Thursday April 24 Ag News

Carcass grid pricing tradeoffs
Alfredo DiCostanzo, Nebraska Beef Systems Extension Educator

Marketing cattle on a carcass grid is an increasingly attractive option for cattle feeders, particularly when fed cattle prices are high and continued interest by consumers for highly marbled beef. Yet, a few fundamentals must be kept in mind when evaluating this marketing strategy.

The simplest one to consider is the dressing percentage. The price basis for all grid marketing arrangements is live price with an expectation that most cattle will dress around 63.5%. The simplest question to ask is what happens if we market cattle on a carcass grid (or simply as grade and yield) that dress lower than 63.5%?

Using publication LM_CT158 from USDA (Nebraska Weekly Direct—Negotiated Purchases) for the week ending on April 12, 2025, the average weight and price of all steers traded live (FOB) or dressed (delivered) were 1,553 lb and $207.88 (dressing 63.1%) or 989 lb and $328.07 (dressing 63.8%). During that week, if a cattle feeder sold a steer weighing 1,553 lb under a negotiated grid arrangement, which dressed out at 62.5%, then that feeder delivered 971 lb of carcass. Using the base negotiated grid price of $328.07 for a reference, the feeder received $3,184 instead of $3,244 expected if their cattle would have dressed as the average of cattle traded on the negotiated grid.

Weight, level of intake, haircoat tag, degree of finish, time between last meal and harvest, and dietary concentration influence dressing percentage. Greater weight, degree of finish, dietary energy concentration and time between last meal and harvest all influence dressing percentage positively while intake and presence and abundance of haircoat tag influence dressing percentage negatively.

Also, for cattle feeders marketing cattle on a carcass grid, most base price quotes are for cattle delivered to the plant. Therefore, the additional cost of hauling cattle to the plant must be absorbed by the seller. This will reduce gross revenue from $0.70 to $2.50/cwt of carcass.

Because of the high cost of purchasing replacement cattle, low feed costs, and attractive fed cattle prices, the incentive to feed cattle to heavier weights is difficult to ignore. In addition to considerations to maintain cattle alive and healthy as they reach weights beyond 1,550 lb, the effects of heavier finishing weights on carcass quality and size must be evaluated.

Simple assumptions were made to arrive at carcass grid pricing tradeoffs that might be used by cattle feeders considering marketing cattle on a carcass grid. The original example selected used cattle weighing 989 lb, for the purpose of easy approximations, the carcass weight used was rounded to 1,000 lb.

Other factors were kept constant to generate meaningful approximations. For example, the proportion of carcasses grading Select was maintained at 10% while the Choice-Select spread was permitted to fluctuate. As carcasses from cattle harvested in the upper Midwest continue to top 85% Choice and Prime grades, setting the proportion of Select-grading carcasses at 10% is not detrimental to the simulation. Under these conditions, a change in Choice-Select spread of $1/cwt represents a change in carcass revenue of $1/head.

Similarly, keeping premiums for carcasses achieving Certified Angus Beef (or similarly rewarded top 2/3 of USDA Choice-grading carcasses) at $6/cwt resulted in $6/head for every 10 points of CAB percentage achieved. Using this same approach and holding Prime premiums at $20/cwt results in $2/head for every point of Prime percentage achieved.

Lastly, discounts of $5/cwt or $15/cwt for carcasses reaching USDA Yield Grade (YG) 4 or USDA YG 5, respectively, resulted in changes of $5/head for each 10-point change in USDA YG 4 or $1.50/head for each 1-point change in USDA YG 5.

The effect of heavy carcass discounts on grid pricing was simulated using $15/cwt for carcasses 1,100 lb or heavier. This discount had a $1.50/head effect for each percentage unit change in the proportion of carcasses weighing 1,100 lb or more.

When applying these tradeoffs to carcass weight sold, the effect of each of these factors can be illustrated. For example, if two identical lots of cattle sell to the same packer on a given day, one of the loads delivers 15% of the weight from heavy carcasses while the other one delivers none. Using the tradeoff applicable for carcass weight provided here would suggest that gross revenue of the lot with heavier carcasses will be $22.50/head less than the one with no heavy weight discounts.

