Hay And Feed Price Outlook, Ample Supply This Winter

By Mark Parker
Progressive Farmer Contributing Editor

Beef producers across most of the nation should find ample hay and feedstuff supplies this winter, along with moderating prices. “In the national hay complex, during 2014 and into 2015, we are seeing a trend toward normal prices and normal stocks,” said Jessica Sampson, an economist with the Livestock Marketing Information Center (LMIC). It provides economic analysis and market projections for the livestock industry.

After the recent widespread drought reduced supplies and generally increased prices, stocks are now up significantly. This is especially the case in the big cattle-producing states, according to the USDA’s most recent hay report, “Feed Outlook,” released in May. “Together with favorable pasture and range conditions, that would lead us to project continued softening of hay prices for the 2015-16 marketing year,” Sampson said.

According to USDA, by this past May, hay stocks had rebounded by 27.9% compared to year-ago levels. At 24.5 million tons, that’s 73.2% higher than 2013 levels and the highest May hay-stocks number reported since 2005. Twenty-two states posted hay-stock increases of 20% or more above the previous year.

These improved stocks meant annual prices for the May 2014 through April 2015 marketing year were the lowest since the 2010-11 season. They were still strong, however, coming in at the fourth-highest price levels on record.

Alfalfa nationwide, at $194.20 per ton, was 2% cheaper than in the 2013-14 marketing year. The price for all other hay, including grass and wheat, dropped by 6% to $132 per ton. Alfalfa ended the 2014-15 marketing year at $184 per ton while other hay was at $142 per ton.

Pre-2011, other hay prices were in the $90- to $100-per-ton range but had jumped up to $120 to $150 per ton after the 2011 drought.

PRICE FORECASTS
For the 2015-2016 marketing year, LMIC projects the national average price of alfalfa hay to be $10 to $20 per ton lower than the previous marketing year. Other hay prices could decrease somewhat more than alfalfa, Sampson said, and are expected to be $15 to $18 per ton lower. “That, of course, is barring any major weather-related issues during the hay-production season,” Sampson said. “We started off the season well across much of the country. The Southern Plains, the Southeast, the Midwest all experienced good moisture, so increased production and bigger yields are likely.” The notable exceptions are California and other parts of the West, where drought continues to plague livestock and crops.

ACREAGE OUTLOOK
Given the moderating prices, Sampson does not expect to see a big shift in the number of acres utilized for hay this year. “Lower prices don’t incentivize a shift to putting more land into hay production, so we do not expect a major increase in production from more acres,” she said. “Right now, hay-producing acres are fairly consistent with what we saw in 2014.”

Sampson noted one possible area of concern this season is the supply of high-quality hay like alfalfa, especially from first cuttings. Hay growers in many parts of the country suffered from “too much of a good thing,” as more-than-abundant rains forced them to choose between putting up hay that was too wet or waiting until it was too mature. Many growers in Ohio and other parts of the Corn Belt expected to lose one cutting of alfalfa production.

OTHER FACTORS
In a supply and demand market, Sampson also has to consider the fact there are now more cattle to consume the nation’s hay. “As of January 1, we were seeing an increase in the cattle inventory as producers began herd rebuilding,” she pointed out. “There was a 2% increase in the beef-cow inventory with significantly reduced beef-cow and heifer slaughter. I think that increase in cattle numbers will be offset by good pasture and range conditions, and an expected increase in hay production, so we don’t expect a significant impact on hay prices.”

Likewise, hay exports should not have a major effect. Sampson explains exports use only about 3% of domestic production (3% of that being alfalfa and 2% of other hay) and go primarily to Japan, South Korea, Taiwan and the United Arab Emirates. The LMIC economist emphasizes there may well be some significant regional differences in this year’s hay outlook. “It’s not just regional availability and demand that can affect supply and prices,” she said. “It’s also dependent on who is pulling from that supply. If a lot of Colorado hay were to be shipped to California, for instance, that could create a higher price scenario for that particular area.”

She noted LMIC’s projected numbers are intended to reflect a general trend across the country. On a state-to-state basis, prices often vary widely. The mid-May price for alfalfa in Kansas, for example, was $117 per ton compared to $165 per ton in neighboring Missouri.

