Kansas feedlot managers are holding cattle on feed longer, raising weights, even as the percent grading choice declines seasonally.
A spot survey of select feedlots around the state and extrapolated to estimate the goings-on at all of the state’s feedlots shows that cattle sold to packers in September averaged 169 days on feed. The survey is conducted by the Kansas State University Extension service, and the data is compiled by the Livestock Marketing Information Center.
That was the same as in August but was 13 days, or 8.33%, longer than the 156 days in September of 2016. It also was up 17.8 days, or 11.8%, above the 2011-2015 average of 151.2 days.
The number of days on feed for Kansas feedlot cattle has been above the five-year average all year, but the two lines diverged sharply in July as this year’s days on feed went up, counter to the seasonal and last year.
CHOICE BEEF PERCENT DECLINES
There could be many reasons for the increase in the number of days on feed, chief among them being lower corn prices when compared with the 2011-2015 average. However, the national percent of beef grading choice was declining seasonally in September while packers continued to pay premiums for choice and prime carcasses.
Feeding cattle longer to gain extra grading percent is a limited-odds game, since cattle cannot add any more marbling than their genetics allow. A little extra feed can, however, make sure the cattle reach their full genetic potential for the marbling that makes carcasses grade choice or prime.
But even low corn prices wouldn’t count for a lot if there weren’t demand for the beef since Kansas feedlot closeout weights were marching higher in September, following and extending the seasonal pattern.
The K-State closeout data says the final weight of steers in September was 1,401 pounds, up 22, or 1.60%, from 1,379 in August. The September closeout weight was down from last year’s 1,428 pounds by 27 pounds, or 1.89%, but was up from the 2011-2015 average of 1,399.2 pounds by only 1.8 pounds, or 0.13%.
While beef packers were paying more for choice beef than for select in September, encouraging the extra time on feed, the national difference between choice and select beef remained below that of a year ago and the 2011-2015 average, USDA data showed.
At first blush, that might seem to argue against anecdotal evidence that packers were seeking choice or prime beef. However, this must be taken within the context of stronger federally inspected cattle slaughter. If demand for the better-eating choice or prime beef had remained the same in September, the extra slaughter would have pressured the choice/select spread even more.
CATTLE, BEEF RECAP
One pen of Texas fed cattle sold on the Livestock Exchange video auction at $120 per cwt Wednesday.
Trade was reported in eastern Nebraska’s dressed markets at $192 per cwt. Live-basis bids went from $120 to $125 per cwt, and trade came at $120 to mostly $124 to $125, generally up $8 to $9.
The USDA’s choice cutout Monday was up $1.83 per cwt at $210.57, while select was up $1.69 at $194.77. The choice/select spread widened to $15.80 from $15.66 with 79 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday was $159.46 per cwt, up $0.23. This compares with Monday’s Nov settlement of $160.15, down $0.72.