October 26, 2018 Tennessee Market Highlights Number: 43

FED CATTLE: Fed cattle traded $3 to $4 higher compared to last week on a live ba-sis. Prices on a live basis were mainly $114 to $115 while prices on a dressed basis were mainly $180. The 5-area weighted average prices thru Thursday were $111.25 live, up $1.29 from last week and $175.06 dressed, up $1.17 from a week ago. A year ago prices were $110.53 live and $175.00 dressed. The finished cattle market finally broke out of its six week stagnation, but it is yet to be determined if this is a violent surge or a moderate price increase as mentioned last week. If the market has follow through next week with strong gains then a violent surge it is. However, market participants have been waiting on this positive price move-ment in the finished cattle market for sev-eral weeks, and it is adding $40 to $50 of value to each head. The increase in prices can only be positive for cattle feeders while packers are no worse off with stronger beef prices. The market will wait in angst to see if this week’s higher prices can be sustained and improved upon moving into November. BEEF CUTOUT: At midday Friday, the Choice cutout was $213.72 up $0.62 from Thursday and up $5.50 from last Friday. The Select cutout was $199.33 up $1.02 from Thursday and up $5.47 from last Friday. The Choice Select spread was $14.39 compared to $14.36 a week ago. The Choice boxed beef cutout price has increased more than $10 in two weeks. The price surge the back half of October is being driven by middle meats. Middle meat pur-chases in October are generally due to enti-ties preparing for the holiday season and trying to purchase inventory before rib and loin prices reach their apex. Thus, restau-rants and retailers are trying to avoid being short bought and forced in to high priced spot market purchases. At the same time, this purchasing habit generally leads to

increases of beef in cold storage which gen-erally peaks in the fourth quarter. Based on the latest cold storage report, beef in cold storage at the end of September totaled more than 508 million pounds, 12 million more pounds than one year ago and 55 million more pounds than the five year av-erage (2012-2016). Pork in cold storage at the end of September was nearly 589 mil-lion pounds which is below year ago levels and the five year average. Chicken in cold storage remains elevated and sits at 959 million pounds as of the end of September. OUTLOOK: Based on Tennessee weekly auction market averages, steer prices were $1 lower compared to last week while heif-er prices were $2 to $4 lower compared to a week ago. Similarly, slaughter cow prices were steady to $1 lower while slaughter bull prices were $1 to $2 lower than last week’s prices. The minds and thoughts of many cattle producers are focused on calf and feeder cattle prices through the end of the year and maybe into January. However, it is not too early to be thinking about sum-mer feeder cattle marketings for 2019 and capitalizing on a strong price. It may be difficult to forward contract feeder cattle for the third quarter of 2019, but the fu-tures market can be used to protect a strong price. The August 2019 feeder cattle contract peaked on October 2nd at $157 per hundredweight and is currently trading a little over $152. With the nearby Novem-ber contract trading near $154, some peo-ple may be skeptical of pricing cattle for a lower price ten months down the road es-pecially if they expect prices to increase. However, if one looks back to the August 2018 contract, the 2018 contract traded in a range of $136 to $159 over the entire year. Additionally, the range for the August 2018 contract from June through expiration was $143 to $155 with an average daily close just shy of $150 per hundredweight. With that understanding, a price of $152 for August 2019 would seem fairly strong.

(Continued on page 2)

Livestock Comments by Dr. Andrew P. Griffith Trends for the Week Compared to a Week Ago

Slaughter Cows

Steady to $1 lower

Slaughter Bulls

$1 to $2 lower

Feeder Steers

$1 lower

Feeder Heifers

$2 to $4 lower

Feeder Cattle Index

Wednesday’s index: 153.65

Fed Cattle

The 5-area live price of $111.25 was up $1.29. The dressed price of $175.06 was up $1.17.

Corn

December closed at $3.67 a bush-el, unchanged since last Friday.

Soybeans

November closed at $8.45 a bush-el, down 11 cents since last Friday.

