Cattle-feeding technology increasing beef supplies

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Beef production, however, has not fully reflected changes in cattle numbers. While declining slightly in 2011 and 2012, year over year, beef production received a boost from the increased rates of cow slaughter, more imported cattle, and bigger animals. Generally, dressed weights have increased about 4 pounds per year since the 1970s. In 2012, average dressed weights for federally inspected steers and heifers were 18 and 19 pounds heavier than in 2011, exceeding the average annual trend of an increase in weights. These heavier steer and heifer weights were partially a product of good feeding conditions during the year and the increased use of beta agonists like ractopamine in cattle feeding. Ractopamine is fed toward the end of the feeding period to increase lean muscle mass and reduce feeding costs. Texas Cargill meat packing plant in January of this However, the reduction in feeding costs lasts only for a short period, after which feeding costs continue to accrue with little or no additional weight gain. This narrows the window for marketing fed cattle.

In the long run, closing of the Cargill meat packing plant in January of this year will likely be a positive thing for the meat packing industry. However, while the closing immediately raised packer capacity utilization rates, it also had an immediate— although apparently short-lived—negative impact on fed cattle prices. Cattle feeding margins have been negative since March 2011. With current feed and feeder cattle price forecasts, margins are expected to remain negative until fourth-quarter 2013, when fed cattle prices are expected to move above current forecasts of breakeven costs of $136/cwt and expected prices for new-crop corn result in lower feeding costs. With limited supplies of feeder cattle and possible over-capacity in the cattle feeding sector, competition for feeder cattle could result in some feedyard closures.

While fed cattle prices seem to have recovered for the most part from the abrupt decline that followed the announcement of the Cargill plant closure, the current price picture for the beef complex is not bright. Steer and heifer slaughter appears to be flagging in the face of continuing negative margins for meat packers, and wholesale cutout values have not recovered from their recent declines. This deteriorating situation has likely been exacerbated by the continued economic weakness. Retail beef demand will likely face continued price pressure as a result.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


Caterpillar Small Wheel Loaders

Cat® Small Wheel Loaders provide superior performance and versatility to help agriculture producers improve productivity and efficiency. An extensive range ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight