Thursday September 19 Ag News

Feeder and Live Cattle Markets Face Mixed Signals as Fall Approaches
Elliott Dennis, UNL Associate Professor, Livestock Marketing Specialist

As the cattle market reopened following Labor Day, feeder and live cattle futures weakened to contract low levels of resistance. The October feeder cattle contract ended on a down note at approximately $230, as the market continues to grapple with whether prices will rise this fall amid uncertainty over how many heifers will go through sale barns. A significant factor contributing to current market conditions is the deterioration of pasture conditions, which has led to expectations that some feeder cattle will be brought to market earlier. However, this impact is tempered by a large hay crop and the availability of cheap feed, both of which are already being priced into the market.

Of the 12 states that contribute to the CME Feeder Cattle Index, 10 reported price declines over the past week. Nebraska, however, stood out as an exception, with a strong rebound in the prices of 500-600 lb. cattle, surging to nearly $340 per cwt. after several weeks of decline. Meanwhile, prices for 700-800 lb. cattle in Nebraska have stabilized at around $260 per cwt. Looking ahead, the basis—a measure of the difference between cash market prices and futures prices—is expected to remain high. Currently, the basis stands around +30 for 700-800 lb. cattle and +75 for 500-600 lb. steers in Nebraska, reflecting strong cash market conditions. These levels are near all-time highs, suggesting solid market appreciation for feeder cattle prices despite broader volatility. The anticipation of herd rebuilding during the fall and winter could further drive prices higher, potentially continuing into 2025.

Live Cattle Market Mirrors Feeder Market Uncertainty
The live cattle market reflects similar uncertainties. The December contract dropped by $5 per cwt. over the past week, with resistance remaining around $173. There is a possibility that the market could move another $1.50 lower to reach a resistance level similar to that of December 2023. To push beyond this level, however, a significant market driver would be required.

Several factors could impact live cattle prices in the coming months, including feed costs and carcass weights. Feed costs are decreasing due to a historically large corn crop and low-priced distillers' grains, which reduces the cost of feeding cattle for longer periods. However, there is ongoing debate over whether producers will aim for heavier weights on existing cattle rather than placing relatively more expensive feeder cattle. Harvest weights are unusually high but are beginning to align with seasonal patterns. If current trends continue, steer weights could reach 960 pounds by the fall, creating challenges for feedlots, some of which have already faced heavy cattle discounts. It remains to be seen whether processing plants will be able to manage a lower cattle supply with heavier weights profitably. The narrowing Choice-Select spread, which reflects an increased preference for leaner beef, is likely to play a role in these decisions.

Shifting Beef Cutout Dynamics
One driver of the narrowing Choice-Select spread is the strong market for ground beef, which is made from beef trimmings. Beef trimmings from fed cattle are typically 50% lean, while those from cull cows are 90% lean. These two products are often mixed in a five-to-one ratio to produce an 80/20 lean-to-fat blend. Currently, there is a shortage of lean beef products in the market, which incentivizes producers to focus on producing more select carcasses. This trend is partly driven by the high cutout value for cull cows, which is around $290 per hundredweight (cwt). For comparison, the cutout value for Choice steers is $310 per cwt, meaning that all products from a cull cow carcass are almost as valuable as those from a fed steer.

These high prices are encouraging significant pull-through of cattle for slaughter. Earlier in the year, most of the slaughtered cows came from beef herds, but in recent weeks, there has been a shift toward dairy cows. This shift reflects the extremely strong demand for ground beef products, which is currently driving the market. As we move into the fall, it remains to be seen whether this demand will continue and whether consumers will be willing to pay higher prices for basic products like ground beef.



NFS Hosts Trees, People and Towns Conference in Lincoln

The Nebraska Forest Service is pleased to announce the Trees, People and Towns Conference at the University of Nebraska Lincoln, Oct. 15-17, 2024. The conference brings together tree advocates, practitioners, tree-board members, parks or public works personnel, planners, community leaders, city administrators, city clerks, non-profits, or those responsible for community trees in small towns and mid-sized cities.

"We are excited to bring this conference to Nebraska," said Christina Hoyt, bureau chief for the Nebraska Forest Service. "This is an opportunity for those involved with community trees to walk away inspired and with tangible ideas to bring back to their communities. The speaker line-up is top-notch."