Wheat

December closed at $5.05 a bush-el, down 9 cents since last Friday.

Cotton

December closed at 78.53 cents per lb, up 0.61 cents since last Fri-day.

2

One could easily purchase a put option or sell a futures contract today and likely come out on the positive side, because prices are likely to fluctuate above and below the current price be-tween now and expiration. In making this move, one does not have to hold their position until expiration. If prices move lower and the producer thinks the market price will go back up then they can simply exit their position on the futures market and pocket the gains which will then leave the producer completely subject to the cash market but with cash in hand. ASK ANDREW, TN THINK TANK: In the past few weeks, several questions concerning cover crops and sod drilling winter annu-als have surfaced. There are several crop producers who graze cover crops while there are even more cattle producers that graze sod drilled winter annuals. Both of these grazing alterna-tives can be advantageous if planted early, adequate moisture is received, and fertilizer application occurs. Grazing of winter annuals can be a great alternative to feeding hay, and it is often less expensive than feeding hay. Though winter annuals can still be planted, the overall benefit of grazing will likely be less than for those planted in September. Producers considering grazing winter annuals should consider yield potential, plant maturity, potential stocking rate, need for termination, and cost. It may even be beneficial to determine the daily cost of feeding an animal with a winter annual versus hay. Back of the feed sack math says winter annuals cost about half as much as hay. Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996. FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –October $113.88 +0.53; December $118.40 +1.33; February $123.45 +1.23 Feeder cattle –November $154.80 +0.85; January $149.70 +0.65; March $147.83 +0.33; April $149.33 +0.40; December corn closed at $3.68 up $0.07 from Thursday.

(Continued from page 1)

Livestock Comments by Dr. Andrew Griffith

Thursday, October 25, 2018

Month Class III Close Class IV Close

Oct 15.53 14.98

Nov 15.11 14.87

Dec 15.23 14.79

Jan 15.14 14.74

Feb 15.26 14.82

Milk Futures

Cattle Hogs

———— Number of head ————

This week (4 days) 118,750 475,750

Last week (4 days) 116,750 472,500

Year ago (4 days) 117,000 464,500

This week as percentage of

Week ago (%) 102% 101%

Year ago (%) 101% 102%

Average Daily Slaughter USDA Box Beef Cutout Value

Choice 1-3 600-900 lbs

Select 1-3 600-900 lbs

———————— $/cwt —-———————

Thursday 213.10 198.31

Last Week 206.82 192.35

Year ago 200.21 192.39

Change from week ago +6.28 +5.96

Change from year ago +12.89 +5.92

3

Crop Comments by Dr. Aaron Smith

Overview Corn and cotton were up, soybeans and wheat were down for the week.

Futures prices declined for the week as tepid weekly export sales numbers for corn and soybeans resulted in further concerns about dispersing this year’s large domestic crop. Soybean and wheat export commitments (outstanding

sales and accumulated exports) are well behind the pace to meet USDA projections. Currently, wheat export commitments are 45% of the USDA’s marketing year goal. This compares unfavorably to last year at 68% and the five year average of 64% for the same time period. Similarly, soybean export commitments are at 38% of USDA’s marketing year total, compared to 50% last year and a five year average of 57%. Chinese tariffs have obviously played a substantial role in reduced soybean export commitments. Howev-er, these are troubling numbers during harvest when export sales are typically at their highest. Reduced exports will increase do-mestic carry-over and further decrease cash prices.

Corn and cotton paint a slightly more favorable export picture. Corn export commitments are 34% of the USDA’s marketing year total, compared to 28% last year and a five year average of 34%. Cotton export commitments are 64% of the USDA’s marketing year total, compared to 55% last year and a five year average of 47%.

One of the reasons for relatively strong export commitments of cotton and corn, compared to soybeans and wheat, can be found by examining projected global ending stocks for the 2018/19 marketing year. Global cotton stocks are projected to be down for the fourth consecutive year (111.74 million bales in 2104/15 to 74.45 at the end of the 2018/19 marketing year). Global corn stocks are projected to be 1.5 billion bushels lower than last year, at 6.2 billion bushels, the second consecutive year-over-year decrease in global corn stocks.