COMMODITY FEEDS
Like most crop-based commodity feeds, one of the most significant, dried distillers grains with solubles (DDGS), tends to follow corn prices. According to USDA, the projected corn price range for the 2015-16 season is $3.20 to $3.80 per bushel, compared to the 2014-15 range of $3.55 to $3.75. Additionally, ethanol production, which generates DDGS, is running strong so beef producers who utilize DDGS shouldn’t expect major price changes. “It looks like the supply of distillers grain should remain strong,” Kansas State University agricultural economist Dan O’Brien said. “The caveat would be a significant problem with this year’s corn crop. There’s also a significant export market for DDGS, so what happens in China and in the financial markets can also come into play.”

For distillers grains or any other feedstuff, he stressed beef producers need to closely monitor local sources and keep an eye on national and international events that could have an effect on the market. Soybean meal prices, according to the USDA World Agricultural Supply and Demand Estimates Report, are projected to be $305 to $345 per short ton. Soybean oil prices are expected to average 30.5 cents to 33.5 cents per pound for the 2015-16 season.

The prices of most commodity feeds have been running lower this year than last, according to USDA. At midsummer, prices for cottonseed meal, feather meal, corn gluten feed, wheat middlings and rice bran were all significantly below year-ago levels.

Whether commodity feed prices remain relatively low will be largely dependent on fall harvest, economists said. At this point, however, beef producers are looking forward to a marked improvement in both supply and price of the feeds on which they rely.

Study Finds Chemicals Prevalent In Streams, Rivers Across U.S.

By Todd Neeley
DTN Staff Reporter

Omaha (DTN) – At least one neonicotinoid was found in 63% of 48 stream sample sites in a U.S. Geological Survey study of streams and rivers across the country released. However, all the chemicals detected are considered likely not to be carcinogenic to humans.

The USGS took samples in a variety of regions from Iowa to the Chesapeake Bay, showing for the first time the presence of neonicotinoids in waterways goes far beyond agriculture-heavy regions of the Midwest. However, the study published in Environmental Chemical said none of the water samples exceeded U.S. Environmental Protection Agency aquatic life criteria.

In April the EPA announced a moratorium on any applications for new outdoor uses of neonicotinoid products, based on concerns about their potential effects on bee health. The moratorium affects all pending applications for label changes, crop expansions, or experimental permits for products containing imidacloprid, dinotefuran, clothianidin or thiamethoxam – chemicals all currently under registration review by the EPA.

The new USGS study included stream samples from 24 states and Puerto Rico between November 2012 and June 2014, collected as part of a larger project assessing human and ecological health risks from chemicals.

Thirty-four samples taken in the study were taken in regions where both agricultural and urban sources of neonicotinoids are prevalent. In 2014 scientists took stream samples in Iowa during times of elevated water levels following heavy rainfall.

“Although stream concentrations were similar between 2013 and 2014, the wet conditions in 2014 did cause substantially higher stream flows compared with 2013, which translated to higher instantaneous neonicotinoid loads,” the study said. “Thus, neonicotinoid loads were two to four times higher in 2014 than in 2013. These results confirm that precipitation is an important driver of neonicotinoid transport to streams following periods of use. Even when such precipitation is heavy enough to cause substantial stream flooding, the neonicotinoid concentrations were not reduced.”

In addition, water samples were taken from three sites in the Chesapeake Bay watershed. “Similar to previous research on agricultural streams in the Midwestern USA, an increase in neonicotinoid concentrations was observed in these streams during runoff conditions associated with the planting season of cultivated crops,” USGS said.

Imidacloprid was the most frequently detected neonicotinoid, found in 37% of samples taken. That was followed by clothianidin at 24% and thiamethoxam 21%.

Larissa Walker, pollinator campaign director at the Center for Food Safety, said in a news release the study reveals the prevalence of neonicotinoids across the country. “It is clear that the problems with widespread uses of neonicotinoids extend well beyond the impacts to pollinators,” she said.

