Beef Buzz News
Lack of Packer Capacity, High Feed Costs And Drought All Weighing on The Cattle Market Says OSU's Dr. Peel
Mon, 17 May 2021 07:53:47 CDT
Large profit margins for the beef packing industry, as high as $900 per animal, are attracting the "stink eye" from cattle producers who are struggling to make any profit.
Dr. Derrell Peel, OSU Extension livestock market economist, says there are several factors weighing on the cattle market right now.
One of the big ones is we have a very large supply of fed cattle and not enough packing capacity to process it all, Peel said.
We have been aware for several years packing capacity was in balance and now it is short of what we need, he said.
Cattle producer organizations met this past weekend to look at possible solutions to challenges.
The OSU livestock economist said another challenge facing cattle producers this spring is rising feed costs.
We've seen a tremendous run up in feed prices recently, Peel said.
The feed costs have a bigger impact on the feeder cattle market, but the feeder cattle market is caught between the stagnant fed cattle market and the high feed prices, Peel said.
A final factor is the drought, he added.
This should be the growing season, but it is not going to grow in many places, he said.
As we go forward, we may see significantly more impacts from the drought, he said.
Peel said there is some encouraging news for producers.
Beef demand is incredibly strong and that is a very positive factor, he said.
The most recent trade data was encouraging in terms of beef exports, he said.
As we reach the end the year there is reason for considerable optimism in these cattle markets, Peel said.
Click on the LISTEN BAR below to hear more comments from Dr. Peel.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Ron Hays Beef Buzzes With Dr. Derrell Peel
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