Similarly, as Choice-Select spread climbed towards $20/cwt from $15, the effect of this on carcass pricing was a reduction in carcass revenue of $5/head.

Alternatively, one can determine how much better the proportion of a set of premium carcasses should be relative to a set of discounted carcasses. For example, a lot of cattle yielding 20% in Prime carcass premiums ($40/head) is offset by 27% incidence of carcasses weighing 1,100 lb or heavier.

These tradeoffs are by no means complete and applicable to all situations, particularly when considering that a greater proportion of heavyweight carcasses would skew these values negatively. However, these tradeoffs represent a guide to quickly determine what effects feeding cattle to heavier weights would have on carcass revenue when marketing on a grid.



Dr. George Graef Honored with the 2025 Larry Tonniges Research Achievement Award

For more than three decades, Dr. George Graef has been a driving force in soybean research, dedicating his career to improving soybean genetics and enhancing the crop’s value for Nebraska farmers. In recognition of his contributions, Graef has been named the recipient of the 2025 Larry Tonniges Research Achievement Award by the Nebraska Soybean Board (NSB).

The award, made possible by the family of the late Larry Tonniges, a longtime Nebraska farmer who was dedicated to production research as part of NSB, honors researchers who have made significant contributions to soybean research.

As a professor and the Presidential Chair of Soybean Breeding in the University of Nebraska–Lincoln’s Agronomy and Horticulture Department, Graef has led a research program focused on increasing soybean yields, developing disease-resistant varieties and improving seed composition traits.

Graef’s journey in soybean breeding began with a strong foundation in plant genetics. After earning his B.S. in environmental horticulture from the University of Connecticut in 1982, he pursued graduate studies at Iowa State University, where he obtained his M.S. and Ph.D. in plant breeding and cytogenetics. His deep knowledge and experience have made him a leader in the field, driving important progress in soybean breeding programs in Nebraska and beyond.

His research has consistently focused on three key objectives: increasing soybean yield, protecting that yield from diseases and environmental stressors and improving seed composition for better protein and oil content. By conducting evaluations on farmer-cooperator sites across Nebraska, Graef and his team gather data directly relevant to producers, allowing them to develop soybean varieties specifically suited to the state’s growing conditions.

One of the significant achievements of Graef’s research program has been the development of soybean lines with strong resistance to soybean cyst nematode (SCN), a persistent pest that can cause substantial yield losses. His work has resulted in elite soybean varieties that maintain high yields and offer enhanced resistance to multiple SCN populations. These advancements provide Nebraska farmers with more effective tools to combat this widespread problem and maintain profitability.

Through strategic breeding and integration of genetic, agronomic and imaging data, the program successfully shared 48 unique soybean lines with companies and research institutions in 2024, contributing to a broad network of variety development.

Additionally, the Winter Nursery Project in Puerto Rico and Chile has been instrumental in accelerating research. By leveraging five additional growing cycles per year, researchers can rapidly advance generations, conduct essential DNA analysis and refine selections for traits critical to Nebraska farmers. The nurseries provide an efficient platform for developing resistant soybean lines, refining seed composition and supporting ongoing research collaborations that benefit producers across the north-central United States.

Graef’s impact extends beyond research plots and laboratory findings. He has also played a crucial role in training the next generation of soybean breeders. Through his courses, he has mentored countless students who have gone on to leadership positions in the seed industry, university research programs and other agricultural sectors. Additionally, Graef’s research has explored soybeans for human food uses, further diversifying the potential applications for the crop.

Nebraska soybean farmers have benefited from Graef’s research in ways that go beyond improved yields. His work has contributed to the development of soybeans with higher protein and oil content, offering increased value for processors and end users. With another new soybean processing facility set to open in Nebraska in the coming months, these advancements will play a crucial role in expanding market opportunities for growers.

