July 13, 2018 Tennessee Market Highlights Number: 28

FED CATTLE: Fed cattle trade was not es-tablished at press. Asking prices on a live basis were mainly $114 while bid prices were mainly $108. The 5-area weighted average prices thru Thursday were $174.79 dressed with no dressed trade occurring through Thursday. A year ago prices were $119.48 live and $190.08 dressed. Cattle trade this week was a lot like trying to get a child to rip a band aid off his arm. Everyone knows the band aid has to come off but the child was going to delay the in-evitable until he had an incentive. In this case, packers and feedlot managers alike were acting as the child and hoping they could win the battle this week. It is difficult to say if the summer price low for fed cattle has already been established just below $107 per hundredweight, but the risk of going much lower than that is extremely low. The best odds are for finished cattle to trade fairly flat the next several weeks though the term flat may actually look more like a saw blade. Some of the price pressure on live cattle should be alleviated moving into fall. BEEF CUTOUT: At midday Friday, the Choice cutout was $204.72 down $1.86 from Thursday and down $3.41 from last Friday. The Select cutout was $199.08 down $0.41 from Thursday and down $2.48 from last Friday. The Choice Select spread was $8.12 compared to $9.05 a week ago. The dog days of summer have been slowly creeping into the beef market and pressur-ing prices lower. The price pressure is evi-dent in both the Choice and Select cutout as well as in the narrowing of the Choice Select spread. Most of the change in the beef cutout price is determined by domes-tic demand and to a lesser extent beef ex-ports. This time of year, domestic consum-ers are beginning to shy away from grilling middle meats strictly due to increasing air

temperatures. At the same time, many con-sumers move towards hamburgers and hotdogs for grilling purposes. From the ex-port market side, beef exports continue to remain strong and support prices. Beef and veal exports in May totaled 272.8 million pounds. Japan remains the largest export market totaling 81.3 million pounds with South Korea being the number two export destination at 56.8 million pounds in May. Mexico and Canada remain large markets with exports reaching 36.6 and 29.1 million pounds respectively while Hong Kong and Taiwan continue to be strong destinations. OUTLOOK: Tennessee livestock auction markets were back at full speed following a week of limited activity at weekly auction markets due to Independence Day falling in the middle of the week. Prices this week compared to two weeks ago on Tennessee weekly auction markets showed steers $2 to $4 higher while heifers were $5 to $7 higher. Alternatively, slaughter cow prices were $2 to $3 lower than two weeks ago while slaughter bull prices were $4 lower. It is fairly easy to see that the cash market and the futures market are moving togeth-er given that August futures were approxi-mately $4 higher this week compared to two weeks ago which falls in line with the gains in the cash feeder cattle market. This is of particular interest to fall calving herds and stocker producers as they prepare to market yearling cattle when prices are sea-sonally strongest. The market has showed considerable strength from late spring through the early weeks of summer. The question now is if prices will continue to strengthen or if there is any reason for pric-es to be pressured. Feeder cattle prices certainly have enough juice in the tank to gain $3 to $5 more per hundredweight from mid-July through the middle of Au-gust. Alternatively, there is enough political unrest across the nation and the world to disrupt such gains which then could actual-ly lead to a softer market. If the current

(Continued on page 2)

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

Slaughter Cows

$2 to $3 lower

Slaughter Bulls

$4 lower

Feeder Steers

$2 to $4 higher

Feeder Heifers

$5 to $7 higher

Feeder Cattle Index

Wednesday’s index: $147.16

Fed Cattle

The 5-area live price was not re-ported. The dressed price was $174.79.

Corn

September closed at $3.41 a

bushel, down 19 cents since last

Friday.

Soybeans

August closed at $8.18 a bushel,

down 59 cents since last Friday.

Wheat

September closed at $4.97 a

bushel, down 18 cents since last

Friday.

Cotton

December closed at 87.84 cents per lb, up 3.39 cents since last Fri-day.

