In rare early-week trade late in the day on Monday, cash fed cattle prices softened Live prices were $1-$2 lower than last week at $120/cwt. in the Southern Plains and Colorado. Follow-through buying yesterday in Nebraska and the western Corn Belt was $2-$3 lower at the same $120 on a live basis. Dressed trade was $1-$3 lower at mostly $192.
Following early follow-through selling, Cattle futures found a foothold on Tuesday.
Live Cattle futures closed an average of 38¢ higher.
Other than 97¢ lower in spot Jan, Feeder Cattle futures closed an average of 79¢ higher (57¢ to $1.72 higher).
Choice boxed beef cutout value was 29¢ higher on Tuesday afternoon at $210.49/cwt. Select was 32¢ higher at $203.69.
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Major U.S. financial indices closed at record-high levels on Tuesday. Expectations for strong fourth-quarter earnings—reports begin this week—were widely attributed to the bullishness.
The Dow Jones Industrial Average closed 103 points higher. The S&P 500 closed 3 points higher. The NASDAQ closed 6 points higher.
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Producers need to use both technical and economic measures to monitor and their operations for maximum economic returns, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
While technical measure like calving percentage and pounds of weaned calf per cow exposed are useful to monitor and manage production systems, Peel explains such measures tend to emphasize maximums (such as weaning weights) or minimums (such as death loss). And, often times, maximums and minimums are not optimal in terms of economic outcome.”
That’s where economic efficiency measures come in.
“For example, Peel explains, dollars of return per cow will reign in excessive focus on weaning weights by recognizing that some means of increasing weaning weights, such as increasing cow size, may be very expensive and not efficient at some point.
Likewise, Peel says, with land investment the biggest component for many cow-calf operations, the final assessment of economic efficiency is returns per acre. This incorporates physical animal components related to reproductive, nutritional, and health productivity along with feed and forage management plus output values and input costs.”
Considered alone, though, measures of economic efficiency have limitations as well.
“Economic efficiency measures focus on optimal use of inputs relative to the value of outputs. However, changes in output values or input costs can lead, for example, to improved returns due solely to changing market conditions while masking stagnant or even declining physical productivity,” Peel explains.