CALF_News_April_May_2019

17 CALF News • April | May 2019 • www.calfnews.net We buy DNA verified calves. It all began when a French cattleman bought a farm in Georgia... ® For more information visit: FPLFOOD.COM FPL Food is the Southeast’s one-of-a-kind source for sustainable beef. Privately owned and operated, this producer and processor pairs French provincial farming traditions with a dedication to providing quality beef. Expanding our Akaushi Beef Program We buy DNA verified calves Call us today! 706.922.5528 Raised without any growth implants, ionophores or promotants Weaned and backgrounded for at least 45 days. We buy feeder calves as well as finished fed cattle help ease the total supply situation, with yield to be a more important determining factor than increased acreage in 2019. Good news for corn farmers lies in the record amount of feed and residue use due to the record numbers of livestock that will be produced in the U.S. this year. Also in favor of higher corn prices is our economic growth and expected continuation of drought in South America. Bad news is on the ethanol front, where the decreased value of energy puts pres- sure on margins. Hay prices are expected to soften as the U.S. crop will likely expe- rience favorable weather in 2019. Average price per ton is predicted to decrease from $157 to $145/ ton. Supply, demand and price outlook It is important for us to remember that cattle numbers in 2019 are up 6.5 million head from five years ago. They’ve rebounded due to profitability and good grazing conditions. These factors can change quickly, along with other external problems, making market volatility an ever-present challenge. CattleFax reminds us that although there is an optimistic outlook for the coming year, realistically, things have been good for too long. Contraction in the dairy industry added an additional 30,000-40,000 head to cow harvest numbers in 2018, which hit an increase of 400,000 total head. Additional dairy herd disbursement will continue to challenge cull beef cow prices. In addition, fed steer and heifer numbers will increase by 1 percent. We have pulled through the wettest winter since 1984, which is as long as records have been kept in cattle feeding areas. This is a“weather market environ- ment.” Placements in feedlots will be disrupted this year on account of bad lot conditions. Supplies of feeders are tight now, but will become larger into the fall; this will lead to lower yearling prices late in the year. Winter weather has also affected carcass weights, and will account for a 15,000-pound drop per week, through 2019. The damage is done, and will be the equivalent of 250,000 head of cattle. Still, with these losses, there will be a half-billion pounds more beef on the market in 2019. Trade is our savior. Exports are expected to continue to rise 6 percent in 2019. A staggering 22 percent of U.S. beef value is accredited to our export market, adding $360 to each head of fed cattle. U.S. population growth of .7 per- cent per year is also beneficial in product consumption. Additionally, per capita Continued on page 19  CattleFax CEO Randy Blach notes the longterm cattle cycle suggests that risk remains into the early 2020s, even with beef cowherd expansion mostly complete.