Cattle and Beef Markets Find Some FootingMon, 04 Mar 2013 12:05:17 CST
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow-Calf Newsletter:
Cattle and beef markets weakened throughout January and February as a combination of weak demand and looming drought weighed heavily on feeder, fed and boxed beef markets. Beef demand has no doubt been negatively impacted by a series of storms, dating back to Hurricane Sandy, which impacted population centers in the northeast. Choice boxed beef dropped from roughly $194/cwt. in early January to a late February low of $182/cwt. Fed cattle likewise dropped from $128/cwt. at the beginning of the year to a recent low under $122/cwt. Oklahoma prices for both stocker calves and heavy feeder cattle dropped through February as well.
However, market conditions appear to be improving in several different areas. Low boxed beef prices finally spurred sales and combined with recent slaughter reductions and decreasing carcass weights to push Choice boxed beef prices up to $188 by Friday, up over $5/cwt. from the previous Friday. Fed cattle prices also jumped last week buoyed by stronger boxed beef prices and winter storms that disrupted cattle shipments and caused production losses and increased death loss in central and southern plains feedlots. The winter weather impacts will likely continue for several weeks. During the same time feedlot supplies should be tightening as a reflection of the limited placements in the second half of 2012. Fed cattle prices should be strongly supported well into the second quarter of 2013, with the key being boxed beef prices depending on stronger consumer demand.
Feeder cattle markets, also disrupted by winter weather, remained weak last week but are expected to bounce back soon. Recent moisture in Oklahoma significantly improved the immediate drought situation and will likely stabilize feeder markets. Though much more moisture is needed to eliminate the drought, the assurance of initial moisture to begin forage growth is a great help to cattle producers. Cool season grasses and winter wheat are already responding to improved moisture with new growth. Water concerns remain high as little pond recharge has occurred thus far. The recent moisture is only a small deposit on what is needed to fix the drought but it is a start and that is encouraging for producers.
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