2

political rhetoric persists then very little change is expected, but an escalation of said rhetoric could be a market mover. Step-ping out on a limb to predict the next month and a half, which is not typical of an economist, the price of yearling feeder cattle has about a 20 percent chance of seeing greater than $3 gains in the cash market over the next 45 day, 60 percent probability of staying in a range of losing $3 to gaining $3, and a 20 percent chance of declining more than $3 per hundredweight. This price expectation now provides readers ammunition to use against the writer, but maybe he can take the heat if he is in-correct. ASK ANDREW, TN THINK TANK: This week a question was re-ceived concerning the timing of marketing. In this particular instance the producer knows he plans to sell a truck load lot (50,000 pounds) and he knows which marketing agency is going to represent his cattle. Additionally, he knows he wants to move the cattle in August. The question is what part of August to market the cattle. Even with all of the known information, there are several things to consider. First, it is difficult to guess week to week price variation. One would not expect a large price change from one week to the next, but it can happen. When trying to make this decision, producers should first real-ize that prices can only do three things: increase, decrease, or stay the same. In relation to this question, two of those three things are in the producers favor. If feed or forage is abundant and relatively inexpensive the additional weight added over a couple of weeks should not greatly affect price and it should pay for itself. Even if prices slightly decline, the added weight may still pay for itself. Regardless, it is always a gamble. 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 –August $104.55 -0.48; October $107.38 -0.23; December $111.40 -0.18; Feeder cattle –August $150.73 -0.30; September $151.08 +0.10; October $151.35 +0.08; November $151.03 -0.05; July corn closed at $3.30 down $0.06 from Thursday.

(Continued from page 1)

Livestock Comments by Dr. Andrew Griffith

Thursday, July 12, 2018

Month Class III Close Class IV Close

July 14.30 14.15

Aug 15.00 14.08

Sept 15.39 14.28

Oct 15.57 14.53

Nov 15.60 14.72

Milk Futures

Cattle Hogs

———— Number of head ————

This week (4 days) 119,750 454,000

Last week (3 days) 118,333 463,000

Year ago (4 days) 117,750 439,750

This week as percentage of

Week ago (%) 101% 98%

Year ago (%) 102% 103%

Average Daily Slaughter USDA Box Beef Cutout Value

Choice 1-3 600-900 lbs

Select 1-3 600-900 lbs

———————— $/cwt —-———————

Thursday 206.58 197.01

Last Week 208.43 198.70

Year ago 212.69 198.73

Change from week ago -1.85 -1.69

Change from year ago -6.11 -1.72

3

Crop Comments by Dr. Aaron Smith

Overview Corn, soybeans, and wheat were down; cotton was up for the week. Another substantial drop in corn, soybean, and wheat futures prices this week as a result of positive weather forecasts and an intensifying tit-for-tat trade war with China. Cash soybean offerings in west Tennessee have dipped below $8. Prices are currently searching for a bottom as we are treading in untested

waters from a technical standpoint. In price risk management you often have to take the good with the bad when it comes to price fluctuations. To highlight this phe-nomenon one only has to look to the soybean and cotton futures markets from March 2018 to today. On March 1, November 2018 soybean futures closed at $10.38. This Friday (July 13) the November soybean contract closed at $8.34, a decrease of $2.04 (20% decrease). Conversely, on March 1, December 2018 cotton futures closed at 77.18 cents. This Friday (July 13) the December con-tract closed at 87.84 cents, an increase of 10.66 cents (14% increase). For a soybean producer who priced 50% of estimated production on March 1 and 50% today, the average price would be $9.36 [($10.38 + $8.34)/2] or $1.02 more than the current market offering. On the other hand, the cotton producer that priced 50% of estimated production on March 1 and 50% today would receive an average price of 82.51 cents [(77.18 + 87.84/2)], 5.33 cents less than today’s price. In this simplistic example, pricing 50% of the crop before planting took the top out of the cotton market (bad for the producer) and the bottom out of the soybean market (good for the producer). In hindsight, the strategy of pricing 50% of pro-duction (or some other percent) will always be the second most profitable option – either the spring price (soybeans) or the cur-rent price (cotton) will always be higher than the combined average price for each commodity. The challenge in marketing is we do not know which one will be the best alternative until both prices have been realized. On Thursday, the USDA released the July WASDE and Crop Production reports: The July Crop Production report estimated U.S. (Tennessee) winter wheat: yield at 48 bu/acre (63 bu/acre), harvested acres 24.8 million (295,000), and production at 1.192 billion bushels (18.6 million bushels). A detailed analysis of the WASDE report is available at: https://ag.tennessee.edu/arec/Pages/MonthlyCropComments.aspx Corn Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Northwest Barge Points, Northwest, Lower-middle, and Upper-middle Tennessee and weakened at Memphis. Overall, basis for the week ranged from 25 under to 30 over the September futures contract with an average of 1 under at the end of the week. September 2018 corn futures closed at $3.41, down 19 cents since last Friday. For the week, September 2018 corn futures traded between $3.37 and $3.59. Corn net sales reported by exporters from June 29-July 5 were below expectations with net sales of 15.8 million bushels for the 2017/18 marketing year and 5.0 million bushels for the 2018/19 marketing year. Exports for the same time period were down 8% compared to last week at 55.0 million bushels. Corn export sales and commitments were 99% of the USDA estimated total an-nual exports for the 2017/18 marketing year (September 1 to August 31) compared to a 5-year average of 101%. Ethanol produc-tion for the week ending July 6 was 1.033 million barrels per day, down 34,000 from the previous week. Ethanol stocks were 22.393 million barrels, up 418,000 barrels. Sep/Dec and Sep/Mar future spreads were 13 and 25 cents, respectively.