Upon receiving the award, Graef expressed his appreciation:

“I am honored to be selected to receive the 2025 Larry Tonniges Research Achievement Award from the Nebraska Soybean Board. Thank you for your consideration and your constant, unwavering support. From my first days in Nebraska more than 35 years ago, I felt welcomed by the Board and all the producers I had the good fortune to meet and work with over the years. I could not have asked for a better place to learn and grow both professionally and personally. I continue to learn so much from attending board meetings, and I have tremendous admiration and respect for what you do on your farms and in your service to agriculture here and around the world. That is motivating for me to contribute in some small way from the variety and genetics perspective to help reach our shared goals for a productive and sustainable future.”



Smith, Bipartisan Colleagues Call for E15 Waiver to Provide Fuel Price Relief

Representatives Adrian Smith (R-NE), Angie Craig (D-MN), Ashley Hinson (R-IA), and Mark Pocan (D-WI) led 25 members of Congress urging the administration to lower prices at the gas pump by allowing the nationwide sale of E-15 this summer. The bipartisan letter asked President Donald Trump to extend the Reid vapor pressure (RVP) waiver to permit the sale of ethanol blends up to 15 percent from June 1 through September 15, 2025 and engage directly with requests from eight Midwestern states, including Nebraska, to maintain uniform access to ethanol blends.

In the letter the members wrote:

“To safeguard our energy supply, we must preserve the home-grown, affordable option higher ethanol blends provide. The administration’s efforts to unleash American energy independence is a long-term goal but can begin in the short term with preserving flexibility in our domestic energy production and supply through this emergency waiver.”  

“Extending the nationwide sale of E15 can again bolster our nation’s energy resilience by adding billions of gallons of ethanol to the nation’s fuel supply, lowering the cost of gas for American families at a time when prices are already too high. As affirmed when you first allowed for year-round E15 in 2019, and those approved for the summers afterward, the sale of higher blends of biofuels during the summer months supports the domestic fuel supply, reduces consumer costs, and promotes American biofuels and agriculture feedstocks.”



RFA Thanks Lawmakers for Bipartisan Support of Summertime E15 Waiver

The Renewable Fuels Association today thanked 25 members of the House of Representatives who sent a bipartisan letter to President Trump urging his administration to allow unimpeded sales of lower-cost E15 through the summer months. The legislators noted that without an emergency waiver in place soon, E15 won’t be available to drivers beginning June 1.

“We thank this bipartisan group of lawmakers for their efforts to protect consumer access to the lowest-cost fuel available in the marketplace," said RFA President and CEO Geoff Cooper. "We join them in calling on the Trump Administration to take swift action to allow the nationwide sale of E15 through the coming summer. These leaders understand that E15 saves American families money, while also strengthening the rural economy by keeping an important market open for farmers. As geopolitical conflict continues to create uncertainty in global energy markets, it is important that drivers have access to an American-made supply of lower-cost, cleaner fuel.”

The letter was sent by Reps. Adrian Smith (R-NE), Angie Craig (D-MN), Ashley Hinson (R-IA), Mark Pocan (D-WI), Sharice Davids (D-KS), Eric Sorensen (D-IL), Michelle Fischbach (R-MN), Nikki Budzinski (D-IL), Brad Finstad (R-MN), Mark Messmer (R-IN), Dusty Johnson (R-SD), Tracey Mann (R-KS), Derek Schmidt (R-KS), Emanuel Cleaver (D-MO), Randy Feenstra (R-IA), Zach Nunn (R-IA), Mike Flood (R-NE), Ron Estes (R-KS), André Carson (D-IN), Mariannette Miller-Meeks (R-IA), Don Bacon (R-NE), Kristen McDonald Rivet (D-MI), Mike Bost (R-IL), Sam Graves (R-MO) and Derrick Van Orden (R-WI).