Attendees will participate in insightful discussions, engaging presentations, hands-on workshops, field experiences, and networking opportunities. Topics will focus on strengthening community forestry policy, practices, partnerships, and public engagement. The agenda includes:
    Oct. 15: A morning Tree City USA, Tree Line USA, and Tree Campus Higher Education celebration, followed by a Pre-Conference workshop on Tree Risk Management in the afternoon.
    Oct. 16: Tree, People and Towns conference and evening networking event
    Oct. 17: Field experiences in the morning, followed by the Nebraska Statewide Arboretum Curator’s meeting in the afternoon.

This event is hosted by the University of Nebraska IANR-Nebraska Forest Service, Nebraska Community Forestry Council, Nebraska Statewide Arboretum, University of Nebraska Community and Regional Forestry Program, Colorado State Forest Service, Kansas State Forest Service, Wyoming State Forestry Division, South Dakota Department of Agriculture and Natural Resources Resource Conservation and Forestry Division and the USDA Forest Service Region 2.

Those interested can find out more and register by visiting nfs.unl.edu/workshops or contact Christina Hoyt at choyt2@unl.edu for any questions. Registration closes on Oct. 1, 2024.



HUSKER FINDINGS BOOST UNDERSTANDING OF SORGHUM’S PEST RESISTANCE

Husker scientists have identified a key plant hormone that strengthens sorghum self-protection against the threat of the sugarcane aphid. The federally funded project is part of the university’s wide-ranging, multidisciplinary work to advance understanding of sorghum’s natural defenses against the pest.

University of Nebraska–Lincoln scientists, in collaboration with the U.S. Department of Agriculture’s Agricultural Research Service, pointed to the significance of auxin/IAA metabolism and auxin conjugate IAA-Asp, which are involved in various aspects of plant growth and development.

Sorghum resistance was greater when the plants had a higher level of the identified IAA-Asp hormone due to a mutation in the gene Bmr12, said Joe Louis, Harold W. Eberhard Professor of Agricultural Entomology. Husker researchers are primarily focused on how the mutation of this gene affects the aphid population and the mechanism behind it, he said.

After identifying the importance of the IAA-Asp hormone, researchers added varying amounts of it to the aphid diet and found it boosted sorghum’s natural pest resistance.

The researchers’ findings recently appeared in the journal New Phytologist.

Natural defenses for sorghum are intended as a supplement to other measures such as pesticides and genetically modified plants. Adding that natural protection may provide more durable and sustainable protection overall, Louis said.

The sugarcane aphid has been a serious pest for sorghum in the United States since 2013, causing damage in multiple ways.

First, aphids use their needle-like mouthpart to pierce the plant and suck out nutrients without any visible damage initially to the plant. Second, the pests’ excretions, or honeydew, cover parts of the plant and disrupt photosynthesis crucial to the plant’s well-being. Third, aphids can transmit viral diseases.

“If the plants survive and are ready for harvest and there is a lot of honeydew, the harvester gets clogged,” Louis said.

The Husker project is unique for its a “holistic” multidisciplinary approach to this area of science, he said. The researchers pursue high-level study of cells and tissues, as well as biochemical, electrophysiological and computational analysis.

Louis and his colleagues will follow up by studying whether the hormone is effective in boosting plant resistance to other types of aphids. They also will look for additional biological factors possibly affecting sorghum’s level of natural self-protection.

The project illustrated the university’s tradition, extending back to the late 1800s, of research collaboration with U.S. Department of Agriculture scientists. A co-author of the New Phytologist paper is Scott Sattler, adjunct professor of agronomy and horticulture and research leader with the USDA Agricultural Research Service Wheat, Sorghum and Forage Research Unit on East Campus.

In addition to Louis, the other co-authors are Sajjan Grover and Heena Puri, doctoral alumni in entomology; De-Fen Mou, former postdoctoral research associate in entomology; Kumar Shrestha, postdoctoral research associate in entomology, and Lise Pingault, senior research associate in entomology.

A National Science Foundation CAREER grant to Louis supported the project, as did a grant from USDA’s National Institute of Food and Agriculture to Louis and Sattler.

The project took interesting twists and turns, beginning with study of lignin, a polymer providing cell wall stability and aiding water transport. Louis and his colleagues initially thought changes in lignin levels were central to understanding resistance to the aphid. But the findings didn’t square with that hypothesis.

“To our surprise, we found it has nothing to do with lignin,” Louis said. “That made us think, what else is going on? So we started looking at using all these different technologies available here.”

The scientists’ multidisciplinary analysis “helped us narrow down to this compound, the indole-3-acetic acid, conjugated with the amino acid aspartate,” he said. “Then, we tested it directly into the aphid diet, and we found this compound is providing resistance to the aphid.”

