Oklahoma Farm Report - OSU'S Derrell Peel Breaks Down The Latest Cattle Inventory Report

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OSU'S Derrell Peel Breaks Down The Latest Cattle Inventory Report

Mon, 26 Jul 2021 11:15:16 CDT

OSU’S Derrell Peel Breaks Down The Latest Cattle Inventory Report Release on Friday Afternoon, July 23rd, the mid-year cattle inventory report offers much explanation about cattle numbers and their comparison to previous years and cycles. Click here for the full report from USDA.

Derrell Peel, OSU professor and livestock marketing extension specialist, said the numbers offered were relatively close to expectation and offered little surprise for the mid-year cattle inventory report.

Cattle numbers peaked on this cycle in 2019, Peel said. We drifted lower in 2020 and January 2021, and we are also currently in the middle of a drought, which could impact numbers, he added.

The bottom line is this mid-year cattle inventory report stated all cattle inventory was down 1.3 percent, Peel said.

In addition, the beef cow herd is down an estimated 2 percent, beef replacement heifers down 2.3 percent, and national cattle-on-feed down 1.5 percent.

Peel said the feeder supply, which is calculated from those inventory categories, is also down this year.

"That is a key to confirm that we are moving through this bulge of cattle that has been hanging over cattle markets," Peel said. "All of this adds up to the idea that the problem is getting fixed, and we are right on the verge of turning the corner and making it better."

Compared to a year ago, beef cow numbers are down which could ultimately hint at the drought liquidation, he said.

Until the January numbers are received, Peel said he's not sure we will truly know.

This is due in part to the beef cow slaughter number for this year, Peel said.

For the last 15 weeks, compared to 2019, numbers are up about 15 percent, he said.

If you look at the numbers of cows involved, Peel said, one cannot really tell how much is actual drought liquidation that was not planned versus how much is early culling of cows that would have presumptively come in the second half of the year.

"This why it is important to watch going forward," Peel said. "If we continue the pace of cow slaughter that we see up to now, then it is going to be very clear that we are cutting the herd in a way we never planned to."

Peel added this has ramifications going into the next 2-3 years.

The long-run impacts could set us up to have even tighter supplies as we go forward, he said, which could potentially serve as a repeat to 2015.

We have expected to edge into the tighter numbers and bigger prices in the latter part of this year, Peel said. This helps reinforce this idea and sets up a good condition for producers to ideally set up strong returns, he added.

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