Hay production in 2013 reflected the improvement in drought conditions in the last half of the year. In the recently released USDA Crop Production 2013 Summary, all hay production was up 13.4 percent over record low production totals in 2012.
Times have been tough in the heart of classic cowboy country these past few years. The Southwest has seen some of the worst drought it’s experienced in ages in 2011-2013. Drought and its accompanying friend, fire, has taken a toll on ag real estate and pasture values.
Last week the cash fed market continued to ride the rising tide of record prices. Though the bulk of sales were pushed off until Friday, the scattered small volume sells to regional packers were nothing if not a reprisal of the prior week’s tune, though at a slightly higher pitch.
There are a multitude of factors impacting the shipping market. Major factors include strong growth for several of the major commodity segments, with the growth in Bakken oil and crop shipments being the most notable. There is a persistently strong demand for containers in other logistical market segments.
“While corn prices at South Dakota ethanol plants have dropped $1.50 per bushel since Aug. 2, dried distillers grains plus solubles (DDGS) prices have actually increased by $1.05 per ton,” said Darrell Mark, Adjunct Professor of Economics at South Dakota State University.
Cash fed trade last week was riding the strong price tailwind from the prior week. On Friday, Dec. 27, cash cattle prices increased sharply with cattle selling $3-4 higher for live at $133-136 and $3-6 higher with $210-215—mostly $212-214—for dressed.
The cash fed trade was choppy last week, given the Christmas holiday being smack dab in the middle of the trading week. Analysts expected cattle to sell steady to $1-2 higher than the prior week’s $129-130 live and $205-209 dressed in late-week trade.
In what has been called “moderately bullish,” the most recent Cattle on Feed report showed on-feed, placements, and marketing numbers below industry expectations. The decline in placements of cattle into feedlots with a 1,000-head-or-greater capacity was especially surprising and friendly to the markets.
The Rabobank Global Cattle Price Index has risen 6 percent since June, driven by lower-than-expected beef supply in the main exporting countries and strong Asian demand, according to a new report from the Rabobank Food & Agribusiness (FAR) Research and Advisory group.