Al6—Lancaster Farming, Saturday, September 19,1981
Feeder
WASHINGTON, D.C. -
Although cattle feeders can expect
some improvement in feeding
margins this fall, the key word is
caution. The uncertain outlook for
interest rates, consumer demand
for meat, cattle prices, and feed
costs will require careful planning
in making management decisions
this fall.
Economic Uncertainites Abound
A key unknown right now is the
economy and its effect on con
sumer demand for beef. The
economy has begun to slow again,
returning to the stagnation that’s
kept consumer incomes little
changed—despite high inflation—
since 1979. Inflation has been
easing lately, but real incomes (in
1972 dollars) may increase only
marginally through next summer.
The income tax cut beginning
October 1 will bolster consumers’
disposable incomes. But its effect
on meat demand will depend on
how much of the additional income
consumers save and how much
they spend...and how much of the
spending goes for food.
Overall, don’t look for much help
soon. Next summer’s larger cut
will likely be more beneficial for
livestock producers, especially if
the-economy has begun to perk up
by then as anticipated, according
to USDA’s Economic Research
Service.
The interest rate outlook is even
less certain. Rates continue at
near record levels, and they’re
expected to remain high through
yearend.
Brighter Prospects for Feed and
Forage
Forecasts indicate the second
largest U.S. com crop in history
and perhaps only moderate growth
in export demand. Therefore, com
prices over the coming year could
fall to an average of $2.70 to $3.15 a
bushel, compared with this year’s
estimated $3.15.
A larger soybean crop is also in
the works, pointing to soybean
meal prices of $lBO to $2lO a ton in
the coming season, down from this
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Your Service Problems
HOOVER
DIESEL SERVICE
PH: 717-656-6133
2998 West Newport Rd.
RonKs, PA 17572
cattle prices to rise
year’s average of $220. These
lower prices may help return
cattle feeders to a breakeven
situation later this fall, if feedlot
placements or feeder cattle prices
don’t rise too much in late summer
and fall.
Most areas report favorable
forage and pasture conditions.
Recent goocSrains in small-grain
grazing areas and accumulated
pasture may bolster stocker
demand and hold the line on culling
rates.
Competing Meats:
Less Pork, More Poultry
Pork producers cut output
substantially in the past year.
Although last winter’s production
was only 1 percent below the large
level of the previous year, spring
output declined 10 percent. For the
second half of 1981, pork produc
tion will remain 7 to 9 percent
below last year’s levels.
In contrast, broiler supplies are
large and increasing. Second-half
output may rise 6 to 8 percent from
last year’s heat-stressed levels.
And with beef supplies likely to
remain plentiful, total red meat
and poultry supplies will be large—
especially considering the sluggish
economy and resulting weak
demand for beef.
Smaller Feedlot Inventory
Positive for Fall Prices
Cattle on feed on July 1 num
bered 1 percent below a year ago,
the least for this date since 1975.
The fewest calves on feed since
1964 accounted for all of this
decline. Cattle in the heaviest
weight groups, those normally
marketed during the summer
quarter, were up sharply
reflecting increased placements of
heavier cattle this spring.
With pork production down and
feedlot marketings current,* the
larger number of cattle ready for
slaughter shouldn’t cause too
much concern. Marketings were
good in July and August, and
dressed weights for steer car
casses in mid-July were down 30
pounds from last winter, when
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SEE YOUR LOCAL WESTFALIA-SYSTEMAT SALES CENTER
Tm STATE AIfTOMATKM, IHC. ROBOT L. JANNEY
RD 9, Box 338. White Hall Rd RDI
Hagerstown, Md 21740 Coehranville, Pa 19330
301-790-349* 21S-593-236S
CUMBERLAND FARM
A DAIRY SUPPLY, INC.
4560 Daily Road
Chambersburg, Pa 17201
717-2634828
LONGENECKER.INC.
RD2
Williamsburg. Pa 16693
814-793-3731
overweight cattle depressed the
market.
It’s important that fed cattle
marketings remain current.
Otherwise, weights could . rise
enough to make the increase in
slaughter numbers burdensome.
If cattle feeders keep
marketings current, the situation
should change by the fourth
quarter. Smaller feedlot
placements in June, July, and
August suggest a decline in fourth
quarter fed cattle marketings,
which could help strengthen
prices. Nevertheless, margins for
most feeders will likely stay
negative until late fall; even then,
only moderate improvements are
anticipated.
Feeding Margin Outlook Fair at
Best
Your feeding costs are now
almost certain to decline.
