MARKETING...
Feeder Cattle Price Forecast - 4/17/09
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In the Cattle Markets
What are the main drivers of profit risk?
Based on University of Nebraska-Lincoln (UNL) analysis of traditional calf-finishing systems and backgrounding/yearling finishing systems, the average profit differences between the two systems are relatively small and statistically insignificant. However, in UNL research these differences varied greatly from year to year, and profits overall were variable across years.
In further examining what factors tend to be the biggest drivers of that profit variability over time, UNL researchers considered the calf-finishing system and the impact of fed-cattle sales price, feeder-cattle purchase price, corn prices during the feeding period, interest rates, average daily gain, and feed conversion. In the yearling system that included winter backgrounding on cornstalks, summer grazing and fall finishing, UNL considered the impact of fed-cattle sales price, feeder-cattle purchase price, cornstalk and pasture rental prices, corn prices, interest rates, average daily gain, and feed conversion.
The results suggest that risk management efforts may be best directed toward hedging fed cattle and feeder-cattle price risk to minimize profit variability over time. While feeding performance and other variables are also important, most of the profit risk seems to come from cattle prices. Read more.
Exports Approach Pre-BSE Levels
The value of U.S. beef exports in 2008 reached $3.6 billion — or 94% of where it stood in 2003 prior to the first case of bovine spongiform encephalopathy (BSE) in the United States.
Exports to all leading markets were up for the year, by 28% in volume and 38% in value, according to the U.S. Meat Export Federation (USMEF). That means 2009 will likely be the year that the U.S. surpasses the pre-BSE levels in terms of value, though it will probably take at least another year to surpass pre-BSE volumes, according to the Cattlemen's Beef Board (CBB).
For more information regarding U.S. beef trade, click here.
Community Supported Agriculture
Model Evolving, Growing
Community Supported Agriculture (CSA) is blooming in Kentucky. Community Supported Agriculture is a subscription-based program where consumers buy “shares” in a farm's output. This entitles them to season-long regular deliveries of freshly harvested produce or other farm products, such as meat or dairy products.
The CSA concept arrived in this country in 1984 from Switzerland, and by 1986 the first harvest shares in the United States were delivered to consumers in New England. In Kentucky, the idea took off about five years ago. Read more.
Sara Snider
The Source
Record month reflects confidence in AngusSource®
When every dollar counts, cow-calf producers take stock of what they have to offer. They look for ways to add value to their calves. For more than 21,000 of those calves, the owners decided the best way to add value was simply to document it.
During March, 84 Angus producers helped themselves by enrolling their calves in the AngusSource Process Verified Program (PVP). Read more.
HTP Quantifies Angus Advantage
Premiums on Angus-based steer calves set a 10-year record last fall, despite a sagging economy and slumping prices for commodity calves. High-percentage Angus steers netted an extra $34.51 per head at auction over non-Angus contemporaries, smashing previous records both per hundredweight (cwt.) and per head, according to “Here's the Premium” (HTP), a long-term study initiated by Certified Angus Beef LLC (CAB). Read more.
Steve Suther
CAB Corner
Making cows count
Cows can't do math, but their owners should at least do some counting. From financial balance sheets to stocking rates, a precise inventory is a must.
Beyond that, you need cows that are worth owning. Cows that matter, that count because of what they can profitably produce. That's true regardless of herd size.
If you have five cows, you might think this is a simple exercise. It probably is, if there are also five calves with them half of the year. If you have an idle cow, revisit your reasons for owning her. Nobody can afford to throw money away, and raising four out of five calves is a way of doing that. Read more.
USDA Market News
Click here for Livestock Cattle Reports, including Slaughter and Feeder and Replacement Cattle Reports.
Resources for Niche Markets
Click here to learn more about producing natural and organic beef
and/or grass-fed beef.
To view the Angus Almanac, a complete list of
Angus sales, click here.