“This study shines a light on the alarming prevalence of contamination throughout aquatic ecosystems, with ramifications that will be felt throughout entire food chains. If meaningful action is not taken soon, we may be headed toward a second ‘silent spring’... With such extensive contamination of waterways, EPA needs to take a much closer look at the cumulative and long-term impacts of these widely used chemicals.”

Neonicotinoid products are applied on more than 150 million acres of cropland annually, according to CFFS. The recent USGS study produced findings similar to that of a July 2014 USGS study that found neonicotinoid contamination levels in regional waterways in the Midwest. “The correlation between neonicotinoid contamination and wildlife declines supports the decision last year by the U.S. Fish and Wildlife Service to phase out uses of neonicotinoids on some national wildlife refuges,” the Center for Food Safety said.

The EPA has established a review schedule for neonicotinoids, http://tinyurl.com/p8k5qm7, with reviews scheduled for completion by 2016-2017 on four chemicals including imidacloprid, clothianidin, thiamethoxam and dinotefuran.

Cattlemen’s Boot Camp In Oklahoma This October

Cattle producers are invited to gather for a Cattlemen’s Boot Camp Oct. 15-16 at Oklahoma State University (OSU) in Stillwater, Okla. The event is hosted by the American Angus Association® in partnership with OSU, and provides purebred and commercial producers timely information presented by academic and industry professionals.

Registration is now available online and open until Sept. 30. “There’s something for everyone at our Cattlemen’s Boot Camp events,” says Jaclyn Clark, Association director of events and education. “We hope cattle producers in the southwest consider attending as a way to stay up-to-date on the latest technology and tools available to them in the beef business.”

Open to all cattle producers, the event is funded by the Angus Foundation and features a day and a half of educational speakers and hands-on activities to help improve their herd operations. The workshop is packed with pertinent information including bull selection, reproductive technologies, genetic markets, forage management and much more.

Registration is $75 per person, and includes meals and educational materials. Registration forms are due Sept. 30 and can be submitted electronically or mailed to Clark at the American Angus Association, 3201 Frederick Ave., Saint Joseph, MO, 64506. Late and walk-in registrations are not accepted.

Direct Receipts

Direct Receipts: 24,500

Texas 12,700. 87 pct over 600 lbs. 30 pct heifers. Steers: Medium and Large 1 FOB Current 690 lbs 222.50; 700-730 lbs 218.04; 750-775 lbs 213.36; 800-840 lbs 207.22; 850-875 lbs 201.17; Oct 775 lbs 202.50; Nov 700 lbs 210.30; Dec 700 lbs 205.60; Del Current 750 lbs 216.00; 800 lbs 210.00; Oct 750 lbs 210.50; Nov 750 lbs 205.75; 800 lbs 203.65. Medium and Large 1-2 FOB Current 750-790 lbs 207.60; 815-825 lbs 203.28; 875-860 lbs 203.28; Aug-Sept 750 lbs 197.00; Del Current 500 lbs 236.00; 550 lbs 213.00; 600 lbs 210.70; 850-890 lbs 205.33; Sept 675 lbs 218.00; Nov 775 lbs 202.35. Heifers: Medium and Large 1 FOB Current 685 lbs 203.00; 700 lbs 209.00; 750 lbs 205.88; Oct 725 lbs 195.91; Dec 700 lbs 192.50; Del Current 700 lbs 203.79; 750 lbs 198.50; Oct 700-725 lbs 200.50; Nov 700-725 lbs 195.34; Jan 700-725 lbs 189.34. Medium and Large 1-2 FOB Current 550 lbs 234.10; Aug-Sept 700 lbs 183.00; Del Current 600 lbs 196.50; Oct 725 lbs 196.50; Nov 700 lbs 196.30.

Oklahoma 3100. 100 pct over 600 lbs. 8 pct heifers. Steers: Medium and Large 1 Current 725 lbs 224.00; 750 lbs 213.00; 800-835 lbs 209.04; 850-900 lbs 202.36. Medium and Large 1-2 Current 825 lbs 204.50; 925 lbs 199.00; Nov 750 lbs 203.50. Heifers: Medium and Large 1 Current 650 lbs 212.36; Jan 700 lbs 188.00.

