Cumulative nationwide feeder and stocker cattle receipts are barely lagging each 2021 and the 5-year common (2017-2021) at 12,098,700 head by way of Oct 21. In 2022, extra of the receipts are coming from cattle weighing lower than 600 lbs. and heifers – each alerts that the drought in varied elements of the US is affecting feeder and stocker cattle being offered.
Cow-calf producers who nonetheless have calves are within the strategy of deciding whether or not to promote or retain weaned calves. This resolution should contemplate each the price to placed on the extra weight (whole quantity, high quality, price of feed sources, and so forth.) and the anticipated worth obtained when cattle are offered at larger weights (at present and future basis-adjusted costs). The distinction between these two is revenue however solely on the extra weight gained. Optimistic values point out that income may very well be made by retaining feeder cattle this fall.
Survey work from the College of Nebraska – Lincoln reveals that producers can use a mixture of worth danger administration and totally different lengths of their manufacturing system as a hedge towards antagonistic worth actions. Placing on weight in the course of the winter and promoting in March-April or promoting within the late summer season are the 2 widespread backgrounding manufacturing techniques in Nebraska. Inside these two techniques, whole weight achieve will be influenced by the kind of feed given. Desk 1 reveals group-level trial information for these two forms of techniques in Nebraska. Achieve can both be quick or gradual in both the winter stocking 2022-23 and summer season grazing 2023 seasons. These choices influence the entire weight gained at every section and thus the time and weight feeder cattle enter feedlots.
The worth-of-gain for the 2 wintering situations (gradual vs. quick) is calculated utilizing 66 head of 525 lb. weaned steers purchased on Nov 2, 2022, and offered in Lexington, NE on March 9, 2023, utilizing Beef Foundation. The worth of achieve for the gradual winter efficiency utilizing an ADG of 0.80 lb/d is $198.96/cwt. The worth of achieve for the quick winter efficiency utilizing an ADG of two.05 lb/d is $137.45/cwt. Inside every of those manufacturing techniques, there’s little benefit of dashing up or slowing down the cattle for the reason that value-of-gain doesn’t differ considerably between the 2 weeks earlier than or after the proposed promote date (see Desk 2).
These calculations are particular to cattle offered in Lexington, NE, and producers making choices about whether or not to retain cattle ought to re-calculate the worth of achieve for his or her location utilizing instruments corresponding to these out there at Beef Foundation. Equally, these values are for present costs and historic foundation. Below no worth danger administration, the precise worth obtained will differ. If worth danger administration instruments are used corresponding to CME futures or choices or RMA Livestock Threat Safety, producers a few of this danger by “locking in” an output worth however are nonetheless topic to foundation danger.
Producers who retain cattle over the winter ought to re-calculate the worth of achieve for cattle within the Spring as they arrive off cornstalks or winter grazing to find out if the market remains to be prepared to pay them to placed on but extra weight.
