ANGUS BEEF BULLETIN EXTRA

November 20, 2018 | Vol. 11 : No. 11

management

Timing the Market

A ranch view of grid marketing.

Hitting a target takes practice, careful calibrations, attempts and recalibrations over time. Cow-calf producers make decisions every day, but how many of those relate to the calves’ ability to realize their potential and hit a high-quality beef target?

“You and I as cow-calf producers unhook ourselves from our product very early in the life cycle of that animal,” said Paul Dykstra, beef cattle specialist for Certified Angus Beef LLC. “It’s not that we don’t care about what happens to our calves as they go on, or that they don’t have value to the next owner. It’s the fact that we don’t ever learn about that.”

In The Cattle Markets

Beef cutout values surge higher.

It’s not unusual for the cutout to increase during October, and that occurred again this year. The daily boxed-beef cutout value surged $5 per hundredweight (cwt.) during the week to $218.50, its highest value since June, to close out the week ending Nov. 2. Choice beef is not the only quality grade to experience price increases as beef production grows seasonally.

Retaliatory Tariffs Could Negate USMCA Export Gains

New analysis warns of potential for further export declines if NAFTA were abandoned.

Market access improvements included in the United States-Mexico-Canada Agreement (USMCA) will lead to an expansion of U.S. agricultural exports by $450 million, mostly in the dairy and poultry sectors, according to a new analysis. However, those gains will be more than negated by retaliatory measures taken by Canada and Mexico in reaction to the United States’ decision to raise import tariffs on steel and aluminum imports.

The analysis, How U.S. Agriculture Will Fare Under the USMCA and Retaliatory Tariffs, was commissioned by Farm Foundation and completed by Purdue University agricultural economists Dominique van der Mensbrugghe, Wallace Tyner, and Maksym Chepeliev.

The Source

Trick or treat.

We don’t get little goblins out in our neck of the woods very often, but this year I had a surprise! A neighbor’s 2-year-old granddaughter wanted to pet the horses in the pasture next to our house. I told her there were some baby calves to feed, too. Then, we could catch the horses and she could pet and ride one! That brought squeals of laughter, and her good witch tutu started bouncing up and down. It’s pretty darn gratifying to help someone have a special day.

I have not seen too many ranchers wearing a good witch tutu, but some can get pretty darn excited when their calves sell well. Really, I don’t blame them either. While using good genetics and having an outstanding reputation helps, some days the market and prices work as planned. Those days, it’s a treat to be in the cattle business; other days, not so much.

Prime Tonnage Up

Heifers factor into Prime grade uptrend.

We must take a big step back from the details of beef market and production trend data once in a while to gain perspective. Currently, that distant view shows one of the largest changes in 2018 is the percent of fed-steer and heifer carcasses reaching the USDA Prime quality grade, touching a record 8.9% the second week of October, adding to an already impressive 33% increase in Prime tonnage so far this year.

On Target

Quality in the cow herd

Market cows, the culls you sell, are a key source of lean trimmings to the beef supply chain and often represent 15%-25% of gross income. However, the decision to sell a cow is not an active management choice in most operations. Commercial cattlemen “market” cows as a byproduct of the cow’s inability to remain productive, not because they want to increase income from cull cows.

That’s certainly different from the feeder and fed-cattle scene. For one thing, those cows reflect delayed genetic trends in the herd, assuming the culls are older than average. The 2007 National Beef Quality Audit (NBQA) Market Cow Report was conducted prior to the significant drought and culling across the United States in the next several years. The 2016 report offers insight as to how genetics within the commercial herd have changed relative to type and carcass characteristics, due to management and drought-induced culling.

Tyson Talks Relationships

Vice president of cattle procurement at Tyson Fresh Meats discusses the positive and fast response by cattlemen to market signals.