“Extending the nationwide sale of E15 can again bolster our nation’s energy resilience by adding billions of gallons of ethanol to the nation’s fuel supply, lowering the cost of gas for American families at a time when prices are already too high,” they wrote. “As affirmed when you first allowed for year-round E15 in 2019, and those approved for the summers afterward, the sale of higher blends of biofuels during the summer months supports the domestic fuel supply, reduces consumer costs, and promotes American biofuels and agriculture feedstocks.”



 2024 Red Meat Production Up 1 Percent from 2023

Total red meat production for the United States totaled 55.0 billion pounds in 2024, 1 percent higher than the previous year. Red meat includes beef, veal, pork, and lamb and mutton. Red meat production in commercial plants totaled 54.9 billion pounds. On-farm slaughter totaled 91.0 million pounds.

There were 1,089 plants slaughtering under federal inspection on January 1, 2025 compared with 1,012 last year. Of these, 911 plants slaughtered at least one head of cattle during 2024 with the 12 largest plants slaughtering 51 percent of the total cattle killed. Hogs were slaughtered at 763 plants, with the 15 largest plants accounting for 64 percent of the total. For calves, 4 of the 140 plants accounted for 71 percent of the total and 4 of the 664 plants that slaughtered sheep or lambs in 2024 comprised 37 percent of the total head.    

Iowa, Nebraska, Kansas, and Texas accounted for 50 percent of the United States commercial red meat production in 2024, up 1 percent from 2023.
(million lbs.   -    2024   -   2023)
Iowa ..........:   9,164.8  -  8,954.8
Nebraska ...:   7,976.0  -   7,637.2
Kansas .......:   5,805.4  -   5,806.3
Texas ........:   4,474.3   -  4,525.7

Beef production totaled 27.0 billion pounds, up slightly from the previous year. Veal production totaled 45.3 million pounds, down 14 percent from last year. Pork production, at 27.8 billion pounds, was 2 percent above the previous year. Lamb and mutton production totaled 139 million pounds, up 3 percent from 2023.

Commercial cattle slaughter during 2024 totaled 31.8 million head, down 3 percent from 2023, with federal inspection comprising 98.2 percent of the total. The average live weight was 1,399 pounds, up 34 pounds from a year ago. Steers comprised 48.6 percent of the total federally inspected cattle slaughter, heifers 32.0 percent, dairy cows 8.7 percent, other cows 9.1 percent, and bulls 1.6 percent.

Commercial calf slaughter totaled 211,900 head, 28 percent lower than a year ago with 96.0 percent under federal inspection. The average live weight was 323 pounds, up 43 pounds from a year earlier.

Commercial hog slaughter totaled 130 million head, 1 percent higher than 2023 with 99.5 percent of the hogs slaughtered under federal inspection. The average live weight was up 1 pound from last year, at 288 pounds. Barrows and gilts comprised 97.3 percent of the total federally inspected hog slaughter.

Commercial sheep and lamb slaughter, at 2.21 million head, was up 2 percent from the previous year with federal inspection comprising 86.7 percent of the total. The average live weight was unchanged from 2023 at 119 pounds. Lambs and yearlings comprised 93.3 percent of the total federally inspected sheep slaughter.



Weekly Ethanol Production for 4/18/2025

According to EIA data analyzed by the Renewable Fuels Association for the week ending April 18, ethanol production rose 2.1% to 1.03 million b/d, equivalent to 43.39 million gallons daily. Output was 8.3% higher than the same week last year and 7.5% above the three-year average for the week. Still, the four-week average ethanol production rate decreased 0.5% to 1.03 million b/d, equivalent to an annualized rate of 15.86 billion gallons (bg).

Ethanol stocks contracted 5.0% to a 14-week low of 25.5 million barrels. Stocks were 1.0% less than the same week last year but 3.3% above the three-year average. Inventories thinned across all regions.

The volume of gasoline supplied to the U.S. market, a measure of implied demand, spiked 11.3% to 9.41 million b/d (144.71 bg annualized) —the highest weekly level since early October 2024. Demand was 11.8% more than a year ago and 5.9% above the three-year average.

Refiner/blender net inputs of ethanol climbed 2.1% to a 25-week high of 921,000 b/d, equivalent to 14.16 bg annualized. Net inputs were 2.4% more than year-ago levels and 3.0% above the three-year average.