(Continued on page 4)

4

Crop Comments by Dr. Aaron Smith

The Crop Progress report estimated corn condition at 75% good-to-excellent and 7% poor-to-very poor; and corn silking at 37% compared to 17% last week, 18% last year, and a 5-year average of 18%. In Tennessee, corn condition was estimated at 84% good-to-excellent and 1% poor-to-very poor; corn silking at 83% compared 60% last week, 78% last year, and a 5-year average of 68%; and corn doughing at 25% compared to 3% last week, 12% last year, and a 5-year average of 7%. In Tennessee, September 2018 corn cash forward contracts averaged $3.43 with a range of $3.20 to $3.74. December 2018 corn futures closed at $3.54, down 19 cents since last Friday. Downside price protection could be obtained by purchasing a $3.60 December 2018 Put Option costing 20 cents establishing a $3.40 futures floor. March 2019 corn futures closed at $3.66, down 17 cents since last Friday. Soybeans

Average soybean basis strengthened at Northwest Barge Points, Northwest, and Lower-middle Tennessee, and weakened at Mem-phis and Upper-middle Tennessee. Basis ranged from 45 under to 28 over the August futures contract at elevators and barge points. Average basis at the end of the week was 6 under the August futures contract. August 2018 soybean futures closed at $8.18, down 59 cents since last Friday. For the week, August 2018 soybean futures traded between $8.11 and $8.79. Net sales re-ported by exporters were below expectations with net sales of 5.8 million bushels for the 2017/18 marketing year and 10.0 million bushels for the 2018/19 marketing year. Exports for the same period were down 22% compared to last week at 27.0 million bush-els. Soybean export sales and commitments were 102% of the USDA estimated total annual exports for the 2017/18 marketing year (September 1 to August 31), compared to a 5-year average of 102%. September soybean-to-corn price ratio was 2.42 at the end of the week.

Aug/Sep and Aug/Nov future spreads were 6 and 16 cents, respectively. September 2018 soybean futures closed at $8.24, down 59 cents since last Friday. The Crop Progress report estimated soybean condition at 71% good-to-excellent and 7% poor-to-very poor; soybeans blooming at 47% compared to 27% last week, 32% last year, and a 5-year average of 27%; and soybeans setting pods at 11% compared to 6% last week and a 5-year average of 4%. In Tennessee, soybean condition was estimated at 83% good-to-excellent and 1% poor-to-very poor; soybeans emerged at 96% compared to 89% last week, 94% last year, and a 5-year average of 88%; soybeans blooming at 42% compared to 24% last week, 37% last year, and a 5-year average of 22%; and soybeans setting pods at 10% compared to 5% last year and a 5-year average of 3%. In Tennessee, Oct/Nov 2018 soybean cash contracts average $8.41 with a range of $8.18 to $8.72. November 2018 soybean futures closed at $8.34, down 60 cents since last Friday. Downside price protection could be achieved by purchasing an $8.40 November 2018 Put Option which would cost 41 cents and set a $7.99 futures floor. Nov/Dec 2018 soybean-to-corn price ratio was 2.36 at the end of the week.

