Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
    
   
   
   
   
   
   
   
   
   

Agricultural News


New Cattle Economics Favor Forage

Wed, 01 Feb 2012 03:02:14 CST

New Cattle Economics Favor Forage The beef industry is at the beginning of a long-term economic shift, says Dr. Derrell Peel, livestock marketing economist at Oklahoma State University. And it’s a shift to - or maybe back to - forage.


“The cattle industry from the 1960s to 2006 was based on cheap grain and cheap energy,” he says. “Late in 2006, the world began to change.


“Corn prices doubled in a few months. For almost 20 years, corn prices were about $2 per bushel. The trading range for corn now is twice to three times what it was, and it’s basically permanent. Feed is no longer the primary use of corn.”


In remarks prepared for a “New Age of Forage” media seminar here sponsored by range and pasture herbicide manufacturer Dow AgroSciences, keynote speaker Peel noted that the cattle market now wants more pounds produced from forage. We talked with Dr. Peel about the changes in the cattle business because of high priced corn, herd liquidation, drought and how cattle producers who want to survive and thrive need to adjust their operations to do so. Click on the LISTEN BAR at the bottom of this story to hear our full conversation with Dr. Peel.


In the past, markets have favored calves over yearlings or yearlings over calves. Now the market wants more production of both, evidenced by higher prices on calves and heavy feeders alike. That’s a function of high corn prices and low cattle numbers.


“This situation with high corn prices and low cattle numbers is the only time like this in history,” Peel says. “It’s not business as usual.”


It’s been conventional wisdom in the cattle business that producing was easier than marketing. “Now marketing is easy,” Peel says. “You have to screw up to get a bad price for a critter. What you need to focus on is producing and producing cost-effectively.”


Markets will reward those who produce forage efficiently and use it to put pounds on marketable cattle, whether they’re calves or heavy feeders.


“For the foreseeable future, there is more value in forage,” Peel says. “For the first time in two generations, we have an incentive to manage forage right.”


Long-term - beyond 5 years - Peel sees a big role for stocker operators. For fed cattle economics to work, the industry will have to keep feeder cattle on forage longer before grain finishing. Peel does not foresee grass-fed beef growing much beyond a niche market. But the industry will change from its grain-intensive past to a forage-intensive future, he says.


“In the past, I don’t think we looked very hard at better management of pastures because we didn’t have a reason. Cheap corn substituted for a lot of sloppy forage management.


Going forward, the industry will learn how to use the least amount of grain and still produce a USDA Choice product, he predicts.


“I don’t know what’s possible. I know there are more possibilities than we’ve thought about,” he says. “We can do production in different ways. We can emphasize forage. We should be looking at new forages and looking at different forage systems.


“But status quo is not what we’re about. I see it as an enormous opportunity for the industry.”



   
   

 

Ron Hays talks with Dr. Derrell Peel of OSU about the new econmics that seem to favor better management of forage.
right-click to download mp3

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Todd Wilkinson to U.S. Senate Committee: American Beef is Climate Change Solution  Fri, 18 Oct 2019 16:19:23
  • Protein Plays an Essential Role in Global Nutrition  Fri, 18 Oct 2019 16:12:22
  • OSU's Janeen Salak-Johnson Tells Cattle Producers Being Open to Doing Things Differently Can Save an Industry  Fri, 18 Oct 2019 15:02:45 CDT
  • Atop the RON Rural Soapbox - Former Secretary John Block  Fri, 18 Oct 2019 06:45:39 CDT
  • Thursday Market Wrap-Up with Justin Lewis  Thu, 17 Oct 2019 22:45:56 CDT
  • OSU's Glenn Selk Talks about how Your Hay Quality can Affect Your Supplementation Strategy  Thu, 17 Oct 2019 20:32:24 CDT
  • American and European Equipment Manufacturers Call on Governments to Negotiate on Trade  Thu, 17 Oct 2019 20:21:03 CDT
  • Dunn, Conaway: USDA Research Developments Remain Top Priority  Thu, 17 Oct 2019 20:16:58 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit P&K Equipment Tulsa Farm Show AFR Insurance Stillwater Milling KIS FUTURES, INC. Oklahoma Cattlemen's Association

    Our Road to Rural Prosperity sponsors!

    Banc First OPSRC ORWA

    Search OklahomaFarmReport.com


       
       
    © 2008-2019 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.