On the other hand, global soybean stocks are projected up at 4.043 billion bushels, an all-time high and 1.194 billion bushels great-er than four years ago. Global wheat stocks are down from last year but are still at the second highest global stocks of all-time at 9.56 billion bushels. Access to foreign markets is essential to agriculture in the U.S. and working out trade issues with China would undoubtedly help improve prices, however it is important to realize that the under lying global supply and demand fundamentals will continue to dictate long term price direction.

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Memphis, North-west Barge Points, Northwest, Upper-middle, and Lower-middle Tennessee. Overall, basis for the week ranged from 28 under to 8 under the December futures contract with an average of 16 under at the end of the week. December 2018 corn futures closed at $3.67, unchanged since last Friday. For the week, December 2018 corn futures traded between $3.60 and $3.72. Corn net sales reported by exporters from October 12-18 were below expectations with net sales of 13.8 million bushels for the 2018/19 mar-keting year and 1.1 million bushels for the 2019/20 marketing year. Exports for the same time period were up 10% compared to last week at 47.8 million bushels. Corn export sales and commitments were 34% of the USDA estimated total annual exports for the 2018/19 marketing year (September 1 to August 31) compared to a 5-year average of 34%. Ethanol production for the week ending October 19 was 1.024 million barrels per day, up 13,000 from the previous week. Ethanol stocks were 23.897 million bar-rels, down 233,000 barrels. Dec/Mar and Dec/Dec future spreads were 13 and 35 cents, respectively.

The Crop Progress report estimated corn condition at 68% good-to-excellent and 12% poor-to-very poor; and corn harvested at 49% compared to 39% last week, 37% last year, and a 5-year average of 47%. In Tennessee, corn condition was estimated at 75%

(Continued on page 4)

4

Crop Comments by Dr. Aaron Smith

good-to-excellent and 4% poor-to-very poor; and corn harvested at 92% compared to 88% last week, 94% last year, and a 5-year average of 90%. In Tennessee, January 2019 corn cash forward contracts averaged $3.78 with a range of $3.59 to $3.98. March 2019 corn futures closed at $3.80, up 1 cent since last Friday. December 2019 corn futures closed at $4.02, up 2 cents since last Friday. Downside price protection could be obtained by purchasing a $4.10 December 2019 Put Option costing 30 cents establish-ing a $3.80 futures floor.

Soybeans

Average soybean basis strengthened or remained unchanged at Memphis, Northwest Barge Points, Northwest, Upper-middle, and Lower-middle Tennessee. Basis ranged from 76 under to 27 under the November futures contract at elevators and barge points. Average basis at the end of the week was 47 under the November futures contract. November 2018 soybean futures closed at $8.45, down 11 cents since last Friday. For the week, November 2018 soybean futures traded between $8.40 and $8.63. Net sales reported by exporters were below expectations with net sales of 7.8 million bushels for the 2018/19 marketing year and 0.04 mil-lion bushels for the 2019/20 marketing year. Exports for the same period were down 4% compared to last week at 40.8 million bushels. Soybean export sales and commitments were 37% of the USDA estimated total annual exports for the 2018/19 marketing year (September 1 to August 31), compared to a 5-year average of 57%. Nov/Dec 2018 soybean-to-corn price ratio was 2.3 at the end of the week.

Nov/Jan and Nov/Nov future spreads were 12 and 64 cents, respectively. The Crop Progress report estimated soybean condition at 66% good-to-excellent and 11% poor-to-very poor; and soybeans harvested at 53% compared to 38% last week, 67% last year, and a 5-year average of 69%. In Tennessee, soybean condition was estimated at 71% good-to-excellent and 7% poor-to-very poor; and soybeans harvested at 52% compared to 46% last week, 47% last year, and a 5-year average of 48%. In Tennessee, January 2019 soybean cash contracts average $8.39 with a range of $8.21 to $8.53. January 2019 soybean futures closed at $8.57, down 13 cents since last Friday. November 2019 soybean futures closed at $9.09, down 9 cents since last Friday. Downside price protection could be achieved by purchasing a $9.20 November 2019 Put Option which would cost 59 cents and set an $8.61 futures floor. Nov/Dec 2019 soybean-to-corn price ratio was 2.26 at the end of the week.