Cotton

Delta upland cotton spot price quotes for July 12 were 87.74 cents/lb (41-4-34) and 89.49 cents/lb (31-3-35). Adjusted World Price (AWP) increased 1.58 cents to 76.17 cents. Net sales reported by exporters were up from last week with net sales of 121,600 bales for the 2017/18 marketing year and 251,400 bales for the 2018/19 marketing year. Exports for the same period were down 38% compared to last week at 257,400 bales. Upland cotton export sales were 109% of the USDA estimated total annual exports for the 2017/18 marketing year (August 1 to July 31), compared to a 5-year average of 105%.

The Crop Progress report estimated cotton condition at 41% good-to-excellent and 27% poor-to-very poor; cotton squaring at 59% compared to 42% last week, 59% last year, and a 5-year average of 55%; and cotton setting bolls at 21% compared to 12% last week, 18% last year, and a 5-year average of 15%. In Tennessee, cotton condition was estimated at 90% good-to-excellent and 1% poor-to-very poor; cotton squaring at 80% compared to 72% last week, 73% last year, and a 5-year average of 61%; and cotton setting bolls at 20% compared to 8% last week, 11% last year, and a 5-year average of 8%. December 2018 cotton futures closed at

(Continued on page 5)

5

Crop Comments by Dr. Aaron Smith

87.84, up 3.39 cents since last Friday. For the week, December 2018 cotton futures traded between 84.14 and 89.3 cents. Dec/Mar and Dec/Dec cotton futures spreads were -0.22 cents and -6.5 cents, respectively. Downside price protection could be obtained by purchasing an 88 cent December 2018 Put Option costing 6.07 cents establishing an 81.93 cent futures floor. March 2019 cotton futures closed at 87.62, up 3.34 cents since last Friday. December 2019 cotton futures closed at 81.34, up 2.36 cents since last Friday.

Wheat

In Tennessee, July 2018 wheat cash contracts ranged from $4.54 to $5.28 for the week. Wheat net sales reported by exporters were below expectations with net sales of 5.0 million bushels for the 2018/19 marketing year. Exports for the week were down 26% compared to last week at 10.5 million bushels. Wheat export sales were 24% 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 35%. The Crop Progress report estimated winter wheat harvested at 63% compared to 51% last week, 65% last year, and a 5-year average of 61%; spring wheat condition at 80% good-to-excellent and 3% poor-to-very poor; and spring wheat headed at 81% compared to 58% last week, 76% last year and a 5-year average of 69%. In Tennessee, the Crop Progress report estimated winter wheat harvested at 98% compared to 94% last week, 98% last year, and a 5-year average of 93%.

September 2018 wheat futures closed at $4.97, down 18 cents since last Friday. September 2018 wheat futures traded between $4.71 and $5.14 this week. September wheat-to-corn price ratio was 1.46. Sep/Dec and Sep/Jul future spreads were 15 cents and 45 cents, respectively. December 2018 wheat futures closed at $5.12, down 18 cents since last Friday. July 2019 wheat futures closed at $5.42, down 15 cents since last Friday. Downside price protection could be obtained by purchasing a $5.50 July 2019 Put Option costing 47 cents establishing a $5.03 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, July 6, 2018 — Thursday, July 12, 2018