New Mexico 600. 76 pct over 600 lbs. 11 pct heifers. Steers: Medium and Large 1 Current 800 lbs 208.50. Medium and Large 1-2 Current 600 lbs 210.15; Sept 675 lbs 215.00; Oct 725 lbs 208.10. Heifers: Medium and Large 1 Current 750 lbs 197.00.

Kansas 4100. 100 pct over 600 lbs. 42 pct heifers. Steers: Medium and Large 1 FOB Current 750 lbs 221.80; 800-840 lbs 213.74; 850 lbs 212.00; Nov 800 lbs 201.65. Medium and Large 1-2 Del Current 750 lbs 198.00. Heifers: Medium and Large 1 FOB Current 700 lbs 201.86; 750 lbs 205.00; Sept 700 lbs 200.85; Oct 700 lbs 199.75; Nov 700 lbs 197.75.

National Feeder Cattle Summary

St. Joseph, MO — August 21
National feeder cattle receipts: 136,300

Calves and yearlings traded weak to $5 lower with a number of instances $10 lower from midweek on. Direct sales traded steady to $2 lower early in the week, then turning $3-7 lower late week. Cattle futures seem to keep the focus on the bearish side, not wanting to show much life. Cattle futures on Wednesday reared their ugly head closing with sharp triple-digit losses, making new lows for the month. Market psychology keeps focus on negative fundamentals, with plentiful supplies and lower prices for competing meats, struggling outside markets, lower meat exports and the focus of trading the market on what is happening right now. The Stock Market is on course for its lowest finish of the year, as the Dow closed over 350 points lower on Thursday dropping below 17,000 points. Stocks fell sharply on global growth worries that rattled the markets from China to Germany and the U.S. It was the Dow’s worst performance in 18 months. Losses then continued on Friday as the global market rout deepened with the Dow losing over 500 points on Friday as of this writing. Oil futures are also hovering near 6-year lows at near $40 a barrel. This attitude and volatility dominates the market at this time. Global worries also swamped the cattle complex on Friday as Feeder Cattle futures dropped limit down. Lack of fed cattle support made its impact and weighed heavy on the feeder cattle market this week as fed cattle trade on Wednesday was $4-6 lower on dressed sales in Nebraska ranging from $232-234. Any leverage that tight fed cattle numbers may hold doesn’t seem to matter as demand remains light to moderate at best. In the next 30-45 days auctions should see a good number of feeder cattle moving off pasture into feed yards. Unless the fed cattle market gets a move up the feeder cattle market won’t be able to maintain the premiums that has been paid for yearlings and calves the previous months. Despite lower prices this week it was still pretty optimistic in Valentine, NE on Thursday selling near 485 head of yearling steers weighing 900-950 lbs averaged 917 lbs sold with a weighted average price of $212.52. Near 775 head of their bigger brothers averaged 964 lbs sold with a weighted average price of $205.76. Time is running out to take advantage of summer grilling demand and with the fed cattle market remaining stagnant, cutout values have made some steady gains over the last couple of weeks heading into Labor Day Weekend. But boxed-beef values closed on lower on Friday, following commodity markets lower as Choice cut-out closed down $1.56 at $244.90. This week the Pro Farmer Crop Tour is being conducted through the Eastern and Western Corn Belt and through the Midwest. So far corn yields in Indiana 142.9 bpa, Ohio 148.4 bpa, Nebraska 165.2 bpa and Iowa 180.2 bpa are below USDA estimates with South Dakota 165.9 bpa and Minnesota 190.8 bpa above USDA estimates and Illinois pretty much unchanged at 171.6 bpa. The big question remains whether or not good yields in the Western Corn Belt will compensate for lower yields in the Eastern Corn Belt; so far corn yields on the Pro Farmer Tour will not increase from USDA’s estimates. The August 1st Cattle on Feed Report appears to be neutral as Cattle on Feed was very close to expectations at 102.6 percent; Placements came in at 99 percent and Marketings at 97 percent both lighter than expected and were lowest for the month of July since the series began in 1996.

