Peel Says Cattle Market Fundamentally StrongFri, 24 Oct 2014 19:10:32 CDT
Cattle producers continue to pinch themselves thinking they might wake up and these high cattle prices might disappear. Oklahoma State University Livestock Market Economist Dr. Derrell Peel said we are in a extraordinary time in the cattle business and cattle prices are mighty high.
"Calf prices are extraordinary this fall, they've actually not dropped at all seasonally," Peel said. "In general we're talking about $1,500 a calf roughly speaking for cowcalf producers this fall. That's $500 - $550 more than this time last year of just additional revenue."
Radio Oklahoma Network Farm News Director Ron Hays featured Peel on Friday's Beef Buzz. You can hear the full feature by tapping on the LISTEN BAR below.
With cattle prices hundreds of dollars higher per animal above a year ago, producers have to wonder if this will last. Even though the industry has been talking about the nation's shrinking cattle herd numbers for several years, Peel said producers get really nervous at these prices
"They wonder if in fact this is a very short run phenomenal that is going to bust anytime," Peel said. "So that leads to some questions how to market these calves this fall."
Peel has heard some producers are weaning calves several weeks earlier than normal because they are worried something dramatic could happen to the markets in the short term. He said producers need to understand that it took a while to get to this point where we are starting to see these explosively higher prices than a year ago. Peel looks for these strong prices to continue for a while.
"My expectation for the general peak in this thing is probably at the very earliest going into 2016," Peel. "So I think we are a year to a year and half away from the peak. The backside, I don't look for a sharp crash even then."
Cattle producers still have to wonder if they should hang onto their females, build your herd or sell everything you got. Peel said in general he finds there is a lot of interest in heifer retention, but a lot of things depend on a producer's perception of the situation.
"If a producer really doesn't believe this thing is sort of for real and its going to last for any length of time, then your temptation is certainly to sell everything you can sell at these prices," Peel said. "I think these markets are fundamentally strong. I think there are sound reasons why we are, where we are. So I think for a lot of producers we are going to carry through these retention plans . In fact these are prices I would argue are the markets way of really emphasizing the fact that we really do need to rebuild. So the market is sort of upping the ante on the rewards for doing that as we go forward."
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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