Are we on the cusp of seeing some major shifts in buying behavior for feeder cattle?

Nevil Speer

October 3, 2013

2 Min Read
Industry At A Glance: What Do Stocker Pay-Weight Trends Portend?

The 2008 National Stocker Survey (sponsored by Elanco Animal Health, Kansas State University and BEEF magazine) provides a comprehensive appraisal of the U.S. stocker industry. That data allows for some interesting insight into major trends and strategies of respondents. It’s a snapshot that’s important both in developing a background for and an assessment of the beef industry in general going forward.

With that in mind, one of the key aspects within the data revolves around pay-weight trends – namely, the difference between arriving and departing weights. That data itself isn’t surprising: most operations receive cattle between 400- 600 lbs., and ship cattle out at 700-900 lbs.

But now consider those trends within the context of the past three monthly Cattle on Feed reports. Despite declining corn prices, cumulative feedyard arrivals during June, July and August total about 5.1 million head, vs. nearly 5.6 million head in 2012 (a 9% decline).

stocker pay-weight trend cattle prices

Many factors are contributing to that slowdown, including fewer available cattle and better grass conditions in 2013. Perhaps, though, it might represent the start of a shift in buying behavior at the feedyard level. Most notably, feedyards are increasingly managing their capital very carefully following a prolonged run of negative closeouts.

Historically, given the current improvement in the crush (deferred fed cattle less cost of feeder cattle and corn), cattle feeders would have chased replacements. That’s not occurred during the past several months in 2013.

If that trend continues, there’ll be some important implications on placement weights and stocker strategies in the future. Are we on the cusp of seeing some major shifts in buying behavior? Will the departing pay-weight percentage shift to the right among stocker operations? How do you see all this playing out? Leave your thoughts below.

 

You might also like:

Calf Prices Rally

80+ Photos Of Our Favorite Calves & Cowboys

Cow-Calf Production Is Largely A Part-Time Business

Readers Show The Love For Their Ranch Sweethearts

Use Of Sexed Semen In Dairy Cows Could Help Beef Calf Numbers

About the Author(s)

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
 
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
 
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
 
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

Subscribe to Our Newsletters
BEEF Magazine is the source for beef production, management and market news.

You May Also Like