November 15, 2010
For grain producers, the USDA crop production report is expected to be bullish with even better prices for the corn and soy in their bins in the next few months.
The cost of feed grains has gone up US$2 per bushel during the past two months and some analysts think corn can reach US$6.50 or higher before things level out.
Livestock producers are concerned about it, said Beth Doran, an Iowa State University Extension beef programme specialist, based in Sioux County. As a result, she said, cattle producers are looking at different options for keeping their input costs down as they finish cattle to market weights.
One option is buying bigger feeder calves and yearling steers when refilling feedlots. Doran said the attempt is to spend less time feeding each head, thereby cutting the amount of corn needed to finish them.
Another option is switching diets and rations. "Iowans are fortunate to be close to ethanol byproducts," Doran said. She noted that some producers are opting for feeding more byproducts and less corn.
"Producers will sell their cattle when they think they are ready to go," Doran said. "When feed costs are down, they tend to market their cattle later, trying to get those extra pounds."
One saving grace for cattlemen restocking feedlots is that the supply of cattle is down. Doran said cattle numbers are the smallest they have been since the 1950s. That translates into a high cash price at market time, as well as higher replacement costs.