Ethanol exports eased 45.3% to an estimated 75,000 b/d (3.2 million gallons/day). It has been more than a year since EIA indicated ethanol was imported.



UAN32 Retail Price Up 9%, UAN28 Price Up 7% From Last Month

Average retail prices for all eight major fertilizers continued to be higher than last month during the last full week of April 2025, according to sellers surveyed by DTN.

Two fertilizers had a sizable price increase from last month, which DTN designates as anything 5% or more. The average retail price of UAN32 was 9% higher compared to last month at $448 per ton. And UAN28 was 7% more expensive than last month with an average retail price of $380 per ton. The remaining six fertilizers had slightly higher prices. DAP had an average price of $781 per ton, MAP $822/ton, potash $467/ton, urea $577/ton, 10-34-0 $655/ton and anhydrous $781/ton.

On a price per pound of nitrogen basis, the average urea price was $0.63/lb.N, anhydrous $0.48/lb.N, UAN28 $0.68/lb.N and UAN32 $0.70/lb.N.

Four fertilizers are now higher in price compared to one year earlier. DAP is 1% higher, 10-34-0 is 2% more expensive, UAN28 is 4% higher and UAN32 is 7% higher looking back to last year. The remaining four fertilizers are lower. Both MAP and urea are 1% less expensive, anhydrous is 2% lower and potash is 9% lower compared to last year.



South Dakota Panel Rejects Permit For $8.9 B Carbon Capture Midwest Pipeline

(AP) -- The massive carbon capture pipeline in the Midwest was thrown into uncertainty Tuesday after South Dakota's Public Utility Commission denied its route permit application.

The commission voted 2-1 to deny the application by Iowa-based Summit Carbon Solutions, with Commissioner Kristie Fiegen saying it was "not ready to go forward" and lacked "the form and content required."

"The PUC's duty is to make a decision based on a route -- one route," said Fiegen, who initiated the motion to deny. "The current route, in my view, is not viable."

South Dakota lawmakers passed an eminent domain ban for carbon capture pipelines in March that made Summit's planned route difficult, commissioners agreed. After Tuesday's decision, Summit said it will refile its application with a reduced route in South Dakota to satisfy landowners and ethanol plant partners.

"While we are disappointed in today's decision, we remain committed to South Dakota as without it the ethanol industry, farmers, and land values in the state will all suffer," the company said in a statement.

South Dakota is a crucial part of the 2,500-mile pipeline, estimated to cost $8.9 billion. The pipeline would transport carbon emissions from ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota to be stored underground permanently in North Dakota. The project already has approvals in Iowa, Minnesota and North Dakota, and Summit has invested more than $150 million into its route in South Dakota.

Landowners rejoiced over the Tuesday decision.

"Today is a victory for South Dakota landowners and local control," Dakota Rural Action board member Ed Fischbach said in a statement. "We are grateful the PUC has made this common-sense decision and freed landowners to get on with their lives and businesses."

Summit had previously requested a timeline extension on its permit application to rework its route in a way that would satisfy landowners.

Questions about the pipeline arose after South Dakota lawmakers approved a ban on eminent domain for carbon capture projects, in which the government can seize private property with compensation. Without that power, Summit would need to secure voluntary agreements with landowners along the South Dakota route.

In its filing for an extension, Summit said it would work with landowners and the state in "good faith" rather than challenge the eminent domain ban. That statement convinced commissioners that there was no path forward for Summit given the amount of landowner opposition along the current route.

Instead of pursuing legal action against the state, Summit said in its filing that additional time would allow it to "roll out new offers to landowners" and identify which branches to ethanol plants it can eliminate that face significant landowner opposition.

The ethanol industry is concentrated in the Midwest, with nearly 40% of the nation's corn used to brew ethanol. By sequestering carbon in North Dakota, Summit's pipeline promises to lower the carbon intensity of ethanol and make it more competitive as a sustainable product.