Cotton

Delta upland cotton spot price quotes for October 25 were 76.43 cents/lb (41-4-34) and 78.18 cents/lb (31-3-35). Adjusted World Price (AWP) increased 0.32 cents to 69.41 cents. Net sales reported by exporters were down from last week at 40,600 bales for the

(Continued on page 5)

5

Crop Comments by Dr. Aaron Smith

2018/19 marketing year and 4,600 for the 2019/20 marketing year. Exports for the same time period were 139,200 bales, up 3% from last week. Upland cotton export sales were 64% of the USDA estimated total annual exports for the 2018/19 marketing year (August 1 to July 31), compared to a 5-year average of 47%.

The Crop Progress report estimated cotton condition at 34% good-to-excellent and 33% poor-to-very poor; cotton opening bolls at 88% compared to 85% last week, 86% last year, and a 5-year average of 89%; and cotton harvested at 39% compared to 32% last week, 36% last year, and a 5-year average of 33%. In Tennessee, cotton condition was estimated at 69% good-to-excellent and 8% poor-to-very poor; cotton bolls opening at 99% compared to 98% last week, 100% last year, and a 5-year average of 92%; and cotton harvested at 60% compared to 50% last week, 54% last year, and a 5-year average of 35%. December 2018 cotton futures closed at 78.53, up 0.61 cents since last Friday. For the week, December 2018 cotton futures traded between 76.14 and 80.14 cents. Dec/Mar and Dec/Dec cotton futures spreads were 1.29 cents and -1.2 cents, respectively. March 2019 cotton futures closed at 79.82, 0.46 cents since last Friday. December 2019 cotton futures closed at 77.33, up 0.65 cents since last Friday. Downside price protection could be obtained by purchasing a 78 cent December 2019 Put Option costing 5.02 cents establishing a 72.98 cent fu-tures floor.

Wheat

Wheat net sales reported by exporters were within expectations with net sales of 16.3 million bushels for the 2018/19 marketing year and 0.2 million bushels for the 2019/20 marketing year. Exports for the week were down 19% compared to last week at 14.7 million bushels. Wheat export sales were 45% of the USDA estimated total annual exports for the 2018/19 marketing year (June 1 to May 31), compared to a 5-year average of 64%. The Crop Progress report estimated winter wheat planted at 72% compared to 65% last week, 73% last year, and a 5-year average of 77%; and winter wheat emerged at 53% compared to 44% last week, 50% last year, and a 5-year average of 55%. In Tennessee, winter wheat condition was estimated 61% good-to-excellent and 8% poor-to-very poor; winter wheat planted at 36% compared to 28% last week, 39% last year, and a 5-year average of 34%; and winter wheat emerged at 20% compared to 14% last week, 13% last year, and a 5-year average of 12%.

December 2018 wheat futures closed at $5.05, down 9 cents since last Friday. December 2018 wheat futures traded between $4.96 and $5.14 this week. December wheat-to-corn price ratio was 1.38. Dec/Mar and Dec/Jul future spreads were 19 cents and 38 cents, respectively. March 2019 wheat futures closed at $5.24, down 10 cents since last Friday. In Tennessee, June/July 2019 wheat cash contracts ranged from $5.09 to $5.59 for the week. July 2019 wheat futures closed at $5.43, down 9 cents since last Friday. Downside price protection could be obtained by purchasing a $5.50 July 2019 Put Option costing 39 cents establishing a $5.11 futures floor.

