Feed Rationing
(DTN) Good news is getting hard to find in Midwestern corn fields, and that has renewed concerns among livestock producers that feed rationing could become a reality this fall.
Heavy cow culling has increased short-term feed needs in the cattle industry, as more calves are put on corn.As DTN editors followed the Pro Farmer Midwest Crop Tour last week, they reported declining yield estimates in state after state. Kurt Lawton, Crop/Technology editor, says he saw miles of battered fields following extensive hail storms in many areas. Extensive heat had also taken a toll on yields, along with late planting. Estimates now have Illinois average yields down by 6.3%, Indiana by 14%, Iowa by 2.8%, Ohio by 6%, Nebraska by 3% and South Dakota by 1.8%.
Where will this leave livestock producers, as they try to limp into new crop feed supplies? Kevin Good, senior market analyst with Cattlefax, says it’s true the corn crop is getting a lot shorter. But he says the issue is bigger than the size of the corn crop. The drought, he believes, has not been fully factored into the outlook for the industry.
“You just can’t underestimate the impact the drought is having in the Southern Plains, as well as in parts of the South and Southeast,” he says. “Corn is an issue, yes, but hay is going to be a big problem this year. The further north you go, the more roughage and feed you’ll find available. But to the South there’s very little. Right now we just see people trying to stretch to the new crop, and hope it’s enough.”
Good adds that the herd liquidation that’s been taking place over the last several weeks, has actually bumped up feed demand. “When you kill the cows, the calves are going on feed. We’ve seen the number of calves on feed as big as it’s been in recent memory, up 8% in August. So the liquidation has added demand for corn from a feedlot standpoint. We’ve just succeeded in building demand, even though it’s on a short term basis.”
Tight or non-existent feed supplies were a concern all the way back in March for Leon Sheets. Sheets heads up Ionia Pigs, a 1,200-sow, farrow-to-feeder operation outside of Ionia, Iowa. Also a corn farmer, Sheets says he’s been concerned about feed rationing among all livestock producers, as well as cost.
For now he says it appears there are pockets where it may be very challenging for producers to get feed, and in those cases they will need to seek out alternatives. “Since the first of July we’ve seen a lot of yield estimates lowered, including on my farm,” he says.
Sheets says they believe their yields have dropped 40 bushels, from an average of around 200 bushels per acre. And asked whether at current prices it makes sense to feed corn to his pigs, he says that’s something every producer needs to give serious consideration to.
“If you sell corn off the combine at $7 per bushel, how much more are you going to get by feeding it through the livestock,” he asks. “For some producers there is a value in the manure, which goes back onto the crop ground. So there are a lot of ways to look at this. But if you’re losing money with $7 corn going into your livestock you have to do the math.”
One state may hold a lot of the cards, when it comes to what happens in the feed market this fall. Texas, where 1 out of every 6 beef cows in the U.S. are found, has continued to cull huge numbers of animals, and we’re not even to the point in the year when most culling occurs, says David Anderson, Texas AgriLife Extension livestock specialist.
“We’re beginning to see numbers back off at auction markets,” he reports. “There were some markets telling folks a couple of weeks ago to just stay home, because they didn’t have room for any more animals. But I don’t think the sell off is over yet.”
Anderson says nationwide fall is the biggest time for culling, after calves are weaned. A lot of decisions are made in the fall regarding cows, and with the historically strong price for these culls, he believes we’ll see more moved to auction.
“It’s true a lot of people have been forced to make that decision earlier than normal,” he says. “We’ve moved a lot of cows, and I don’t know how many are left. Yet the cull cow market has stayed up quite well given the numbers sold. We have a sense that folks are trying to hold on till the fall, buying up hay as they can get it.”
Moving into the fall months, if the drought doesn’t lift, Anderson adds the state will already begin to see the stage set for a tough 2012, because with no rains wheat pastures can’t be planted. And even if conditions improved dramatically, he says rebuilding will be slow and expensive.
“Where the heifers and cows will come from for rebuilding is a big issue. We’ve moved so many to slaughter that it’s going to be very expensive to build back up. We’ve seen declining numbers for several years already due to input costs, but now we’re looking at a situation that will be hard to turn around.”
But Anderson thinks this period in history may also represent a generational turning point for the state’s cattle business.
“I hear a lot of talk about guys going out, particularly some of the older ranchers. This was a good time for them to retire, with the strong cull cow prices. But that pasture will still be there, and they may lease it. That could be an opportunity for the next generation to get in, or for the smaller guys to increase the size of their herd. So I see this as an opportunity in a way. But first we are going to have to work through the feelings people have about this drought we’re living through.
