Twitter.
Premiering in February 2007, NCBA’s Cattlemen to Cattlemen is an award-winning program providing information on the U.S. beef cattle industry. Sponsors of the program include Purina Mills, John Deere, Igenity, Pfizer Animal Health, Merck Animal Health and Boehringer Ingleheim Vetmedica Inc.
Income Tax Management Program Set for Nov. 18
A tax management program will be offered to agricultural producers and tax preparers from 9 a.m. to noon CST Friday, Nov. 18, at 11 interactive video sites in North Dakota.
The North Dakota State University (NDSU) Extension Service and Internal Revenue Service (IRS) are sponsoring the program.
It will feature presentations by Ann Makres, IRS; Steve Eckroth, Eide Bailly, Bismarck; Brenda Laub, CPA, Valley City; Steve Troyer, Eide Bailly, Fargo; and Andy Swenson, NDSU farm management specialist.
Experts will provide federal income tax updates and tax management alternatives while there is still time to implement year-end tax management decisions.
Topics include:
- Tax planning tuneup
- IRS issues
- 1099s
- Payroll
- Depreciation
- Using LLPs
- Domestic production deduction
- Beginning farmer incentives
A session on year-end tax planning will provide an overview of when to accelerate or defer income in conjunction with expense timing and income averaging to manage tax liabilities now and into the future. Four question-and-answer periods are scheduled during the three-hour program. Preregistration is required because seating is limited. The cost for the program and materials is $12.
Interactive video sites for the program are Bismarck State College; School for the Deaf, Devils Lake; Bottineau County Courthouse, Bottineau; Dickinson State University; NDSU, Fargo; Grand Forks County Office Building, Grand Forks; James Valley Career and Technology Center, Jamestown; Richland County Courthouse, Wahpeton; Williams County Courthouse, Williston; and NDSU Research Extension Centers in Minot and Langdon.
For additional information or to register, call the NDSU Extension Service in Fargo at 701-231-8642.
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