Such perambulations of research are an expected part of complex scientific inquiry, Louis said.

“This is the way science works,” he said. “We started somewhere, and we ended somewhere else. But that's the fun part of doing science.”



Corn residue grazing project info to be shared in webinar

If you were interested in learning more about the grazed corn residue project but just couldn't make the Creston field day work in your schedule, we have good news! The event has been changed to a free webinar-only format on the same date beginning at the same time, September 24 at 10 a.m.

Harvest season is just around the corner, and with it comes an abundance of corn residue ready for cattlemen to utilize. When planning how many grazing days are available, Iowa State University extension program specialist Beth Reynolds said it’s important to look at some potential positive changes in that number.

"It's time to take the traditional guidelines and apply considerations for the impact improved plant varieties and harvest methods have on the residual product available to graze," she said. "Being able to more accurately predict the feed value of corn residue is an important step for producers looking for avenues to be more efficient with their winter feeding plan.”

The Iowa Beef Center has partnered with the University of Nebraska–Lincoln to host the program, which will specifically highlight a recently completed research project at University of Nebraska–Lincoln funded by the Iowa Beef Checkoff. Dr. Mary Drewnoski, associate professor and extension beef systems specialist at UNL, led the project and said the study was designed to identify how the implementation of modern-day chopping corn heads has impacted the feed value of grazed corn residue.  

Webinar agenda topics and approximate schedule:
    10 a.m. Lease or rental agreement considerations
    10:45 a.m. Chopping corn residue impact on feed value
    11:30 a.m. Determining stocking rates and agronomic impacts
    12:30 p.m. Nutritional considerations grazing residue

Speakers are from UNL and ISU, including Drewnoski and Reynolds. The program has been made possible in part by the USDA and the Iowa Forage and Grassland Council.

Register here https://iastate.qualtrics.com/jfe/form/SV_aVj1y3OfN4GjtUq and receive the link to the webinar. The program will be recorded and that video link sent to registered participants when available.

For more information, email bethr@iastate.edu or call 515-294-BEEF (2333).



Three Fertilizer Prices Down Significantly in Second Week of September

For the first time in eight weeks, multiple average retail fertilizer prices showed considerable declines during the second week of September 2024, according to sellers surveyed by DTN. Prices for seven of the eight major fertilizers were lower compared to last month. In addition, three fertilizers had sizeable price declines. DTN designates a significant move as anything 5% or more.

Potash led the way lower, down 8% from a month ago, with an average price of $464. Both 10-34-0 and UAN32 were 7% less expensive with 10-34-0 having an average price of $596 per ton and UAN32 $351/ton. 10-34-0 was below the $600/ton level for the first since the first week of January 2024. That week the average price was $599/ton. Four other fertilizers were slightly lower compared to last month. DAP had an average price of $735/ton, MAP $808/ton, urea $489/ton and UAN28 $329/ton.

One fertilizer was slightly more expensive. Anhydrous had an average price of $684/ton, up $6 per ton from last month.

On a price per pound of nitrogen basis, the average urea price was $0.53/lb.N, anhydrous $0.42/lb.N, UAN28 $0.59/lb.N and UAN32 $0.55/lb.N.

Prices for all except two fertilizers are lower compared to one year ago. DAP is 4% higher while MAP is 9% higher looking back to last year. Prices for the remaining six fertilizers are lower. 10-34-0 is 1% lower, anhydrous is 2% less expensive, both potash and UAN28 are 7% lower, UAN32 is 10% lower and urea is 12% lower compared to last year.



Weekly Ethanol Production for 9/13/2024

According to EIA data analyzed by the Renewable Fuels Association for the week ending September 13, ethanol production pared back 2.9% to a 12-week low of 1.05 million b/d, equivalent to 44.06 million gallons daily. Still, output was 7.0% more than the same week last year and 12.7% above the five-year average for the week. The four-week average ethanol production rate declined 1.2% to 1.07 million b/d, which is equivalent to an annualized rate of 16.37 billion gallons (bg).

Ethanol stocks ticked up 0.3% to a 7-week high of 23.8 million barrels. Stocks were 9.7% more than the same week last year and 11.4% above the five-year average. Inventories built across all regions except the Midwest (PADD 2).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, improved by 3.5% to 8.78 million b/d (134.90 bg annualized). Demand was 4.4% more than a year ago and 0.9% above the five-year average.

Refiner/blender net inputs of ethanol followed, rising 1.8% to 908,000 b/d, equivalent to 13.96 bg annualized. Net inputs were 1.9% more than year-ago levels and 2.2% above the five-year average.

