As the price of wheat in Dodge City, Kan., continues to decline and the price of winter wheat in the Southern Plains drops, the two are nearing parity, many Southern Plains feedlot managers may be considering replacing corn for all or part of the energy portion of their cattle rations with wheat.
Because of wheat’s heavier per-bushel weight, lower moisture level and slightly higher relative feed value, wheat is often used in rations when the local price is less than 110% to 115% of the cost of corn.
Price comparison’s last week show the Dodge City, Kan., price of wheat, at $4.77 a bushel, to be 114.7% the price of corn at $4.16. This is just tickling the edge of profitability, but the trend is toward making it something managers will have to consider.
A graph from the Livestock Marketing Information Center in Denver, Col., shows the relatively stable price of corn in the Southern Plains this year. Prices are more closely following the seasonal pattern rather than last year, although at a much lower level. The weekly price of corn last week averaged $4.16 a bushel and has held in a range from $4.03 ½ to $4.27 since Jan. 1.
Dodge City, Kan., winter wheat prices, however, are falling amid greater export competition and seemingly ample world wheat supplies. This LMIC graph illustrates this very well.
As with corn, the wheat market is following the seasonal trend, although at a much lower level. If prices continue to follow the trend, they will begin to level soon.
TO SWITCH OR NOT TO SWITCH
However, feedlots will make the change slowly to avoid the digestive complications that can come from feeding wheat. Some managers refuse to feed wheat entirely unless they are forced to do so.
To feed wheat, it should be rolled and not ground, researchers say. This is to reduce the chances of it forming flour in the feed and thus cutting the chances of the cattle ingesting a heavy load of starch that metabolizes too quickly in their stomachs.
And, since it takes a period of weeks for cattle to adjust to wheat-based rations, managers will often secure all of the wheat they need for a particular batch of cattle, so they want to be as sure as they can that wheat/corn price relationships are likely to hold.
NO CASH CATTLE TRADING
No cash cattle trading was reported in the Plains Monday with no bids or offers.
Beef prices were mixed with the USDA’s choice cutout down $0.89 per cwt at $247.59 and select up $1.36 at $245.75 with 96 fabricated loads sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $210.25, up $2.59 on the day.