Drought Fears Remain for Oklahoma Cattle ProducersMon, 09 Jan 2012 15:33:46 CST
November and December moisture means that some areas of the Southern Plains are in better shape than this time last year, at least as far as soil moisture. Nevertheless, Dr. Derrell Peel with Oklahoma State University says the region is still in drought and it is still very much a question of what the region will look like when the growing season begins in the spring. Recent weather has been moisture free and current forecasts show that dry and warm conditions are expected for the foreseeable future. The current weather pattern appears to be more consistent with the La Niña conditions that are expected according to the latest seasonal drought outlook from the Climate Prediction Center, which indicates a likelihood of persistent drought for the period through the end of March at least.
Producers who sold many or all of their cattle in 2011 are waiting to see if the drought abates in 2012 and should be developing a rebuilding strategy that can be activated in the spring if conditions improve. Significant reduction in drought conditions will likely lead to rapid and strong demand for breeding animals and extremely high prices are likely. Producers need to plan for both forage recovery and cattle market conditions in terms of exactly how and how fast to rebuild cow herds. There will likely not be enough bred cows or cow-calf pairs to meet demand in the region and a slower strategy utilizing stockers to sell or stocker heifers as replacements may be attractive to some producers.
Producers who maintained cows through the winter face even more financial and management challenges in 2012. Many producers with cows are operating with purchased feed and in many cases, minimal supplies to get through the winter. These producers are gambling that the drought will abate and the investment in feed to carry cows through the winter will pay off by having less need to repurchase cows in 2012. There are two parts to this gamble. First, cows that have been nutritionally challenged through much of 2011 and into spring of 2012 are very vulnerable to reduced reproductive performance. It is vital that the investment in feed to maintain cows is done at a level that ensures that cows remain in decent shape to rebreed in 2012. Otherwise, the costs of the drought are merely postponed until later.
The second part of the gamble of holding cows this winter is that the drought may not abate and spring arrives dry like it did last year. In that circumstance, producers will face immediate and critical decisions much earlier than last year. Having already invested in considerable feed, producer will have to decide if more feed is simply throwing good money after bad. Continued drought will no doubt lead to another big round of cow culling and will occur much earlier than in 2011. The need to cull could coincide with spring calving and producers will have few options other than to sell heavy bred cows or cow-calf pairs. Many calves will be too small to early wean as was done in 2011. Producers should develop a plan for the spring now. Evaluate feed and financial resources and determine what alternatives are available and dates at which decisions must be made.
Our thanks to OSU Extension Livestock Market Economist Dr. Derrell Peel for his analysis of the current cattle market. This market analysis is from the weekly Cow Calf Corner- written by Dr. Peel and Dr. Glenn Selk of OSU.
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