Cattle Current Daily—Aug. 2, 2019

Cattle Current Daily—Aug. 2, 2019

Negotiated cash fed cattle sales were mostly inactive on light to moderate demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. So far this week, live sales are $1 lower in the Southern Plains at $111/cwt. Dressed trade in the North is steady at $185. Live sales in the western Corn Belt are steady at $115-$116.

Live Cattle futures closed higher Thursday, despite continued hard pressure on Lean Hogs.

Except for 20¢ lower in the back two contracts, Live Cattle futures closed an average of 52¢ higher (7¢ higher to $1.07 higher).

Feeder Cattle futures continued to sink lower, though, closing an average of 62¢ lower.

Wholesale beef values were higher on Choice and weak on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 70¢ higher Thursday afternoon at $214.24/cwt. Select was 35¢ lower at $189.34.

Grain futures continued under pressure on Thursday with the continued stalemate between the U.S. and China, favorable crop weather and reports of bumper production in parts of Europe and South America.

Corn futures closed 5¢ to 7¢ lower through Jul ’20 and then fractionally mixed to 3¢ lower.

Soybean futures closed 15¢ to 17¢ lower through Sep ’20 and then 9¢ to 12¢ lower.

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Major U.S. financial indices closed sharply lower again Thursday on tweets from President Trump that the U.S. will impose a 10% tariff on an additional $300 billion worth of Chinese imports, beginning Sept. 1. Until then, markets rebounded sharply higher after the previous session’s steep decline.

West Texas Intermediate Crude oil futures on the CME tumbled $4.55 to $4.63 for the remaining 2019 contracts.

The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 26 points lower. The NASDAQ was down 64 points.

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Participating in Beef Quality Assurance (BQA) programs yields a variety of benefits, everything from records that enable improved decision making to proven animal health practices and monitoring that help ensure animal well being. Never mind the verification of quality, safe production it provides consumers.

Recent research also indicates buyers are willing to pay more for calves and feeders at video auction if those cattle come from BQA-certified producers.

Bottom line, buyers paid an average premium of $16.80 per head for cattle in lots with BQA included in the lot description. That’s based on 8,815 video lot records of steers and heifers sold in nine western states through Western Video Market from 2010 to 2017.

The study—Effect of Mentioning BQA in Lot Descriptions of Beef Calves and Feeder Cattle Sold Through Video-based Auctions on Sale Price—was conducted by Colorado State University’s departments of Animal Sciences and Agricultural and Resource Economics.

“This study was a first of its kind opportunity to utilize advanced data analysis methods to discover if there was a true monetary value to participate in BQA,” says Chase DeCoite, director of Beef Quality Assurance. “Study results clearly show that participation in BQA and BQA certification can provide real value to beef producers. It means that the initiatives within the industry are rewarding cattlemen and women who take action to improve their operations and our industry.”

CSU’s statistical analysis determined a $2.71/cwt. premium when BQA was mentioned in the lot description. That premium is relative to the average weight of cattle in the study, which is how researchers arrived at the premium of $16.80 per head. If you figure the per-head premium is constant, it implies higher weight-based premiums at lighter weights and vice versa, according to researchers. For instance, $3.73/cwt. at 450 lbs. versus $2.24 at 750 lbs.

“In addition to the BQA mention, our study controlled for other factors–such as lot characteristics, cattle attributes, and value-added practices like age/source verification and natural certification–that also influenced beef calf and feeder cattle sale prices. Importantly, the BQA premium existed even after accounting for these influential variables,” says Daniel Mooney, CSU assistant professor of agricultural and resource economics.

Mooney adds that results of the study emphasize the importance of transferring information from sellers to buyers, as well as the importance of collecting BQA certification information during the auction process.

“The value of a seller being BQA Certified can really only be captured when information is shared between seller and buyer, which is consistently done via the sale of cattle by video auction companies,” explains Jason Ahola, CSU professor of animal sciences. “By sharing the BQA status of the owner or manager of a set of cattle, the buyer can access information that is generally otherwise difficult to find in traditional marketing channels. This was a big reason for us to conduct the study, as it became clear that data on sellers’ BQA status were available on a large number of cattle sold through video auctions as well as other traits associated with the cattle. This information affected the ultimate selling price of the cattle.”

Even without documentation of a premium in the past, the results also suggest that over time many producers have proactively chosen to highlight and emphasize their participation in BQA when marketing their cattle.

2019-08-01T18:01:19-05:00

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This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

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This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.