Additional Information: Links for data presented: U.S. Export Sales - https://apps.fas.usda.gov/export-sales/esrd1.html USDA FAS: Weekly Export Performance Indicator – https://apps.fas.usda.gov/esrquery/esrpi.aspx EIA: Weekly ethanol Plant Production - https://www.eia.gov/dnav/pet/pet_pnp_wprode_s1_w.htm EIA: Weekly Supply Estimates - https://www.eia.gov/dnav/pet/pet_sum_sndw_a_EPOOXE_sae_mbbl_w.htm Upland Cotton Reports - https://www.fsa.usda.gov/FSA/epasReports?area=home&subject=ecpa&topic=fta-uc Tennessee Crop Progress - https://www.nass.usda.gov/Statistics_by_State/Tennessee/Publications/Crop_Progress_&_Condition/ U.S. Crop Progress - http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1048 USDA AMS: Market News - https://www.ams.usda.gov/market-news/search-market-news

If you would like further information or clarification on topics discussed in the crop comments section or would like to be added to our free email list please contact me at aaron.smith@utk.edu.

6

Friday, October 19, 2018 — Thursday, October 25, 2018

Commodity Contract Month Friday Monday Tuesday Wednesday Thursday

Soybeans Nov 8.56 8.58 8.57 8.50 8.41

($/bushel) Jan 8.70 8.72 8.71 8.63 8.54

Mar 8.83 8.85 8.84 8.76 8.68

May 8.97 8.99 8.98 8.90 8.82

Jul 9.07 9.10 9.09 9.02 8.93

Aug 9.11 9.14 9.13 9.07 8.98

Corn Dec 3.67 3.69 3.70 3.68 3.61

($/bushel) Mar 3.79 3.81 3.82 3.80 3.73

May 3.87 3.89 3.90 3.88 3.81

Jul 3.92 3.94 3.95 3.94 3.87

Sep 3.94 3.96 3.97 3.95 3.89

Dec 4.00 4.01 4.02 4.01 3.96

Wheat Dec 5.14 5.08 5.09 4.99 4.87

($/bushel) Mar 5.34 5.27 5.29 5.19 5.07

May 5.47 5.40 5.42 5.33 5.21

Jul 5.52 5.46 5.48 5.39 5.28

Sep 5.62 5.57 5.59 5.50 5.40

Soybean Meal Dec 313 312 310 306 304

($/ton) Jan 315 315 312 308 306

Mar 314 315 314 309 307

May 312 314 314 310 308

Jul 313 315 315 312 310

Aug 313 315 316 313 311

Cotton Dec 77.92 80.02 78.99 77.07 77.68

(¢/lb) Mar 79.36 81.45 80.70 78.87 78.96

May 80.45 82.39 81.69 80.13 80.14

Jul 81.23 82.97 82.31 81.01 81.04

Oct 78.17 79.60 79.11 78.15 78.40

Live Cattle Oct 112.25 112.80 112.77 113.27 113.35

($/cwt) Dec 116.77 118.07 117.15 118.35 117.07

Feb 121.15 122.47 121.92 122.77 122.22

Apr 122.17 123.40 122.67 123.50 122.97

Jun 114.52 115.65 115.07 115.65 114.97

Feeder Cattle Oct 154.65 155.65 155.07 154.62 153.97

($/cwt) Nov 154.10 156.92 155.87 155.92 153.95

Jan 148.75 151.72 150.85 151.35 149.05

Mar 147.05 149.47 148.90 149.02 147.50

Apr 148.27 150.20 149.67 150.12 148.92

May 148.77 150.45 149.87 150.60 149.50

Market Hogs Dec 51.60 53.17 54.52 57.52 56.77

($/cwt) Feb 59.02 60.30 61.42 64.42 64.55

Apr 65.72 66.15 67.62 70.02 70.22

May 71.67 72.00 73.80 75.80 75.97

Jun 77.95 78.42 79.77 82.25 82.20

Futures Settlement Prices: Crops & Livestock

7

Cattle Receipts: This week: 10,125 (10) Week ago: 8,053 (8) Year ago: 8,278 (9)

