Transcript Marketing Cull Cows - Tarleton State University

Marketing Cull Cows
Cattle Cycle & Cull Cows
•
Cattle Cycle
– Long as 15 years ~ short as 7
– 8-10 years of profitability
•
Counter – Cyclically
1) Cost of production
2) Ability to purchase and sell at lows and highs
3) Different attitude toward risk
JANUARY 1 COW INVENTORY
U.S., Annual
Mil. Head
50
45
2004 = 32.9 Million Head
40
Beef
-0.4 Percent
35
30
25
2004 = 9 Million Head
-1.7 Percent
20
15
10
5
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
Dairy
JANUARY 1 TOTAL COW INVENTORY
U.S., Annual
Mil. Head
60
58
56
54
52
50
48
46
44
42
40
1975
1978
1981
1984
1987
Livestock Marketing Information Center
Data Source: USDA/NASS
1990
1993
1996
1999
2002
2005
2008
C-N-02A
07/23/04
160
Weekly F.I. Cow Slaughter
150
140
2004
5 Yr Avg
Thousand Head
2003
130
120
110
100
90
80
70
01/10
02/28
04/17
06/05
07/24
Week Ending
Source: USDA & K-State Research & Extension
09/11
10/30
12/18
KSU Dept. of Ag Econ
www.agmanager.info
U S TOTAL COW INVENTORY
vs FI COW SLAUGHTER
Mil. Head
60
Mil. Head
11
Annual
56
10
52
9
48
8
44
7
40
6
36
5
32
4
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
C-S-27
3/8/2004
Total Cow
Inventory
FI Cow
Slaughter
Cattle Cycle & Cull Cows
Rules of Thumb
•
What do these numbers Mean?
– Cow slaughter less than 13% of Inventory
indicates herd buildup
– Greater than 15% indicates decline
– Heifer Slaughter less than 37% of Cow herd
considered growth
Importance of Understanding Cow
Slaughter
• 15-20% of a producers revenue comes
from the sale of cull cows and bulls
• Cow slaughter generates 70-75% of
domestic non fed beef
• A high percentage of ground beef comes
form cows
– Ground beef accounts for 44% of all beef consumed
Importance of Understanding Cow
Slaughter
• Approximately one half of all cows
slaughtered are dairy cows
• About 1/3 of of domestic non-fed beef
production comes from dairy cows.
Economic Importance
• Approximately 7million pounds of Non-Fed Beef.
–
–
–
–
50% slaughter cows
9% from bulls
13% from non fed steers and heifers
28% from imported
• Equates to 20% of total
beef production
Processors
• Rosen Diversified 5 plants
–
–
–
–
–
Yankton, SD Cimpl Meats
St. Paul MN
Long Prairie, MN
Omaha, NE
Gibbon, NE
400 /day
1,000 / day
950 /day
1,000 /day
• Swift 2 plants
– Omaha, NE and Idaho
• Iowa Producers
– Tama Ia. Plant 30% cows
500 / day
• Privately held Plants
– Lovett Pack, NE; Host of ones in WI
Marketing Cull Cows
•
Questions
– When are most cull cows sold
– When is the greatest demand for cull cow meat
Marketing Cull Cows
•
Questions
– When are most cull cows sold
– When is the greatest demand for cull cow meat
•
Most sold from October – December
–
•
Pregnancy checked off grass, old poor performance
Greatest demand for Ground Beef
Summer Months ~ can be frozen for storage
AVERAGE DRESSED WEIGHT -- COWS
Federally Inspected, Monthly
Pounds
620
610
Avg.
