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The Tennessee Feed and Grain Association 2014 Convention Agenda has been released. Click to view the 2014 Convention Agenda.

The Tennessee Feed and Grain Association announced its 2014 Annual Convention to be held at the Embassy Suites of Cool Springs, Franklin, TN. View the October 2013 Advertisement and register for the convention using the secure Online Convention Registration System

Click 2013 Agenda TFGA to view.

November 26, 2012

The difference between selling 550 lb. steers at the peak and the bottom of the 2012 market was a remarkable $286 per head. It was, of course, the weather this time—too little grass, too little corn. Nobody knows yet what will happen in 2013, but here are five areas to keep your eye on.

1. Weather. The National Oceanic and Atmospheric Administration assumes “normal” weather next year, with a few rainy pockets in parts of the country. Not long ago, it was looking for El Niño to deliver lots of moisture to the most important grass and corn areas. A third year of drought is the last thing cow–calf folks can afford. The direct impacts are bad enough. Ranchers have to sell cows—suppressing prices—and calves come off early and small, reducing their gross value. But the indirect costs of high-priced hay, supplements and corn are just as bad.

2. Demand. Beef demand has been resilient despite high prices, but the economy—in the U.S. and the world—is in a precarious state. Most of the developed countries have been borrowing from the future, and if they get serious about tightening their belts, we could be in for more recession. With it would come lower demand for all foods, especially beef.

3. Competing meats. The bland meats—pork and poultry—have had a harder time than beef in passing along the added costs from the corn market. Producers have begun scaling back output, but consumers have seen their relative costs for broiler parts and pork chops increase less than beef. As production is reduced, they should lose some of their bargain appeal. USDA-ERS retail meat price chart.

4. Carcass size. For years, one could assume that higher corn prices meant smaller carcasses. But as feeders and packers have struggled to keep their volume and tonnage up, they’ve opted to make cattle bigger. Will this trend continue—especially if corn gets cheaper, making extra pounds more affordable?

5. The dollar. The dollar has its own volatility-risk factor, and foreign customers—who buy offal as well as an increasing percentage of beef—figure their prices on their own currency. The dollar’s strength combined with overseas recession hurt export demand this year, but much depends on how Washington decides to deal with the ongoing budget challenge.

Keep on Holding on

With cattle numbers at historic lows, the difference between dry and not-so-dry will be huge. Timely rains in cow country would likely to tempt some to rebuild herds, further reducing the already tight supply of beef. Presumably, such rains would also weaken the feed markets—reducing costs for wintering cows and offering feedlots some breathing room on corn prices.

You don’t always have the option, but holding calves longer typically pays more. Feed conversions and costs vary, but estimates by the Michigan State University Beef Team in the bulletin “What Can I Afford to Pay for Feeder Cattle during 2012–2013?”, give an idea of how complicated the outlook is. Assuming a $1.20 fed cattle price and $7.50 for corn, your buyer could afford to pay you $792 for […]

Issued by Darrel Good, University of Illinois

The USDA’s November forecasts of the size of the 2012 U.S. corn and soybean crops were larger than expected, particularly for soybeans. As a result, the general downtrend in soybean prices since mid-September has accelerated, with January futures now at the lowest level since June 29.

Corn prices have moved into the lower half of the trading range that has been in place since mid-September and December futures are at the lowest level since September 28. So far, prices seem to be following the classic pattern associated with small crops -peaking early in the marketing year and then declining as the year progresses.

The futures market reflects expectations that prices will continue to decline, especially into the 2013-14 marketing year. The expected rebound in South American soybean production, Argentine corn production, and U.S. corn and soybean production in 2013 all contribute to the expectation of lower prices. If those crops are as large as generally expected, prices will be even lower than currently reflected in the futures market.

The USDA is forecasting record South American production of both crops. If planted acreage of corn in the U.S. in 2013 is at the same level as in 2012 and the U.S. average yield is near a trend value of 162.5 bushels, the crop would total 14.6 billion bushels, about 1.5 billion larger than the record crop and record consumption of the 2009-10 marketing year.

Similarly if soybean acreage is maintained at the 2012 level and the average yield is near the trend value of 43.8 bushels, the 2013 crop would reach 3.34 billion bushels, near the record levels of 2009 and 2010. A combination of record, or near record South American and U.S. crops in 2013 would likely push prices down to or below the long term averages of about $4.75 for corn and $11.00 for soybeans.

While the expectation for lower corn and soybean prices in 2013 is reasonable based on historical patterns and prospects for large crops, the timing and speed of the return to more “normal” prices will be influenced by a large number of factors. The final estimate of the size of the 2012 crops to be released on January 11, 2013 is one of those factors.

For soybeans, the pattern of 2012 yield forecasts to date, lower in September and higher in October and again in November, was experienced six other times in the previous 30 years. The yield estimate released in January following harvest in those six years was above the November forecast three times and below the forecast three times. The deviation ranged from 0.1 to 0.8 bushels. History does not provide much guidance for forming expectations this year.

For corn, the pattern of yield forecasts this year, lower in September and October and higher in November was experienced only two other times. The January yield estimate equaled the November forecast in one of those years and exceeded the November forecast by 0.7 bushels in the other. Again, history provides […]