TheBeefSite Newsletter - 18 July 2012

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Wednesday 18th July 2012

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Welcome to this week's newsletter

Editorial: Devastating Drought Puts Increasing Pressure on Already Struggling Industry

There appears to be little relief for US farmers and ranchers as the drought spreads relentlessly.

This week, it was announced that 55 per cent of the US is in moderate to extreme drought, the worst since 1956.

This year's drought is likely to be more detrimental because areas affected by last year’s drought have not been able to recover.

The feed situation

Despite the highest planted corn acres since the 1930s, USDA has slashed corn projections. In June, the USDA was projecting a record 166 bushels of corn per acre to be harvest this fall. That projected yield has been pushed down to 146 bushels per acre as of mid-July.

However the industry is sceptical, with some saying that yields are likely to go even lower, and could be as low as 138 bushels per acre.

While some rain has fallen in parts of the Corn Belt over the last week, it is not enough to make a difference to long term yields. It is too late for the corn crop in the southern areas, and growing areas of the Midwest and Plains could be next if the drought does not recede.

Futures markets were near record levels at around $8 per bushel.

Year-end stocks-to-use ratio are now expected to be around five per cent — the level believed by many to be the minimum possible.

Standing and harvest forage supplies remain low and pasture conditions continue to deteriorate.

Feeder cattle

In response to the rise in corn and grain prices, feeder cattle prices have fallen, as feedlots recognise the increased feed costs that lie ahead of them.

Already struggling from tight margins, future prospects for feedlots look dim. The latest Livestock, Dairy and Poultry Outlook for the USDA says that projected margins for fed cattle marketed in July are in excess of -$200 per head (based on $117 per cwt fed cattle prices).

Poor pasture conditions has already pushed more cattle to feedlots and slaughter, causing cattle prices to drift lower. These increased placements, along with higher feed costs are expected to dampen weight growth.

The drought has most likely put heifer-retention on hold, meaning further declines in the US cow inventory.

With the world facing shortages of agricultural supplies, an increasing number of farmers and ranchers leaving the industry, drought in the US is just another problem for a struggling industry to face.

Charlotte Johnston

This Week's Feature Articles

We have 4 new features this week:

Protect Cattle from Heat Stress
Being proactive is the best way to deal with heat stress in cattle.

Drought-Damaged Corn Silage Considerations
Drought-damaged corn silage may be worth 75 to 95 per cent the feeding value of normal corn silage, writes Stephen Boyles, Ohio State University Extension Beef Specialist.

Bedding Material in Dirt-Floor Pens Reduces Heat Stress
D.J Rezac, D.U. Thomson and C.D. Reinhart look at how different bedding material in dirt-floor pens can reduce heat stress in feedlot cattle.

Priorities that Impact Feedlot Health
Jeremy Schefers from the University of Minnesota Veterinary Diagnostic Laboratory lists the top 10 priorities that impact feedlot health.

Market Reports

» AHDB European Market Survey - 6 July 2012
» CSO - Crops and Livestock Survey June 2011
» USDA Feed Outlook - July 2012
» USDA Livestock, Dairy and Poultry Outlook - July 2012
» Irish CSO Reports Agricultural Price Indices - May 2012

Company News

IBR Vaccine Programme Offers Simplicity
UK - Protection from IBR for up to 12 months is available to beef and dairy farmers using a new vaccination programme.

Sustainable Solution to Help Optimise Productivity
AUSTRALIA - A recent nutritional study utilizing 201 Droughtmaster stud bulls conducted in Rockhamptom, Queensland, Australia by Novus International, Inc., produced a sustainable solution with significant results that directly enhance reproductive performance, and numerical improvements in average daily gain and feed efficiency.

Zilpaterol Ready for JECFA Assessment
US - Early in 2012, Merck Animal Health (known as MSD Animal Health outside the USA and Canada) proposed zilpaterol hydrochloride, the active ingredient of ZILMAX®, to the Joint FAO/WHO Expert Committee on Food Additives (JECFA) to establish an Acceptable Daily Intake (ADI) and Maximum Residue Levels (MRL) for cattle tissues (muscle, fat, liver, and kidney).

Global Beef Cattle Industry News