While it was a bit wetter, 2013 continued the dry trend established over the last two years. Unseasonable summer rains provided some respite from crippling drought in the South Plains and New Mexico, but we started 2014 very dry and subsoil moisture was non-existent.

The promise for winter wheat pasture withered away with a dry fall and start to winter. Cow liquidation has slowed and some herd rebuilding may be occurring in limited cases, but replacement costs have skyrocketed and the economics of herd rebuilding may be questionable.

Feedlot occupancy is mixed, with some yards at or above capacity but others below 50 %. Several well-established feedlots that had operated for decades in this region have closed.

Feed costs have moderated about 25% below year-ago levels, but prices for feeder cattle are high, leaving breakeven projections discouraging at best. Ground cornstalks, wheat straw and other low-quality roughages continue to displace most alfalfa hay in all but starter rations in the Southern Plains. Byproduct feeds continue to be used extensively to replace high-basis corn in feedlot rations. Recent export demand for dry corn byproducts has priced those ingredients out of some rations.

This area’s biggest news was the February 2013 closure of the Cargill facility in Plainview, TX, along with Merck’s removal from the market of the beta-agonist Zilmax in August. The Plainview closure ultimately resulted in very thin trade in the cash market as fed cattle availability has exceeded packer capacity – a very troubling development and the implications are not yet fully known.

Regardless of personal bias, the removal of Zilmax from the market is a chilling precedent for any new product development efforts aimed at improving production efficiency in beef animals.


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