This Week Last Week Year Ago

Low High Weighted Average Weighted Average Weighted Average

—————————————————————— $/cwt ——————————————————————

Steers: Medium/Large Frame #1-2

300-400 lbs 133.00 182.00 161.25 149.89 162.16

400-500 lbs 133.00 175.50 154.46 152.01 149.75

500-600 lbs 129.00 162.00 144.87 145.86 144.41

600-700 lbs 122.50 149.00 137.97 138.38 139.33

700-800 lbs 115.00 143.00 129.15 131.97 132.27

Steers: Small Frame #1-2

300-400 lbs 137.00 152.50 142.41 138.14 140.76

400-500 lbs 100.00 135.00 125.62 132.13 132.36

500-600 lbs 120.50 126.50 123.44 120.50 ———

600-700 lbs 112.50 120.00 116.47 107.45 ———

Steers: Medium/Large Frame #2-3

300-400 lbs 120.00 170.00 144.62 139.45 145.49

400-500 lbs 119.00 158.00 141.21 137.08 135.98

500-600 lbs 119.00 146.00 132.44 133.39 128.35

600-700 lbs 111.00 134.00 124.13 125.56 125.07

700-800 lbs 100.00 120.00 109.46 ——— 116.68

Holstein Steers

300-400 lbs ——— ——— ——— ——— ———

500-600 lbs 69.00 81.00 76.95 68.62 ———

700-800 lbs ——— ——— ——— ——— ———

Slaughter Cows & Bulls

Breakers 75-80% 40.00 45.30 46.77 48.32 54.00

Boners 80-85% 46.76 46.25 53.39 37.00 55.00

Lean 85-90% 30.00 48.50 40.14 41.37 46.23

Bulls YG 1 60.00 81.00 69.54 71.23 75.25

Heifers: Medium/Large Frame #1-2

300-400 lbs 119.00 150.00 135.11 136.74 139.74

400-500 lbs 115.00 149.00 131.59 133.09 132.64

500-600 lbs 108.00 140.50 124.57 127.55 127.74

600-700 lbs 107.50 133.00 119.59 123.18 122.14

Heifers: Small Frame #1-2

300-400 lbs 110.00 126.00 118.28 120.13 124.98

400-500 lbs 112.50 120.00 116.86 105.94 118.73

500-600 lbs 102.50 115.00 107.34 106.37 114.30

600-700 lbs ——— ——— ——— ——— ———

Heifers: Medium/Large Frame #2-3

300-400 lbs 110.00 140.00 124.56 127.21 127.36

400-500 lbs 104.00 140.00 120.60 121.55 124.76

500-600 lbs 100.00 126.00 113.49 118.52 117.84

600-700 lbs 100.00 124.00 110.00 112.91 115.26

Prices on Tennessee Reported Livestock Auctions for the week ending October 26, 2018

