With Fall’s arrival, the focus of cattle producers is shifting to winter feed supplies and to alternatives to hay, said the Beef Cattle Research Council of Canada Wednesday.
The BCRC is Canada’s national industry-led funding agency for beef, cattle and forage research.
Feed prices have dropped significantly from their June highs, but unfavorable weather conditions are leaving the question of available supplies open, the BCRC said. Hay prices vary significantly based on local supplies.
However, there could be options for alternate winter feeds as some crops originally intended for grain are being harvested as feed, the report said. Harvest delays and the likelihood of frost damage are leading to quality downgrades.
Alberta feed barley prices have dropped 13% from the June peak at $205 per short ton to $179 a ton in September, and market analysts project the feed grain markets have not hit bottom yet, the BCRC said.
EASTERN CANADA SUPPLIES SHORT
In eastern Canada, last year’s fall and winter conditions caused significant winter kill to the winter wheat and hay crops, while spring planting was delayed by excessive moisture, the research group said. Local reports said fears of supply shortages have sent Ontario wheat straw prices to C$0.06 to C$0.10 a pound in some areas compared with the historical range of C$0.03 to C$0.04 a pound.
Cool, wet weather in August and September also caused harvest delays in the east, with the possibility of more cereal crops going to the feed market, the BCRC said.
OPPORTUNITIES TO REDUCE COSTS
Two price scenarios were considered by the BCRC: scenario one assumed hay and alternative feed prices that were steady with published prices, and scenario two assumed steady hay prices and declines in alternative feed prices based on Agriculture and Agri-Food Canada’s grain price projections for the 2019/20 crop year.
Cost comparisons showed that rations based on silage and greenfeed (non-ensiled roughage) generally cost less than the hay-based rations in western and eastern Canada, the BCRC said.
For example, at current price levels, the main ingredients (alfalfa hay and cereal straw) in one ration were estimated to cost C$1.74 per cow per day compared with another (Cereal Straw and greenfeed) at C$1.47 per cow per day – a 16% difference.
For a 150-day winter feeding period for 100 cows, that represents a $4,000 difference in total feeding costs, the report said.
If hay prices stay steady and alternative feeds prices go lower, the cost difference between the two rations would expand to about 20% or $5,250 for 100 cows with a 150-day feeding period.
CATTLE, BEEF RECAP
Limited cash cattle trading was reported in the Corn Belt and eastern Nebraska at $174 to $175 per cwt on a dressed basis, steady to up $1 from last week. Live-basis trading occurred last week at $108 to $112 per cwt on a live basis, steady to up $3 from the previous week.
The USDA choice cutout Wednesday was up $2.35 per cwt at $223.28, while select was up $0.86 at $198.94. The choice/select spread widened to $24.34 from $22.85 with 81 loads of fabricated product sold into the spot market.
No cattle were tendered for delivery at zero against the Oct live cattle futures contract Wednesday. Three heifer and 15 steer contracts were retendered for delivery at 1, along with 18 heifer and 11 steer retenders at 2. Eighteen heifer and 11 steer contracts were demanded at 2.
The CME Feeder Cattle index for the seven days ended Monday was $144.84 per cwt, down $0.09 from the previous day. This compares with Wednesday’s Oct contract settlement of $145.02, up $1.32.