Oklahoma Farm Report - OSU's Derrell Peel Urges Fall Stocker Operations to Review Budgets Before They Buy Fall Feeders

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OSU's Derrell Peel Urges Fall Stocker Operations to Review Budgets Before They Buy Fall Feeders

Wed, 29 Sep 2021 19:27:43 CDT

OSU's Derrell Peel Urges Fall Stocker Operations to Review Budgets Before They Buy Fall Feeders Many wheat producers are hoping to get some wheat pasture planted this fall, while those who have already planted are waiting for rain. Today, Radio Oklahoma's own Ron Hays spoke with Derrell Peel, extension livestock marketing specialist at Oklahoma State University, who said farmers and ranchers should be double-checking their cattle figures before bringing in new ones to graze soon-to-be-planted winter wheat pasture.

"The budgets have changed pretty dramatically in the last two or three weeks when you figure in what the futures market has done in terms of what it suggests for sale price in the spring," Peel said. "But those budgets have looked pretty good going into the fall."

First, farmers and ranchers should consider what the seasonal pattern does, in terms of the purchase price for cattle, going into fall, according to Peel. Next, farmers and ranchers should note that the futures market has undergone a significant correction, which takes much of the gravy out of the stocker budget, he added.

In Peel's opinion, stocker markets have oversold in recent weeks. He said he would not be surprised to see stocker cattle futures markets come back a bit, offering a decent market opportunity when they do.

For Oklahoma, Peel said dry conditions are going to be the biggest concern.

"It is difficult to put wheat in," Peel said. "We are going to be dusting it in and hoping for a rain."

Aside from a lack of rain, there is always the threat of pests, he added. This year, Oklahoma's armyworm plague has an appetite for grass, particularly lawns and pasture.

With all these moving parts, Peel is encouraging farmers and ranchers to go over their budgets again.

"The markets have been volatile enough that you have to look at them," Peel said. "If the budget, based on those futures prices in the spring for feeder cattle, does seem to offer a margin, it is only meaningful if you take action to lock that in."

Based on what Peel has seen so far, he thinks the risk if high enough that producers should at least double-check what their margins are before going forward with the same plan as in previous years.

Click on the LISTEN BAR below to hear more from Ron Hays and Dr. Derrell Peel as they talk about the ins and outs of winter wheat planting in Oklahoma and more on the latest USDA Cattle on Feed report and beef cow liquidation.
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