However, interest rates and other
production costs remain high. So,
with only modest price gains
projected for fed cattle, feeding
margins won’t improve much. In
addition, feeder cattle prices may
rise this fall, which could absorb
much of the cost savings feeders
would otherwise get.
On July 1, the number of feeder
cattle outside feedlots was 1
percent above a year ago. Calf
supplies were up 2 percent,
yearling supplies down 3 percent.
Improved grazing prospects for
the fall and winter may boost
stocker cattle demand, which, with
the somewhat tighter supply, could
lift feeder cattle prices.
Each 25-cent drop in the price of
a bushel of com reduces the cost of
producing 100 pounds of fed beef by
about $l. The same price decline
for com means you could pay $2
per cwt. more for feeder cattle and
still break even. These breakeven
levels will vary from feedlot to
feedlot, but they should help as a
guide for your actual situation.
The Key Word: Caution
Most of the factors that have
kept prices from advancing this
year still apply, and cattle feeders
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BYLER’S DIESEL A
REFRIGERATION SERVICE
Star Route 655
Belleville. Pa. 17004
PENN VALLEY CROPSTORE
ROI. Box 75
Schwenksville, Pa 19437
215-287-9650
VNTRODUCIN
THOMAS DUNLAP
RO I
Jersey Shore. PA 17740
717-398-139 L
TED HIRSCH COMMERCIAL A
FARM REFRIGERATION SERVICE
RDI. Box 44
Montrose. Pa 18801
717-278-3607
GRAHAM’S DAIRY SUPPLY
RD3, Rte 66 North
Greensburg. Pa 15601
412-834-3164
in coming months
have virtually no control over
them. Some things you can control,
however—for example,, keeping
your marketings current.
Heavy slaughter weights last
winter drove down cattle prices. At
this point, the industry can’t afford
the additional production resulting
from heavier animals, and feeders
can't afford the higher feeding
BREAKEVEN FEEDER STEER PRICES 1
IN THE CORN BELT ...
Corn price,
$ per bu.
2.50.
2.75.
3.00.
3.25.
3.50.
3.75.
4.00.
... AND IN THE HIGH PLAINS
2.50.
2.75.
3.00.
3.25.
3.50.
3.75.
4.00.
1 Feeder steer prices consistent with breakeven, given farm
corn prices and prices for 600-lb. medium frame No, J {Choice)
feeder steers and 1,050-lb. Choice fed steers. Assumes all other
costs at June 1981 levels. '
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CLYDE C. LUTZ
1316 Apple Street
Ephrata, Pa. 17522
717-735-1711
SANER FARM SYSTEMS
RD 2,80x41
McAlisterville. Pa 17049
717-453-260 S
HICKORY FEED MILL, INC.
Box 157
Hickory. Pa. 15340
412*355.2205
Choice fed steers, $ per cwt.
60 65 70 75
Feeder steers, $ per cwt.
53.41 62.16
51.54 60.29
49.66 58.41
47.79 56.54
45.91 54.66
44.04 52.79
42.16 50.91
44.66
42.79
40.91
39.04
37.16
35.29
33.41
40.32 49.12
38.15 46.95
35.97 44.77
33,79 42.60
31.62 40.42
29.44 38.24
27.27 36.07
57.92
55.75
53.57
51.40
49.22
47.04
44.87
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Bucket
• Baffled inlet and outlet prevents milk carry
over
• Quick seal for immediate milking action with
minimum vacuum loss
• Easy to handle & Easy to clean
D AIRYLAND SUES ISEN.
RO 3, BoxlS
Troy. Pa. 16947
717-297-4128
BRENNER DAIRY EQUIPMENT 1.8, ZIMMERMAN I SONS
“U 46 . pa u> M i
’ *** 16434 Blue Ba,l> Pa - 17507
814-654-7309 717-354-4955
WESTFALIA
systemat
costs - and typically large price
discounts that heavy cattle carry.
At best, look for only moderate
gains-in fed cattle prices this fall.
Even then,'improved demand for
feeder cattle could wipe out any
improvement in feeding 1 margins
resulting from higher fed cattle
prices or lower feed costs.
79.66
77.79
75.91
74.04
72.16
70.29
68.41
70.91
69.04
67.16
65.29
63.41
61.54
59.66
66.72
64.56
62.37
60.20
58.02
55.84
53.67
75.52
73.35
71.17
69.00
66.82
64.64
62.47
■ if*
3 1 1 * '%
v jgfrcarfy
MARYLAND CO-OP MILK
PRODUCERS ASSN.
600 Liberty Road
SykesviHe. Md. 21784
301-795-2727
88.41
86.54
84.66
82.79
80.91
79.04
77.16
04.32
82.15
79.97
77.80
75.62
73.44
71.27