News Update

April 9, 2014

‘Dressing’ for Success

Cattle feeders live by numbers. Gain, feed efficiency, rations and of course prices — each one matters to the ultimate bottom line, but there’s one figure that may be less understood among cow-calf producers.

“If you spend much time talking with a feedlot manager about components of profitable cattle, it won’t be long until he or she starts talking about dressing percent,” says Mark McCully, Certified Angus Beef LLC (CAB) vice president.

It’s often referred to simply as “yield” though it’s not at all the same as Yield Grade.

“Dressing percentage is simply the percent of a live, finished steer or heifer that ends up in the carcass form,” he says.

The math is pretty straightforward. McCully shares this example: if a 1,300-lb. live steer produces an 819-lb. hot carcass, that number divided by the live weight equals .63 or 63%. A bigger number, or higher yield in this case, is more favorable.

With a typical range in dressing percentage falling between 57% and 67%, what impact does a shift one way or the other have on profit?

“When you put a pencil to it and figure in today’s relatively high prices, those points really add up,” McCully says.

Selling that 1,300-lb. steer at a carcass-weight price of $225 per hundredweight (cwt.) brings up a $117 difference when moving from a dressing percent of 61% to 65%.

Producers used to think of dressing percentage as a packer calculation, but as more cattlemen move to selling on a grid, it figures into the pricing formula.

For more information, please view the full release here.

— Adapted from a release by Certified Angus Beef LLC.

CFTC Reauthorization Bill Passes House Ag Committee

National Farmers Union (NFU) President Roger Johnson issued the following statement on the U.S. House Committee on Agriculture markup of H.R. 4413, the Customer Protection and End-User Relief Act on April 9:

“Well-functioning, competitive and transparent markets are critical to family farmers, who use commodity derivatives markets as a hedging and price discovery tool. The Dodd-Frank Act authorized long-overdue derivative market reforms and the enforcement of new and existing trading rules to protect commodity-dependent businesses, end-users and consumers. Reauthorization of the Commodity Futures Trading Commission (CFTC) must reinforce, not undermine, Dodd-Frank’s provisions and CFTC’s expanded oversight.

“I am pleased that a study on the impact of high-frequency trading is included in the bill, but there ought to be further studies on excessive speculation and its damaging effects on price discovery and the marketplace in general.

“Furthermore, it’s disappointing that a self-funding mechanism or user-fee for the CFTC was not included in the bill. The annual appropriations battles over CFTC funding are disruptive to the agency’s regulation of the $690 trillion swaps market. While these and other priorities are considered in the legislative process, NFU seeks to continue to work with Congress to enact an effective final bill.

“Additionally, none of the two current CFTC commissioners or three pending nominees has agricultural experience, in spite of the commission’s jurisdiction over agricultural commodity derivatives and the underlying physical markets. I urge Congress to stress to the administration the importance of qualified CFTC nominees who understand the unique needs of farmers and commodity end-users.”

— Adapted from a release by Brittany Jablonsky for the National Farmers Union.

Weather Threatening Continued U.S. Beef Herd Expansion

When it comes to America’s beef herd expansion, success may come down to a Final Four of Kansas, Nebraska, Oklahoma and Texas.

“These four states accounted for 31% of the U.S. beef cow herd on Jan. 1,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist. “The ability of these states to maintain herd expansion plans will likely determine the overall impact on the U.S. beef cow inventory this year.”

Areas of drought and northern climes struggling through the last vestiges of winter potentially stand to have a significant negative effect on U.S. beef herd expansion.

“Moisture conditions are adequate to abundant in most of the eastern half of the country,” Peel said. “Marginal drought conditions are the norm in the middle of the country with persistent severe drought conditions throughout much of the nation’s western region.”

Forage and crop conditions should improve rapidly in the Delta and Southeast in the next few weeks. Cool temperatures — including soil temperatures — are delaying forage growth and crop planting in the Midwest, Northern Plains and northern Rocky Mountain region. Warm and dry conditions are forecast for the Southwest and Western mountain regions, as well as the West Coast.

“Producers in wet regions will move forward with production plans given the advent of warmer temperatures,” Peel said. “Producers in drought areas will remain entrenched waiting for improving conditions.”

Texas, Oklahoma, California, Nevada and New Mexico currently have the largest areas of severe drought.

“It’s the beef producers in the marginal drought areas who must be prepared to move quickly to either act aggressively if conditions improve or to act defensively if drought conditions worsen,” Peel said.

For more information, please view the full release here.

— Adapted from a release by Donald Stotts for Oklahoma State University Extension.

Local Ranching Event Scheduled April 17 in Brady

The Texas and Southwestern Cattle Raisers Association (TSCRA) will host a ranch gathering Thursday, April 17, at the Heart of Texas Events Center in Brady. Registration for the gathering begins at 5:30 p.m. followed by a complimentary beef dinner. The event is free and open to the public.

The Heart of Texas Events Center is located at 804 San Angelo Highway.

TSCRA Special Ranger H.D. Brittain will update ranchers on cattle thefts in the area and how they can better protect their livestock and equipment.

All members of the press are invited to attend.

Please RSVP to 1-800-242-7820, ext. 192, or rsvp@tscra.org.

The gathering is sponsored by Capital Farm Credit, Novartis Animal Health and Winters Family Beef.

Folks that sign up as a TSCRA member at the gathering will receive a free metal gate sign courtesy of Bayer Animal Health and New Holland.

For more information, please view the Angus Journal Virtual Library calendar of upcoming events here.

— Adapted from a release by Texas and Southwestern Cattle Raisers Association.

Forage Systems and Fertilizer Strategies Training
Set April 25 at Overton

Farmers and ranchers who want to get the most bang for their fertilizer dollar and have a steak lunch in the bargain should attend a Texas A&M AgriLife Extension Service training in Overton on April 25, advise the training’s planners.

“Fertilizer prices change, and producers should have a plan in place to take advantage or deal with these changes,” said Jason Banta, AgriLife Extension beef cattle specialist, Overton. “This program will discuss strategies for getting the most out of your fertilizer dollar, managing fertilizer risk, and real-world, cost-conscious fertilizer strategies.”

“Forage Systems and Fertilizer Strategies” will be from 9:30 a.m.-5 p.m. at the Texas A&M AgriLife Research and Extension Center, 1710 N. 3053 Farm-to-Market Road, Overton.

Registration is $60 per person and will include snacks, a steak lunch and educational materials. Attendance will be limited to the first 50 people who register by the April 18 deadline. To register go to https://agriliferegister.tamu.edu or call AgriLife Extension Conference Services at 979-845-2604.

“When it comes to alternative sources of fertilizer, always get more information, ask questions and find out exactly what you are paying for,” said Vanessa Corriher-Olson, AgriLife Extension forage specialist, Overton. “If something sounds too good to be true, it probably is too good to be true. This program will discuss some appropriate alternatives, as well as some that could be deemed ‘snake oils.’ ”

Driving directions to the Overton center may be found at http://overton.tamu.edu and clicking on the link “Center Information” on the right. For more information, call Michelle Sensing at the Overton center, 903-834-6191.

For more information, please view the Angus Journal Virtual Library calendar of upcoming events here.

— Adapted from a release by Robert Burns
for Texas A&M AgriLife Communications.

— Compiled by Lynsey Meharg, intern, Angus Journal.