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TheBeefSite Newsletter - 30 July 2014

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Wednesday 30th July 2014.
Michael Priestley - Editor

Michael Priestley

Novus International

MSD Animal Health

Ensuring You Benefit From Cheaper By-products

Mid-summer has yielded feeders and ranchers an opportunity to source cheap feed for the coming winter thanks to the recent decline in distillers dried grains prices.

May and June typically see distillers dried grains (DDGs) increase in price but this year values have dropped faster than corn, potentially of great benefit to cattle profitability.

This is according to South Dakota Extension Experts Professor Darrell Mark, an agricultural economist and Cow/Calf agent Warren Rusche, who have outlined the $125/ton drop since late March.

This is a bigger drop than corn, explained Professor Darrell Mark, adding: “While lower corn prices generally translate into lower absolute prices for distillers grains, the decline in distillers grains prices is proportionally larger than the decline in corn prices.”

From trading as high as 153 per cent of corn prices, DDGs plummeted to as low as 65 per cent by early July Professor Mark added.

This marked drop can be explained by several factors, not least the pressure from the falling Soybean and Corn price.

However, a 50,000 barrels per day rise in ethanol production over the midsummer period has combined with China’s import ban on US DDGs to leave stock on the domestic market.

“China, the largest buyer of distillers grains in the world, was sharply increasing its imports of distillers grains in recent months to support its livestock industry,” he added.

“On June 9, 2014, China announced it would not issue import permits for U.S. distillers grains.”

Prior to the official ban, which was over the presence of a genetically modified trait in US DDGs, China’s largest port had ceased issuing permits in May.

A price drop of $60/ton was reported after the China ban, added Professor Mark.

Consequently, livestock farmers have the opportunity to ‘lock in’ a low feed price for winter, although should be aware of the potential storage headaches DDGs can bring, cattle expert Mr Rusche warned earlier this month.

He advised that complications are higher labour costs, the price of using covers or bags and the availability of rough feed if mixing is necessary.

“Storing WDGS can be challenging because the product by itself does not readily stack or pack in a bunker or pile,” he explained.

“One approach to solve that problem has been to mix about 70 to 80 per cent WDGS and 20 to 30 per cent roughage on an as-fed basis.”

Another solution could be the use of silage bags, while Modified Distillers Grains lend themselves better to being stored in a bunker or pile as they contain less moisture.

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This Week's Articles and Analysis

Lock in Lower Feed Costs: Storing Wet and Modified Distillers Grains
Those looking to feed distillers grains this winter should look to buy now as a great way to 'lock in' lower feed costs, advises Cow/Calf field specialist Warren Rusche.

Price Risk Protection Tools for this Uncertain Market
Market events and reactionary behaviour warrants risk management strategies, states John Michael Riley, Extension Agricultural Economist, Mississippi State University.

Effective Biosecurity Planning - Regularly Changing Needles
Having a biosecurity plan is all about ensuring the end product is safe and wholesome for the consumer's plate and can be made easier by a five point plan.

Warts in Cattle: Cause and Cure
Cattle warts are caused by six strains of a virus which associate to different body areas, according Rachel Endecott, Beef Specialist at Montana State University.

Company News

New Website for Sheep Sector
UK – Today, 5M Publishing officially launches TheSheepSite – the latest in the company's stable of agriculture and livestock oriented websites.
Novus International Launches Website Focused for Customers in China
US - Novus International officially launched a new version of its global website tailored to the needs of the China market.
Market Reports

Australian Rural Commodities Wrap - July 2014
EBLEX Cattle Weekly - 25 July 2014
USDA Cattle on Feed - 25 July 2014
USDA Livestock Slaughter - 24 July 2014

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