Texas 3600. 76 pct over 600 lbs. 30 pct heifers. Steers: Medium and Large 1 600-650 lbs (615) 226.72; 700-750 lbs (717) 215.58; 750-800 lbs (769) 213.41; pkg 940 lbs 183.00. Medium and Large 1-2 650-700 lbs (675) 207.50; 700-750 lbs (723) 201.39; 750-800 lbs (766) 203.61; 800-850 lbs (811) 200.52. Heifers: Medium and Large 1 500-550 lbs (523) 212.59; half load 690 lb calves 185.00; half load 900 lbs 162.00. Medium and Large 1-2 650-700 lbs (674) 203.90; 700750 lbs (737) 192.82.

Oklahoma 23,400. 75 pct over 600 lbs. 32 pct heifers. Steers: Medium and Large 1 300-350 lbs (320) 355.61; 350-400 lbs (375) 317.54; 400-450 lbs (426) 295.55; 450-500 lbs (479) 272.79; 500-550 lbs (524) 249.62; 550-600 lbs (572) 236.76; 600-650 lbs (613) 239.55; 650-700 lbs (679) 229.94; 700-750 lbs (728) 220.50; 750-800 lbs (777) 214.94; 800-850 lbs (827) 205.89; 850-900 lbs (872) 202.27; 900-950 lbs (917) 198.34; 950-1000 lbs (958) 194.61; 1000-1050 lbs (1017) 188.08; 1050-1100 lbs (1076) 182.68. Medium and Large 1-2 300-350 lbs (330) 334.41; 400-450 lbs (432) 276.80; 450-500 lbs (478) 261.26; 500-550 lbs (519) 239.78; 550-600 lbs (570) 228.62; 600-650 lbs (623) 227.98; 650-700 lbs (686) 224.88; 700-750 lbs (728) 214.92; 750-800 lbs (768) 211.38; 800-850 lbs (834) 202.25; 850-900 lbs (872) 198.19; 900-950 lbs (917) 195.48; 950-1000 lbs (975) 189.05; few loads 1010 lbs 188.50. Heifers: Medium and Large 1 350-400 lbs (366) 260.09; 400-450 lbs (417) 259.54; 450-500 lbs (472) 239.15; 500-550 lbs (525) 233.18; 550-600 lbs (571) 223.60; 600-650 lbs (633) 216.04; 650-700 lbs (678) 209.63; 700-750 lbs (723) 204.32; 750-800 lbs (766) 200.43; 800-850 lbs (814) 194.42; 850-900 lbs (877) 189.42; 900-950 lbs (917) 182.27; load 955 lbs 176.50. Medium and Large 1-2 300-350 lbs (328) 272.23; 350-400 lbs (374) 252.11; 400-450 lbs (424) 242.27; 450-500 lbs (468) 230.63; 500-550 lbs (532) 224.92; 550-600 lbs (579) 212.37; 600-650 lbs (621) 215.41; 650-700 lbs (674) 206.39; 700-750 lbs (738) 200.01; 750-800 lbs (760) 202.08; half load 820 lbs 193.00; 850-900 lbs (876) 184.16.

New Mexico 2600. 46 pct over 600 lbs. 34 pct heifers. Steers: Medium and Large 1 450-500 lbs (483) 244.75; 500-550 lbs (544) 239.95; 650-700 lbs (682) 203.95; 750-800 lbs (775) 207.50; pkg 805 lbs 204.50. Heifers: Medium and Large 1-2 450-500 lbs (483) 227.61; 550-600 lbs (575) 204.56.