19972001
600
590
580
2002
570
560
2003
550
540
JAN
MAR
MAY
Livestock Marketing Information Center
Data Source: USDA/NASS
JUL
SEP
NOV
C-S-24F
10/24/03
Sioux Falls Cow Prices
Cows:
Percent Lean
October 22, 2003
Weight
Price
Lean Premium White
65-75
1404-1534 lbs
56.00-59.50
Breakers
75-80
1305-1710 lbs
50.50-55.50
Boners
High Dressing
80-85
1162-1479 lbs
45.00-50.00
52.00
Lean
High Dressing
Low Dressing
85-90
975-1490 lbs
44.00-48.50
50.00
42.50-43.00
USDA, Market News
Sioux Falls Cow Prices
Cows:
Percent Lean
October 20, 2004
Weight
Price
Lean Premium White
65-75
1404-1534 lbs
58.00-66.00
Breakers
75-80
1305-1710 lbs
54.00-56.00
Boners
High Dressing
80-85
1162-1479 lbs
52.00-54.00
58.00
Lean
High Dressing
Low Dressing
85-90
975-1490 lbs
49.00-52.00
56.00
45.00-46.00
USDA, Market News
Marketing Cull Cows
Questions to be asked
1)
2)
3)
4)
5)
What season of the market are you in?
The price difference between grades of cows?
Cost of feeding?
Select cows that will gain and obtain higher grades
Consider market place.
Percentage Price Increases Between
Cull Cow Grades
Cutter
Utility
Commercial
Canner
9%
14%
15%
Cutter
-
5%
6%
Utility
-
-
1%
Pritchard, SDSU
Percentage of Cows in Each Grade Following a
Feeding Program of Shelled Corn and Corn Silage
Grades
Days
Fed
0
Can
Cut
Utl
Com +
64%
28%
8%
-
50
18%
57%
24%
1%
77
8%
21%
65%
6%
105
-
19%
74%
7%
Can = Canner
Utl = Utility
Cut = Cutter
Com + = Commercial or higher
Pritchard, SDSU
Marketing Cull Cows
Iowa State Data
- Feed 60 – 90 days to obtain White Fat
- Average daily gain 3.8 lbs
- Feed costs were 52.23/cwt
- Conversions were 10 to 1
Cancer Eye
Bruising
Bruising
• Tim Loss (26.8 mil lbs)
• Loss of Primal
mil
$23.0 mil
$52.0
• Avg loss per head
• Producer controlled
$11.75 / hd
$ 4.00 / hd
Downer Cows
• Only 1%
But….
Causes problems
when animal right
activist get a hold of
pictures
Proper Condition
Proper Condition
Quality Losses Per Head
Carcass condemnation
Trim dirt/ Bruises
Loss of offal
Hide devalued
Injection Site Lesions
Yellow Fat
Poor Muscling
Excessive Fat
Light Carcasses
Other
Total
11.99
12.00
4.00
7.00
.75
2.30
14.50
17.75
4.00
1.20
76.00
Strategies to Improve Quality
1)
2)
3)
4)
5)
6)
7)
Monitor herd health
Monitor Condition Scores
Decreased hide damage ~ Insects
Reduce Bruising
Reduce Injection site lesions
Market clean cattle
Euthanasia disabled cattle
Market in a Timely Manner!!!
Marketing
• Live
– Auction markets
– Live basis
– Risks???
• Packer Direct
– Delivery
– Carcass basis
– Risks??
Marketing
• Live
– Auction markets
– Live basis
– Risks???
NO Risk
• Packer Direct
– Delivery
– Carcass basis
– Risks??
carcasses trim ect
Great Risk ~ condemned
Marketing
• Where to sell
– Local Auction Markets
– Ask how many cow buyers and who they
represent
• How to sell
– Do Auctions use sorting
– How many do the sell (large groups or Small)
Marketing
Maximizing Price
• Time of year
• Dressing percent
• Condition
– Quality, Fatness, Structural soundness and Age
Importance of Understanding Cow Slaughter
• 15-20% of a producers revenue comes from the
sale of cull cows and bulls
• Cow slaughter generates 70-75% of domestic
non fed beef
• A high percentage of ground beef comes form
cows
– Ground beef accounts for 44% of all beef consumed
• Approximately one half of all cows slaughtered
are dairy cows
• About 1/3 of domestic non-fed beef production
comes from dairy cows.
Marketing Cull Cows
•
Questions
– When are most cull cows sold
– When is the greatest demand for cull cow meat
•
Most sold from October – December
–
•
Pregnancy checked off grass, old poor performance
Greatest demand for Ground Beef
Summer Months ~ can be frozen for storage