Farmer’s Report

June 22, 2023 prune to encourage growth
June 23 & 24, 2023 harvest aboveground crops, have dental care, pick fruit
June 25, 2023 begin diet to gain weight, harvest aboveground crops, have dental, care pick fruit
June 26 & 27, 2023 cut hair to encourage growth, get married
June 28, 2023 breed animals, brew beer or cider, plant aboveground crops, slaughter livestock

CROP COMMENTS

by Aaron Smith, Crops
Marketing Specialist
June 16, 2023
Overview

Corn, soybeans, and wheat were up; cotton was down for the week. Dry conditions pushed corn and soybean futures
higher this week. December corn closed the week up $0.67/bu at $5.97 ½ per bushel and November soybean futures closed up $1.38/bu at $13.42 ¼ per bushel. December corn futures are up 106 ¾ cents since the May 18 low of
$4.90 ¾. November soybean futures have closed up seven consecutive trading days with gains of 10 ½, 15 ¼, 4 ¾, 30 ½, ½, 52 ¼, and 50 cents from June 8 to June 16. Dryer forecasts will continue to propel corn and soybean
prices higher. Drought expanded throughout the Midwest this week. As of June 13, the US drought monitor for the Midwest (Minnesota, Iowa, Wisconsin, Michigan, Missouri, Illinois, Indiana, Ohio, and Kentucky) estimated
extreme drought at 1.2%, severe drought at 8.0%, moderate drought at 48.7%, and abnormally dry conditions at 89.3%.
Kansas and Nebraska remain the epicenter of the current drought with 90.8% of Kansas abnormally dry and 43.7%
in extreme drought and Nebraska at 98.2% abnormally dry and 20.3% in extreme drought. Tennessee drought expanded,
with 62.9% of the state abnormally dry and 15.3% in moderate drought. NOAA’s seven-day (June 16-June 23) precipitation forecast indicates precipitation for areas in the Southeast and Northern Plains, but rainfall for most of the Corn Belt is forecast at less than one inch. Forecasts further out may provide rainfall, but the accuracy of these projections is diminished. Rainfall over the next 2-3 weeks will be critical for this year’s corn crop. The USDA’s most recent national yield estimate of 181.5 bu/acre seems very unlikely based on current conditions. Cotton futures prices
continue to move sideways in a trading range of 78 to 84 cents. Some drought has been alleviated in the Southern
plains which will reduce overall abandonment. The June WASDE report projected national average cotton yield at 841
lbs/acre, planted acres at 11.26 million, and harvested acres at 9.41 million – abandonment of 16%. The drought picture
in Texas has changed dramatically since the start of May with extreme drought being reduced from 20.7% as of May
2nd to 1.4% as of June 13th.

LIVESTOCK COMMENTS

by:Andrew Griffith, Livestock
Marketing Specialist
June 16, 2023
FED CATTLE
Fed cattle traded $2 to $3 lower compared to last week on a live basis. Prices in the South were mainly $182 to $183 while dressed prices were mainly $296. The 5-area weighted average prices thru Thursday were $186.78 live, down $2.28 compared to last week and $296.08 dressed, down $3.06 from a week ago. A year ago, prices were $143.73 live and $229.73 dressed. Finished cattle trade was slow to develop this week as cattle feeders were not willing sellers. Packers were not offering last week’s prices, and most of the cattle feeders were expecting to at least hold par with week ago prices. Thus, very little business was completed early in the week. Cattle feeders are fairly current with marketings and know there will be fewer cattle moving forward. So, they may see this as a week to hold cattle and put a few more pounds on, because they are in the driver’s seat. The expectation is that packers will need cattle in coming weeks to cover obligations, which means they will have to come to the table. However, this does not guarantee higher prices as packers
may hold out a while.
BEEF CUTOUT
At midday Friday, the Choice cutout was $342.95 up $0.88 from Thursday and up $11.97 from a week ago. The Select cutout was $309.94 up $0.36 from Thursday and up $3.37 from last week. The Choice Select spread was $33.01 compared to $24.41 a week ago. Wholesale boxed beef prices have been making a run since the beginning of June with Choice box prices more than $34 per hundredweight higher than two weeks ago. It is necessary for packers to push boxed beef prices higher given the price they are paying for finished cattle. One factor that may be supporting beef prices is Juneteenth being recognized as a national holiday. Thus, Federal employees and many state employees have a three day weekend ahead of them, which will certainly mean more gatherings and more grilling. Holidays during the summer months certainly support beef movement and prices. In the same breath, Independence Day is less than three weeks away, and it tends to be a strong holiday for beef disappearance. The only drawback is that it is on a Tuesday, which is not as favorable as weekend grilling holidays. Beef disappearance throughout the summer will provide a good indication if consumers will continue to be willing buyers despite high beef prices, inflationary factors of other goods, and higher
interest rates.
OUTLOOK
Based on Tennessee weekly auction price averages, steer prices were steady to $2 lower this week compared to last week
while heifer prices were steady to $4 higher compared to the previous week. Slaughter cow prices were $1 to $3 lower compared to last week while slaughter bull prices were steady to $1 lower compared to a week ago. The big story for the second full week of June is the softening of cattle futures. Following five months of what has seemed like steadily higher futures prices, traders have slowed the push for higher prices and have allowed prices to decline. The question among analysts is if this is simply a minor correction or if the market is going to trade significantly lower in the coming weeks.
From the fundamental perspective, cattle supply is unchanged from expectations, but drought concerns across the Plains and much of the Midwest is resulting in higher corn prices, which means a higher cost of gain in the feedlot. At the same time, there appears to be continued inflationary concern as consumers are still paying more at the grocery store. Thus, there are some real concerns that could drive the cattle market lower than its current mark. Despite the previous statement, cattle prices received will still be “strong” if they decline on the futures market. The ability to sell an 800 pound steer for $200 per hundredweight or better is still a good price. If the drought conditions persist in the Corn Belt and the Plains then there may be much tougher decisions ahead than when to sell a group of calves. It cannot not be stressed enough that producers should maintain good culling practices in the cow herd. Just as calf prices are strong, so are slaughter cows. Calf prices will never be high enough to retain a cow that should be culled based on the typical culling criteria. The death of one cow when attempting to get “one more calf” can wipe out the profits of several calves.
ASK ANDREW, TN THINK TANK
What would you do with this farm if it was yours? Folks in agriculture are frequently trying to figure out the highest valued use of their resources. Two of the most limiting resources are land and labor. There is only so much land at a person’s disposal, and the only labor a person can count on today is his or her own labor. Given this information for an operation, producers should put some time into thinking of all their options given the land and labor resources available.
It is actually beneficial to write out the alternatives in many cases. Once this has been done then other limiting resources can be included in the mix such as capital or access to capital, machinery, infrastructure, and a whole host of other operation specific resources. The main point here is that it is important to evaluate an operation and its resources so adjustments can be made to increase profitability. Sometimes it is necessary to make changes that free up certain resources to contribute to the overall efficiency of an operation. Please send questions and comments to agriff14@utk.edu.
FRIDAY’S FUTURES MARKET
CLOSING PRICES
Friday’s closing prices were as follows: Live/fed cattle –June
$178.35 +0.78; August $171.73
+0.65; October $175.35 +1.00;
Feeder cattle –August $234.93
+0.80; September $238.18
+0.65; October $240.30 +0.50;
November $241.30 +0.43; July
corn closed at $6.40 up 17 cents from Thursday.