Commodity Contract Month Friday Monday Tuesday Wednesday Thursday

Soybeans Jul 8.74 8.51 8.52 8.29 8.30

($/bushel) Aug 8.77 8.55 8.55 8.33 8.33

Sep 8.83 8.61 8.61 8.38 8.39

Nov 8.94 8.72 8.71 8.48 8.49

Jan 9.04 8.81 8.81 8.58 8.59

Mar 9.11 8.89 8.90 8.67 8.67

Corn Jul 3.51 3.45 3.39 3.31 3.36

($/bushel) Sep 3.60 3.54 3.47 3.40 3.45

Dec 3.73 3.67 3.60 3.53 3.59

Mar 3.83 3.78 3.72 3.65 3.71

May 3.90 3.84 3.79 3.72 3.77

Jul 3.96 3.91 3.85 3.78 3.83

Wheat Jul 5.12 5.07 4.89 4.69 4.82

($/bushel) Sep 5.15 5.08 4.92 4.71 4.84

Dec 5.30 5.25 5.10 4.90 5.01

Mar 5.43 5.40 5.27 5.09 5.18

May 5.53 5.50 5.38 5.21 5.30

Soybean Meal Jul 339 331 334 333 333

($/ton) Aug 338 329 332 330 330

Sep 338 330 332 330 330

Oct 337 329 331 329 329

Dec 337 327 330 327 327

Jan 335 325 327 324 324

Cotton Jul 86.38 87.16 ——— ——— ———

(¢/lb) Oct 85.65 86.58 87.50 85.24 89.24

Dec 84.45 85.47 86.38 84.54 88.54

Mar 84.28 85.36 86.02 84.35 88.35

May 84.49 85.48 85.85 84.23 88.23

Live Cattle Aug 106.37 106.12 105.45 103.85 105.02

($/cwt) Oct 109.62 108.62 107.82 106.25 107.60

Dec 113.70 112.95 112.27 110.67 111.57

Feb 116.52 116.40 116.40 115.12 115.95

Apr 118.25 118.05 118.22 117.22 117.82

Feeder Cattle Aug 152.20 151.45 151.85 149.40 151.02

($/cwt) Sep 152.27 151.77 152.05 149.42 150.97

Oct 152.15 151.72 152.15 149.95 151.27

Nov 152.02 151.60 151.97 150.40 151.07

Jan 149.37 149.22 149.72 148.92 149.42

Mar 148.10 147.82 148.45 147.72 148.05

Market Hogs Jul 81.37 80.22 79.50 79.77 79.95

($/cwt) Aug 75.42 72.77 69.77 68.80 70.42

Oct 58.55 56.12 53.77 52.02 53.95

Dec 54.80 52.55 49.92 46.45 48.75

Feb 61.07 59.10 56.30 52.47 54.95

Futures Settlement Prices: Crops & Livestock

7

Cattle Receipts: This week: 7,604 (9) Week ago: -- (--) Year ago: 7,264 (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 150.00 188.00 163.26 ——— 160.23