Kabsas 6700. 93 pct over 600 lbs. 42 pct heifers. Steers: Medium and Large 1 400-450 lbs (417) 305.02; 500-550 lbs (519) 260.89; 550-600 lbs (569) 252.37; 600-650 lbs (613) 243.16; 650-700 lbs (675) 233.54; 700-750 lbs (730) 223.18; 750-800 lbs (789) 214.30; 800-850 lbs (818) 212.77; 850-900 lbs (875) 207.88; 900-950 lbs (907) 201.77; load 1010 lbs 195.75. Medium and Large 1-2 450-500 lbs (483) 274.62; 650-700 lbs (681) 222.54; 700-750 lbs (721) 219.24; 750-800 lbs (783) 210.43; 800-850 lbs (827) 207.01; 850-900 lbs (881) 202.46; 900-950 lbs (917) 195.53; 950-1000 lbs (970) 193.40. Heifers: Medium and Large 1 450-500 lbs (477) 257.64; 500-550 lbs (521) 242.26; 600-650 lbs (633) 218.68; 700-750 lbs (733) 209.42; 750-800 lbs (786) 203.15; 800-850 lbs (818) 198.64; 850-900 lbs (866) 195.86; 900-950 lbs (925) 186.73; 950-1000 lbs (972) 185.29. Medium and Large 1-2 400-450 lbs (413) 270.22; 550-600 lbs (578) 225.39; 600-650 lbs (637) 218.18; 650-700 lbs (671) 211.16; 700-750 lbs (725) 205.28; 750-800 lbs (780) 199.16; 800-850 lbs (822) 186.21; 850-900 lbs (865) 188.23.

Missouri 16,700. 59 pct over 600 lbs. 35 pct heifers. Steers: Medium and Large 1 300-350 lbs (324) 319.94; 350-400 lbs (386) 295.33; 400-450 lbs (418) 289.73; 450-500 lbs (474) 270.54; 500-550 lbs (526) 265.69; 550-600 lbs (583) 252.01; 600-650 lbs (616) 245.47; 650-700 lbs (679) 228.93; 700-750 lbs (725) 227.48; 750-800 lbs (770) 217.50; 800-850 lbs (815) 215.21; 850-900 lbs (865) 212.10; 900-950 lbs (921) 203.13; 950-1000 lbs (964) 188.31; few loads 1010 lbs 189.00. Medium and Large 1-2 350-400 lbs (383) 277.57; 400-450 lbs (429) 269.05; 450-500 lbs (472) 260.72; 500-550 lbs (524) 249.20; 550-600 lbs (578) 237.87; 600-650 lbs (617) 230.31; 650-700 lbs (668) 223.88; 700-750 lbs (723) 215.82; 750-800 lbs (783) 211.07; 800-850 lbs (812) 199.07; 850-900 lbs (878) 189.80; 900-950 lbs (923) 198.07. Heifers: Medium and Large 1 300-350 lbs (324) 278.88; 350-400 lbs (381) 268.12; 400-450 lbs (429) 253.81; 450-500 lbs (475) 244.49; 500-550 lbs (522) 231.51; 550-600 lbs (576) 227.06; 600-650 lbs (624) 222.01; 650-700 lbs (664) 218.36; 700-750 lbs (728) 205.43; 750-800 lbs (769) 199.44; 800-850 lbs (811) 199.32; 850-900 lbs (885) 185.20; load 905 lbs 185.00. Medium and Large 1-2 350-400 lbs (382) 240.88; 400-450 lbs (430) 238.65; 450-500 lbs (472) 228.33; 500-550 lbs (528) 221.06; 550-600 lbs (575) 215.25; 600-650 lbs (621) 213.55; 650-700 lbs (682) 204.32; 700-750 lbs (726) 205.19; 750-800 lbs (772) 191.44; 800-850 lbs (812) 194.39.

Arkansas 8300. 28 pct over 600 lbs. 42 pct heifers. Steers: Medium and Large 1 300-350 lbs (324) 331.73; 350-400 lbs (371) 294.63; 400-450 lbs (421) 271.27; 450-500 lbs (470) 249.31; 500-550 lbs (522) 237.74; 550-600 lbs (572) 229.33; 600-650 lbs (619) 225.45; 650-700 lbs (670) 222.01. Heifers: Medium and Large 1 300-350 lbs (316) 275.35; 350-400 lbs (376) 258.59; 400-450 lbs (424) 243.35; 450-500 lbs (471) 231.06; 500-550 lbs (523) 218.77; 550-600 lbs (571) 209.71; 600-650 lbs (620) 206.81.

 

 

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Friday, August 28, 2015 2:50 PM