US cow/calf producers are likely to continue expanding their herds, even though returns are beginning to decline because grass availability and condition continue to improve.
US pastures and ranges are in better condition this year than they were last year and are in far better condition than the 2010-2014 average, according to the USDA’s weekly crop condition report from its National Agricultural Statistics Service Monday. And if pastures are improving, cattle producers will not be able to leave it alone.
Grass serves as food for almost no other popularly consumed animal in this country except cattle, and since farmers pay taxes and provide upkeep on these lands they will take every opportunity to make the land pay for itself. They will do this until economic or natural conditions force them to cut back.
Even then, they will hold out, hoping for better times, because of the large investment they have in the cattle themselves. They will be loath to accept the loss by selling cows until the last minute.
Besides, and this isn’t something as tangible as pasture grass or money, cattle represent who cattlemen are. Without cattle, they cease to be cattlemen and lose their identity.
NASS NUMBERS
Monday, they USDA’s NASS reported that for the contiguous 48 states, pasture and range condition was rated 2% very poor, 7% poor, 30% fair, 51% good and 10% excellent. This is up from last week when conditions were rated 3% very poor, 7% poor, 32% fair, 49% good and 9% excellent. In the same week a year earlier, pastures and ranges were rated 3% very poor, 9% poor, 32% fair, 47% good and 10% excellent.
Regionally, pasture conditions were better in all parts of the country except the Northeast and Southeast. A case could be made that the Southern Plains also is lagging, but since conditions are on par with last year, and they are so much above the five-year average, it’s a moot point.
Hawaii is not reported by NASS, but drought conditions there mean pastures are not in good health.
CASH CATTLE MARKET QUIET
Cash cattle markets Monday were quiet with no bids or offers reported. Estimated feedlot showlist changes were mixed to lower. Declines in Texas and Nebraska were thought to outpace gains in Kansas and Colorado.
Cash cattle markets last week were $2 to $4 per cwt higher at $126 to $128 per cwt on a live basis and $3 higher in dressed markets at $198 to $200.
The USDA’s choice cutout Monday was higher at $207.57 per cwt, up $3.83, while select was up $0.62 at $194.94. The choice/select spread widened to $12.63 from $9.42 with 115 loads of fabricated product sold into the spot market.
The USDA said wholesale beef demand was moderate to fairly good, even though offerings were moderate to heavy. Select and choice ribs and rounds were steady to firm while chucks were firm to higher. Choice loins also were higher, but select cuts were weak. Trimmings were moderately to sharply higher.
The CME Feeder Cattle Index for the seven days ended Friday was $143.63 per cwt, down $0.85. This compares with the May settlement Monday of $150.80, up $3.42.