8

Friday, October 19, 2018 — Thursday, October 25, 2018

Friday Monday Tuesday Wednesday Thursday

Low High Low High Low High Low High Low High

———————–——————————————— $/bushel ———————————————————–———

No. 2 Yellow Soybeans

Memphis 8.16-8.24 8.18-8.31 8.17-8.27 8.18-8.20 ———

N.W. B.P. 8.15-8.21 8.17-8.24 8.18-8.23 8.10-8.15 8.05-8.10

N.W. TN 7.81-7.92 7.83-7.94 7.82-7.89 7.75-7.88 7.71-7.77

Upper Md. 8.02-8.06 8.03-8.08 8.03-8.17 7.95-8.11 7.97-8.03

Lower Md. ——— ——— ——— ——— ———

Yellow Corn

Memphis 3.57-3.59 3.59-3.61 3.60-3.62 3.58-3.60 ———

N.W. B.P. 3.52-3.55 3.55-3.58 3.56-3.60 3.54-3.58 3.49-3.51

N.W. TN 3.47-3.57 3.49-3.60 3.50-3.60 3.48-3.58 3.41-3.51

Upper Md. 3.40-3.41 3.42-3.44 3.44-3.45 3.41-3.43 3.34-3.36

Lower Md. ——— ——— ——— ——— ———

Wheat

Memphis ——— ——— ——— ——— ———

Prices Paid to Farmers by Elevators

100

120

140

160

180

200

220

Tennessee 500-600 lbs. M-1 Steer Prices2017, 2018 and 5-year average

2012/2016 Avg 2017 2018

85

105

125

145

165

185

Tennessee 700-800 lbs. M-1 Steers Prices2017, 2018 and 5-year average

2012/2016 Avg 2017 2018

8595

105115125135145155

5-Area Finished Cattle Prices2017, 2018 and 5-year average

2012/2016 Av g 2017 2018

35455565758595

105

Tennessee Slaughter Cow PricesBreakers 75-80%

2017, 2018 and 5-year average

1.00 2017 2018

9

East Tennessee Livestock Center - October 24, 2018 1 load out of 120 Holstein steers; BQA certified producer; est. wt. 885 lbs.; 100% #1s; medium flesh; $90.00 Blue Grass Stockyards - October 23, 2018 2 loads of 132 steers; mostly blk; est. wt. 750 lbs.; $156.00 2 loads of 120 steers; blk; est. wt. 740 lbs.; $154.25 1 load of 65 steers; mostly blk; est. wt. 800 lbs.; $149.50 1 load of 60 steers; blk; est. wt. 850 lbs.; #153.75 East Tennessee Livestock Center, Sweetwater, TN Graded Feeder Sale Weighted Average Report for Friday Oct 19, 2018 Cattle Receipts: 837 For complete report: https://www.ams.usda.gov/mnreports/nv_ls183.txt Hardin County Stockyard - October 24, 2018 144 hd, steers, 715 lbs, M&L 1-2, Black/BWF Red/RWF CHX, 5 flesh, $157.00 69 hd, steers, 756 lbs, M&L 1, Black/BWF Red, 5 flesh, $153.30 86 hd, heifers, 591 lbs, M&L 1-2, Black/BWF Red/RWF Charo-lais/CHX, 5 flesh, $147.00 80 hd, heifers, 655 lbs, M&L 1-2, Black/BWF Red/RWF CHX, 5 flesh, $147.75 63 hd, heifers, 733 lbs, M&L 1, Black/BWF Red, 5 flesh, $146.00 Warren Co. Livestock Graded Sale, McMinnville, TN Weighted Average Report for Wednesday Oct 24, 2018 Cattle Receipts: 1445 For complete report: https://www.ams.usda.gov/mnreports/nv_ls189.txt

10/16/2018 TN Livestock Producers Fayetteville Receipts: 462 (207 graded & grouped) Steers: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 140.00 300-400 lbs 130.00-134.00 400-500 lbs 148.00-154.00 400-500 lbs 125.00-134.00 500-600 lbs 145.00-148.00 500-600 lbs 120.00-125.50 600-700 lbs 138.50-142.50 600-700 lbs 118.50-120.00 700-800 lbs 110.50 Bulls: Med & Lg 1-2 400-500 lbs 141.00-149.00 500-600 lbs 143.00-144.00 600-700 lbs 123.50-128.00 700-800 lbs 117.50

10/15/18 Morris Brothers Stockyard, Pikeville, TN Receipts: 125 Last Week: 104 Last Year: 92 Steers: Heifers: 300-349 lbs 300-349 lbs 132.00 350-399 lbs 124.00-131.00 350-399 lbs 122.00 400-449 lbs 117.00 400-449 lbs 114.00-124.00 450-499 lbs 119.00-122.00 450-499 lbs 119.00-132.00 500-549 lbs 500-549 lbs 122.00 600-699 lbs 119.00-128.00 600-699 lbs 112.00-122.00 700-799 lbs 125.00 700-799 lbs 116.50-120.00 Over 799 120.00 Over 700 101.50 Bulls: 250-249 lbs 152.50 300-349 lbs 136.00 350-399 lbs 114.00-128.00 400-449 lbs 110.00-126.00 450-499 lbs 110.00-126.00 500-549 lbs 125.00 550-599 lbs 118.00-124.00 600-699 lbs 112.00-134.00 700-799 lbs 90.00 Over 799 90.00-91.00