400-500 lbs 141.00 170.00 157.37 ——— 153.90

500-600 lbs 135.00 163.00 150.82 ——— 147.53

600-700 lbs 124.00 152.50 141.46 ——— 140.95

700-800 lbs 114.00 145.00 134.62 ——— 135.90

Steers: Small Frame #1-2

300-400 lbs 126.00 144.00 137.36 ——— 133.81

400-500 lbs 132.50 150.00 141.97 ——— 139.34

500-600 lbs 127.50 130.00 129.20 ——— 124.60

600-700 lbs 124.00 134.00 128.84 ——— ———

Steers: Medium/Large Frame #2-3

300-400 lbs 140.00 165.00 152.28 ——— 145.29

400-500 lbs 132.00 162.00 151.25 ——— 142.57

500-600 lbs 120.00 150.00 140.19 ——— 133.59

600-700 lbs 120.00 136.00 129.26 ——— 124.63

700-800 lbs 105.00 129.00 122.17 ——— 122.67

Holstein Steers

300-400 lbs ——— ——— ——— ——— 95.86

500-600 lbs ——— ——— ——— ——— 96.25

700-800 lbs ——— ——— ——— ——— 78.00

Slaughter Cows & Bulls

Breakers 75-80% 50.00 55.68 ——— 66.42 62.00

Boners 80-85% 58.43 ——— 71.96 50.00 65.50

Lean 85-90% 42.00 60.50 50.74 ——— 64.01

Bulls YG 1 70.00 92.50 81.82 ——— 93.85

Heifers: Medium/Large Frame #1-2

300-400 lbs 134.00 170.00 150.04 ——— 146.72

400-500 lbs 125.00 155.00 143.02 ——— 140.98

500-600 lbs 120.00 147.50 136.59 ——— 132.28

600-700 lbs 115.50 140.00 129.66 ——— 125.27

Heifers: Small Frame #1-2

300-400 lbs 127.50 137.50 131.63 ——— 131.67

400-500 lbs 120.00 127.50 122.26 ——— 117.88

500-600 lbs 120.50 144.00 127.48 ——— 118.52

600-700 lbs ——— ——— ——— ——— 110.54

Heifers: Medium/Large Frame #2-3

300-400 lbs 122.50 144.00 134.52 ——— 134.31

400-500 lbs 120.00 147.00 132.92 ——— 127.83

500-600 lbs 115.00 140.00 125.91 ——— 124.94

600-700 lbs 111.00 128.00 120.03 ——— 114.89

Prices on Tennessee Reported Livestock Auctions for the week ending July 13, 2018

8

Friday, July 6, 2018 — Thursday, July 12, 2018

Friday Monday Tuesday Wednesday Thursday

Low High Low High Low High Low High Low High

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

No. 2 Yellow Soybeans

Memphis 8.87-8.88 8.65-8.66 8.65-8.71 8.43-8.48 8.33-8.49

N.W. B.P. 8.67-8.85 8.65-8.69 8.63-8.84 8.42-8.45 8.40-8.46

N.W. TN 8.34-8.42 8.20-8.20 8.12-8.35 7.89-8.13 7.89-8.13

Upper Md. 8.67-8.88 8.46-8.65 8.46-8.65 8.23-8.43 8.24-8.43

Lower Md. 8.74-8.74 8.55-8.55 8.55-8.55 8.33-8.33 8.33-8.33

Yellow Corn

Memphis 3.70-3.70 3.64-3.64 3.53-3.57 3.46-3.50 3.51-3.55

N.W. B.P. 3.56-3.71 3.53-3.68 3.47-3.48 3.42-3.46 3.47-3.51

N.W. TN 3.35-3.49 3.34-3.44 3.24-3.32 3.16-3.30 3.21-3.36

Upper Md. 3.49-3.65 3.44-3.59 3.37-3.52 3.30-3.45 3.35-3.50

Lower Md. 3.90-3.90 3.84-3.84 3.77-3.77 3.70-3.70 3.75-3.75

Wheat

Memphis 5.30-5.35 5.23-5.28 5.08-5.12 4.86-4.87 4.99-5.00

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 St eers 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 - July 11, 2018 1 load out of 90 steers; BQA certified producer; est. wt. 830 lbs.; 95% L&M-1s, 5% L&M-2s; medium flesh; 100% Black/BWF; $143.75 1 load out of 95 Holstein steers; BQA certified producer; est. wt. 885 lbs.; 100% #1s; medium flesh; $87.25 Dickson Regional Livestock Center - July 9, 2018 1 load of 60 steers; avg. wt. 703 lbs.; $149.25 2 loads of 135 heifers; avg. wt. 700 lbs.; $136.00 Lower Middle Tennessee Cattlemens Video Board Sale Feeder Cattle Weighted Average Report for 07/06/2018 Receipts: 620 For complete report: https://www.ams.usda.gov/mnreports/nv_ls184.txt Blue Grass Stockyards - July 10, 2018 1 load of 60 steers; mostly blk/bwf; avg. wt. 825 lbs.; $145.00

7/10/18 TN Livestock Producers Fayetteville Receipts: 598 (279 graded & grouped) Steers: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 300-400 lbs 125.00-135.00 400-500 lbs 167.00-175.00 400-500 lbs 129.00-134.50 500-600 lbs 145.00-153.00 500-600 lbs 131.00-137.00 600-700 lbs 140.00-150.00 600-700 lbs 120.00-124.00 700-800 lbs 129.50-137.50 700-800 lbs 120.00-123.00 800-900 lbs 118.50 Bulls: Med & Lg 1-2 400-500 lbs 137.50-138.00 500-600 lbs 137.50 600-700 lbs 122.00-126.50 700-800 lbs 121.50

Columbia Graded Sheep and Goat Sale Weighted Average Report for 07/09/2018 Receipts: 474 (258 goats; 216 sheep) Last Sale: 936 For complete report: https://www.ams.usda.gov/mnreports/nv_ls320.txt

