Conversion rates in Kansas feedlots held about steady over the past two months of data, snubbing a strong seasonal tendency to decline rapidly, as cattle feeders place heavier calves on feed, an extension feedlot specialist said.
Chris Reinhardt, Kansas State University economist, said the availability of grass and an economic incentive to keep calves on grass longer than normal combined to create the conversion rate anomaly.
The conversion rate is the total pounds of feed, on a dry-matter basis, that it takes to produce one pound of gain in feedlot cattle. Last year, this number peaked in March and took a more serious downturn in April and May on its way to a bottom of 5.77 pounds in June.
Over the previous five years, the average conversion rate peaks in February and bottoms in July. A graph of KSU data compiled by the Livestock Marketing Information Center illustrates the counter-seasonal move the conversion rate has taken. K-State economists gather data from about 10 volunteer feedlots in the state to keep tabs on what is happening in the state’s cattle feeding industry.
WEIGHTS ARE KEY
USDA cattle-on-feed data show that average placement weights this year are up from a year ago, yet the average number of days cattle going to slaughter in June spent in the feedlot is up. The survey of representative Kansas feedlots showed June placement weights averaged 792 pounds, up 17 pounds, or 2.19%, more than the 775 pounds in the year-ago month.
The K-State data also showed the average days on feed in June was 171, up seven, or 4.27%, from 164 just a year ago.
Reinhardt said the larger cattle get and the closer they get to their genetic growth potential, the more inefficient they get in converting feed to pounds. A tendency toward lighter fall and winter placements in previous years brought the average conversion rate down into mid-summer from its mid-winter high.
This year, stagnant fed cattle prices at unprofitable levels along with high costs for replacement feeder cattle also have encouraged feedlots to keep cattle on feed a little longer to pack on a few extra pounds before sale to the packer for slaughter.
The K-State data showed cattle going to slaughter in June from the surveyed feedlots averaged 1,392 pounds, up 11 pounds, or 0.80%, greater than last year’s 1,381 pounds.
CASH CATTLE MARKET QUIET
Cash cattle markets, after trading $2 per cwt higher last week, remained quiet Thursday. Live-basis bids were heard at $145 to $147 per cwt with asking prices $151 to $152. Dressed-basis bids were posted at $232 to $233, with asking prices holding at $240.
Cattle last week sold at mostly $147 to $148 with some up to $149 live and $232 to $234 dressed.
The USDA’s beef cutout values Thursday were lower, with the choice cutout at $235.19 per cwt, down $0.02 and select at $228.39, off $0.46. Volume was moderate with 95 loads of fabricated cuts being sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Wednesday was $217.07, down $0.63, compared with Thursday’s Aug settlement of $214.97, up $0.85.