Ethanol exports were estimated at a robust 151,000 b/d (6.3 million gallons/day) despite a 14.7% decline from the prior week. It has been a full year since imports of ethanol were reported by EIA.



JBS unlocks renewable gas production at US beef and poultry plants

JBS USA will produce renewable natural gas at multiple beef and poultry processing plants as part of a new partnership with GreenGasUSA, the meat giant said Tuesday.

The collaborators plan to collect methane from wastewater streams at JBS facilities using GreenGasUSA’s on-site upgrading systems, which can purify biogas into pipeline-quality renewable natural gas.

The company said it will begin installing GreenGasUSA’s systems at JBS-owned processing plants in Nebraska, South Carolina and Utah, and plans to complete the additions next year.

Through advancements in technology and innovation, JBS and other meatpackers are turning to renewable natural gas, an energy source produced from manure and other waste streams, as a potential sustainability solution that can generate untapped revenues.

GreenGasUSA is a Charleston, South Carolina-based provider of renewable natural gas assets, including anaerobic digesters and gas purification infrastructure. The partnership comes as JBS focuses its efforts to reduce methane emissions from its organic waste lagoons, with the meat giant initiating more than 25 projects over the past five years.

By diverting methane from processing plants and injecting the transformed fuel into existing energy pipelines, the project with GreenGasUSA will displace the emissions equivalent of 60 million miles driven by a car, or 26 million pounds of coal burned, annually, according to a release.

“This innovative approach takes what was once an unused byproduct of food production and transforms it to offset a significant amount of fossil fuels,” CEO Wesley Batista Filho said in a statement.

JBS is set to pilot GreenGasUSA’s systems at beef facilities in Grand Island, Nebraska and Hyrum, Utah, as well as at a Pilgrim’s Pride chicken plant in Sumter, South Carolina. Construction and installation is slated for completion in 2025.

These efforts come as environmental activists step up a campaign against JBS’ plan to list shares on the New York Stock Exchange over the meat giant’s environmental record. Climate groups have pressured the livestock industry to do more on climate, and called on JPMorgan Chase, Citigroup and other large banks to stop financing global meat and dairy companies.



New era of value-added calf programs shows what buyers value

Quality nutrition is at a premium in an evolving feeder calf market. For several decades, value-added programs have emphasized health protocols and genetics. Now, nutrition is taking its rightful place by factoring into buying decisions.
 
“Cow-calf producers can certainly benefit from being involved with value-added programs that highlight nutrition,” says Ted Perry, cattle nutritionist with Purina Animal Nutrition. “These programs truly make better cattle. The calves are hardier, have a better immune system and are more ready to go to the feedyards.”
 
Mineral nutrition program
Last year, Purina Animal Nutrition introduced the Purina® Wind and Rain® Mineral Value-Added Program, one of the first feeder calf programs to provide buyers with calves that have a foundation built on quality mineral nutrition. Calves enrolled in the program receive vitamins and minerals from conception to weaning.
 
Enrollment requirements for the Purina® Wind and Rain® Mineral Value-Added Program include:
    Work with a local Purina® dealer to enroll in the program.
    Feed dams Purina® Wind and Rain® Mineral or Purina® RangeLand® Pro mineral for the full year in which you are raising the calves. A minimum of two bags of loose mineral per cow or one 225-pound mineral tub per two cows must be fed for the year.
    Qualifying calves receive Purina® mineral as part of their nutrition program from conception through sale delivery.

“It’s one of the simplest yet effective value-added programs available,” says Perry. “And, if you want to participate in other programs, you still have the option to pair it with the Purina® Wind and Rain® Mineral Value-Added Program.”
 
Calves buyers want
By feeding a high-quality, complete mineral program, you help set calves up for optimal health and performance in the next phase, which helps drive profitability across the value chain. Buyers have the extra assurance that the calves they are purchasing will have a foundation for performance.
 
“Cattle buyers are looking for calves fed a complete mineral program so they’ll have an active immune system,” says Perry.
 
Superior Livestock Auction sales data from 2023 shows that by participating in the Purina® Wind and Rain® Mineral Value-Added Program, you could see sizable average premiums of up to $31 per head.
 
“That’s about 2% more value added to calves,” says Perry. “It’s worth it to me if I’m buying calves and they’ve been in this program because I know those calves will have a primed immune system.”
 
Calves enrolled in the Purina® Wind and Rain® Mineral Value-Added Program are currently available for purchase at both Superior Livestock Auction and Western Video Market sales, along with participating local livestock auctions.