Dry conditions over much of the Great Plains and, increasingly, the Southeastern cattle-producing areas, currently dominate cattle and beef sector dynamics. Pasture and range conditions for the United States as a whole have deteriorated over the last several weeks, and at 51 percent in poor-to-very-poor condition for the week ending August 12, are much worse than conditions at the same time in 2005 when only 34 percent of pasture and range was in poor-to-very-poor condition. The few bright spots are the eastern Corn Belt, the West Coast, and some other scattered areas. With the exception of the Plains and Western Corn Belt, prospects for this year’s feed grain crops are not as bad as the pasture and range conditions would suggest. For corn, 82 percent of the 2006 crop is rated in fair or better condition, as is 84 percent of the soybean crop.
Only 58 percent of the sorghum crop, more common in the dryer fringes of corn growing areas and further west, is rated fair or better. Ethanol production and its continuing growth will affect corn prices and supplies of corn for feed, and will also affect feed prices, feeding profits, and feeder cattle prices. Still, a 56-pound bushel of corn produces only 17.4 pounds of dried distillers’ grains and solids. However, feeding distillers’ grains is not fully understood, and while cattle make good use of distillers’ grains, hogs benefit less from their use, and poultry make the least use of them. Some attribute part of the lower-than-typical percentages of Choice-or-better slaughter steers and heifers to the impact of the low energy-high protein nutrient profile of distillers’ grains on marbling. Some of these feed substitution impacts could spill over into sorghum and soybeans markets.
Source: ERS/ USDA - Mildred M. Haley, coordinator