Columbia Graded Sheep and Goat Sale Weighted Average Report for 10/22/2018 Receipts: 630 (330 goats; 300 sheep) For complete report: https://www.ams.usda.gov/mnreports/nv_ls320.txt

Graded Sales, Video Board Sales, Video Sales & Loads

Self-Reported and Self-Graded Markets

Self-Reported and Self-Graded Markets

Graded Sheep and Goat Sale

10

‘Heartbreaking’ Drought Forces Canadian Ranchers to Cull Herds

October 25, 2018

A scorching drought in Canada’s heartland that made grass worthless for feed is causing farmers to consider culling as much as 20 percent of the national cattle herd before winter in a "heartbreaking" nationwide effort.

Canada’s cattle industry has suffered one blow after another, starting with an outbreak of mad cow disease more than a dec-ade ago. That’s been followed by drought, floods and labor shortages, driving the national herd down to 12.4 million cattle as of July, the smallest since 1988, government data show.

“This is one of the worst years we’ve ever had,” said Larry Max-well, 60, by telephone from his ranch in Trochu, Alberta. “That’s our main source of income, and it was very hard for us to part with the cows. It was heartbreaking.”

It can be brutal raising cattle in Canada’s heartland. In the win-ter, you battle arctic winds and frigid temperatures. And in the summer, there can be scorching heat. But at least then there’s usually rain to cool things down and make the grasslands green. This year, there was barely a drop.

Maxwell’s pasture has been fried as a result, he said, leaving brown, brittle grass in its wake, useless for grazing. In order to feed his 150-cow herd, he’s been trucking in expensive feed from 60 miles (97 kilometers) away that’s nearly twice the price it was last year.

Maxwell had planned to keep his herd size stable this year, but the surging costs have already forced him to cull 30 of his ani-mals, bringing him down to 120, and he’s probably going to

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have sell as many as 10 more to raise the funds he needs to feed the rest during the winter freeze. It’s a story playing out across Canada, the world’s sixth-largest beef exporter.

Ranchers will probably cull as much as 20 percent of their herds this year, since animals usually need even more feed during the coldest months, said Charlie Christie, chair of Alberta Beef Pro-ducers.

“We’ve been wanting this herd to grow for several years now,” said Christie, who moved his animals to a feed yard a month early and has been using canola straw to help supplement feeding. “We’re going to see a smaller herd.”

Unfortunately for consumers, the increased slaughter is unlike-ly to dramatically reduce domestic beef prices in the short term as demand remains relatively strong, Christie said. At the same time, there’s been a boom in U.S. meat production, which will also keep global supplies ample.

Hay Costs Soar

For Canada’s ranchers, the problems intensified this year when swaths of Alberta, the nation’s largest beef producer, got less than 60 percent of normal rainfall throughout much of the crop-growing season. The dry conditions deteriorated pasture con-ditions and sent the price of hay soaring to twice as much as a year earlier. The cost of feed barley in Alberta is near the high-est in at least three years, according to data from Winnipeg-based Farmers Advanced Risk Management Co.

As ranchers have been forced to sell more animals, cattle-auction marts opened earlier than they typically do in fall and sales have already been busy, said Brian Lemon, general man-ager of Manitoba Beef Producers. The number of cows for sale is up more than 10 percent this year, pushing some cattle pric-es to the lowest in years, said Brian Perillat, a senior analyst at Calgary-based Canfax, the market analysis division of the Cana-dian Cattlemen’s Association.

“Moving forward, we thought we’d hopefully reverse the shrinking trend and start to grow,” Perillat said by phone. In-stead, “we’ll continue to probably see our slaughter and mar-ketings be above a year ago” as ranchers cull, he said.

Department of Agricultural and Resource Economics 314 Morgan Hall • 2621 Morgan Circle

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