Derrell Peel: Indications of Herd Expansion Continue to StrengthenMon, 05 May 2014 17:00:09 CDT
Stocker and feeder cattle prices remain sky high presenting a dilemma to cow calf operators: do you sell heifers now and take the profit, or do you hold on to them to rebuild the herd in hopes prices will remain high into the future?
Oklahoma State University Extension Livestock Marketing Specialist Dr. Derrell Peel says in the latest Beef Buzz that this is not a new problem and has been with us for some time.
"I think that's sort of a classic problem that's been at the root of every herd expansion in the beef industry for a lot of years. In the early stages of that as prices start to go up, producers have this tradeoff between the immediate value of selling that heifer versus the investment value of that heifer for future production."
Peel says it's a question of timing. He says when producers become convinced that prices will hold, they opt to keep the heifers and expand their herds. He says indications are now pointing to producers holding back more heifers to do just that.
Peel says that heifer inventory at the beginning of the year was two percent over a year ago and placements of heifers in feedlots are down for the second quarter in a row. Heifer slaughter this year is also down about 8.5 percent, indicating further herd expansion. Added to that indicator is the fact that beef cow slaughter is also down year over year.
"So, with reduced cow slaughter, increased heifer retention, I think we're probably following through with some level of herd expansion plans so far this year."
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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