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Agricultural News


Derrell Peel Explores Fall Feeder Cattle Marketing Options

Mon, 12 Aug 2013 15:59:13 CDT

Derrell Peel Explores Fall Feeder Cattle Marketing Options
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow-Calf newsletter:


Oklahoma feeder cattle prices have increased about $20/cwt. for all weights since the lows in late May. After being on the defensive much of the first half of the year, feeder cattle markets are poised to hold stronger in the second half of the year. Good prospects for a big corn crop and corn price relief combined with significantly improved forage conditions is being reflected in stronger feeder prices and open up more marketing options for cow-calf and stocker producers.


Calf prices are currently about $25/cwt. higher than this time last year. In 2012, calf prices increased $20-22/cwt between August and November. Some of the increase in calf prices that occurred between August and November of 2012 has likely already happened this year.   Basis for lightweight feeders continues to be relatively strong compared to Feeder futures. An average basis and the current Feeder futures price would indicate that 500 pound steers in OKC would be at least $172/cwt. in November but the current strong basis suggests that the price could be $180/cwt or higher this fall. Both the current cash market and the Feeder futures suggest that cow-calf producers should expect calf prices that are $10-15/cwt. higher than last year in November.


The recent increase in feeder cattle prices has significantly increased the value of additional weight gain for feeder cattle. The most recent combined Oklahoma auction prices reflect a stocker value of gain between $1.05 and $1.15/pound for all combinations of beginning weight and gains of 50-350 pounds. This suggests that cow-calf producers have an opportunity to improve calf value even more with preconditioning or retained ownership. It is an alternative that cow-calf producers should consider relative to available feed resources, management and labor constraints. The improved value of gain suggests that stocker producers have strong fall and winter grazing opportunities despite higher purchase prices for stocker calves this fall. Current moisture conditions have Oklahoma set up for the best fall and winter grazing prospects in several years. Whether selling weaned calves, retaining raised calves or purchasing stockers, the feeder market is offering generally strong revenue potential for most producers.



   

 

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