Video Board Sales, Video Sales & Loads

Self-Reported and Self-Graded Markets

Graded Sheep & Goat Sales

10

Bovine Viral Dilemma John Maday July 11, 2018

The following commentary does not necessarily reflect the views of AgWeb or Farm Journal. The opinions expressed below are the author's own

Among the most insidious pathogens affecting cattle, the bo-vine viral diarrhea virus (BVDv) stands out. Clinical signs and effects of the disease can vary widely, and while its name in-cludes the word “diarrhea,” the most damaging effects include abortions in cow-calf herds and the role of BVDv in the bovine respiratory disease complex in stocker and feeder cattle.

At the heart of the issue, persistently infected (PI) cattle repre-sent a critical control point and a significant ethical and finan-cial challenge for producers. PI cattle are those that survive infection during gestation and shed the virus for as long as they survive.

In a recent article titled “Enhanced BVDv Control Would Benefit the Cattle Industry,” Oklahoma State University Extension spe-cialist Derrell Peel, PhD, notes that BVDv incidence is relatively low at about 0.3 percent of cattle and only about 4 percent of cow-calf herds will have a PI-positive animal. However, he says, commingling that occurs in the stocker and feedlot sectors greatly magnifies the impact of PI cattle. A single PI calf may expose at least 150-200 head of other cattle to BVDv over its life, and around 79 percent of feedlot cattle are exposed to BVDv from a small number of PI cattle.

In theory, widespread testing and removal of PI animals, cou-pled with effective vaccination protocols in cow-calf herds, could eradicate the BVD virus. In reality though, testing adds production costs, as does removal of a PI calf, which might ap-pear healthy. And from the rancher’s perspective, they cover the costs while stocker and feedlot operators reap at least a portion of the benefits.

Peel notes that Oklahoma State University research shows the net value of enhanced BVDv control in the beef industry could be as much as $24 per head. Currently though, the feeder-calf market does not provide mechanisms for directly compen-sating cow-calf producers for their investments in BVDv con-trol. Peel refers to this as an example of “market failure,”

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where market participants do not fully recognize and incorpo-rate all costs and/or benefits into their private decisions.

Cow-calf producers can benefit from testing calves, replace-ment heifers and imported animals for BVDv. Test results al-most always will be negative, but timely diagnosis of a PI ani-mal can prevent substantial losses from declining pregnancy rates and calf morbidity. Benefits associated with risk reduction are, however, difficult to quantify financially. For information on how to measure those benefits, read “Analysis of cost-effectiveness of veterinary interventions,” from Dr. Bob Larson at Kansas State University.

Some marketing chains will provide premiums for calves certi-fied as BVD-tested and PI-free, but that trend has been slow in developing. In its annual survey of value-added markets, Supe-rior Livestock Auction has collected data on BVD-tested calves since 2008. In their data, premiums averaged $2.42 per hun-dredweight in 2012, $2.97 in 2013, $1.63 in 2014, $2.42 in 2015 and no advantage in 2016.

Scientists and veterinarians recognize that removal of PI calves is critical for control of BVDV, but that discussion always leads to the question of what to do with those calves. Producers fac-ing tight margins might be reluctant to euthanize or slaughter PI calves that appear healthy, and the potential loss of revenue can even discourage some producers from testing.

Ethically, the options for producers who find PI calves include euthanasia or shipping directly to slaughter. In some cases, producers can limit their losses by isolating and feeding PI calves to slaughter weights, either on their own operations or at a finishing facility that is equipped to feed the animals in complete isolation. The option entails considerable risk as mor-bidity and mortality rates tend to be high in groups of PI calves.

Peel notes that an indemnity program to pay for eliminating PI animals might increase incentives for better BVDv control in cow-calf herds. In any case, an industry-wide effort with shared risks and benefits across sectors, will be needed to significantly

reduce the impact of the destructive BVD virus. For more, read BVD Biosecurity, Vaccination and Diagnostics from Bovine Veterinarian.

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

arec.tennessee.edu USDA / Tennessee Department of Agriculture Market News Service http://www.tennessee.gov/agriculture/article/ag-farms-market-news 1-800-342-8206