‘I often think a drought is one of the worst things you can deal with. It’s with you every day and you never know when it will be over. With a flood as bad as it is, you know it will crest, and then you clean up and move on. But this is something we can’t put behind us, because you never know when it’s over. People are going to be very cautious when it comes to rebuilding. One rain won’t convince them it’s over”
http://www.dtnprogressivefarmer.com
Heavy cow culling has increased short-term feed needs in the cattle industry, as more calves are put on corn.As DTN editors followed the Pro Farmer Midwest Crop Tour last week, they reported declining yield estimates in state after state. Kurt Lawton, Crop/Technology editor, says he saw miles of battered fields following extensive hail storms in many areas. Extensive heat had also taken a toll on yields, along with late planting. Estimates now have Illinois average yields down by 6.3%, Indiana by 14%, Iowa by 2.8%, Ohio by 6%, Nebraska by 3% and South Dakota by 1.8%.
Where will this leave livestock producers, as they try to limp into new crop feed supplies? Kevin Good, senior market analyst with Cattlefax, says it’s true the corn crop is getting a lot shorter. But he says the issue is bigger than the size of the corn crop. The drought, he believes, has not been fully factored into the outlook for the industry.
“You just can’t underestimate the impact the drought is having in the Southern Plains, as well as in parts of the South and Southeast,” he says. “Corn is an issue, yes, but hay is going to be a big problem this year. The further north you go, the more roughage and feed you’ll find available. But to the South there’s very little. Right now we just see people trying to stretch to the new crop, and hope it’s enough.”
Good adds that the herd liquidation that’s been taking place over the last several weeks, has actually bumped up feed demand. “When you kill the cows, the calves are going on feed. We’ve seen the number of calves on feed as big as it’s been in recent memory, up 8% in August. So the liquidation has added demand for corn from a feedlot standpoint. We’ve just succeeded in building demand, even though it’s on a short term basis.”
Tight or non-existent feed supplies were a concern all the way back in March for Leon Sheets. Sheets heads up Ionia Pigs, a 1,200-sow, farrow-to-feeder operation outside of Ionia, Iowa. Also a corn farmer, Sheets says he’s been concerned about feed rationing among all livestock producers, as well as cost.
For now he says it appears there are pockets where it may be very challenging for producers to get feed, and in those cases they will need to seek out alternatives. “Since the first of July we’ve seen a lot of yield estimates lowered, including on my farm,” he says.
Sheets says they believe their yields have dropped 40 bushels, from an average of around 200 bushels per acre. And asked whether at current prices it makes sense to feed corn to his pigs, he says that’s something every producer needs to give serious consideration to.
“If you sell corn off the combine at $7 per bushel, how much more are you going to get by feeding it through the livestock,” he asks. “For some producers there is a value in the manure, which goes back onto the crop ground. So there are a lot of ways to look at this. But if you’re losing money with $7 corn going into your livestock you have to do the math.”
One state may hold a lot of the cards, when it comes to what happens in the feed market this fall. Texas, where 1 out of every 6 beef cows in the U.S. are found, has continued to cull huge numbers of animals, and we’re not even to the point in the year when most culling occurs, says David Anderson, Texas AgriLife Extension livestock specialist.
“We’re beginning to see numbers back off at auction markets,” he reports. “There were some markets telling folks a couple of weeks ago to just stay home, because they didn’t have room for any more animals. But I don’t think the sell off is over yet.”
Anderson says nationwide fall is the biggest time for culling, after calves are weaned. A lot of decisions are made in the fall regarding cows, and with the historically strong price for these culls, he believes we’ll see more moved to auction.
“It’s true a lot of people have been forced to make that decision earlier than normal,” he says. “We’ve moved a lot of cows, and I don’t know how many are left. Yet the cull cow market has stayed up quite well given the numbers sold. We have a sense that folks are trying to hold on till the fall, buying up hay as they can get it.”
Moving into the fall months, if the drought doesn’t lift, Anderson adds the state will already begin to see the stage set for a tough 2012, because with no rains wheat pastures can’t be planted. And even if conditions improved dramatically, he says rebuilding will be slow and expensive.
“Where the heifers and cows will come from for rebuilding is a big issue. We’ve moved so many to slaughter that it’s going to be very expensive to build back up. We’ve seen declining numbers for several years already due to input costs, but now we’re looking at a situation that will be hard to turn around.”
But Anderson thinks this period in history may also represent a generational turning point for the state’s cattle business.
“I hear a lot of talk about guys going out, particularly some of the older ranchers. This was a good time for them to retire, with the strong cull cow prices. But that pasture will still be there, and they may lease it. That could be an opportunity for the next generation to get in, or for the smaller guys to increase the size of their herd. So I see this as an opportunity in a way. But first we are going to have to work through the feelings people have about this drought we’re living through.
‘I often think a drought is one of the worst things you can deal with. It’s with you every day and you never know when it will be over. With a flood as bad as it is, you know it will crest, and then you clean up and move on. But this is something we can’t put behind us, because you never know when it’s over. People are going to be very cautious when it comes to rebuilding. One rain won’t convince them it’s over”
http://www.dtnprogressivefarmer.com
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