Peel Looks Back at 2014 Record Cattle MarketFri, 05 Dec 2014 12:16:17 CST
The cattle market has been hot market in 2014. The year started at record levels and have gone up from there. Oklahoma State University Extension Livestock Marketing Specialist Dr. Derrell Peel said the cattle market will also end the year at record levels in terms of prices.
"So, it's been a substantial increase in prices this year," Peel said. "The big driver of course is the supply side. Beef production is down about six percent so far this year. Slaughter is down over seven percent, so those tight supplies are really coming to bear in this market and will continue into 2015."
Radio Oklahoma Network Farm Director Ron Hays featured Peel on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
Cattle numbers and in turn beef supplies will continue to be tight for the upcoming year. Peel said cattle numbers remain down in a longterm sense and there isn't much that can be done in short run. While herd rebuilding began in 2014 but he said it will take a couple of years before progress shows up in terms of increased beef production. As ranchers hold back heifers, this squeezes supplies even tighter and prices continue to move higher.
In the short run the only thing producers can do is increase carcass weights and right now the market is saying it will pay for more pounds creating an opportunity for feedlots and packers to get more pounds out of each animal that is processed. Peel said right now steer and heifer carcass weights are at record levels. That creates very large cuts of meat, which in some cases runs counter to what consumers prefer today. Peel is cautious about producers pushing weights to much as that could create some demand problems.
The beef industry often debates how big is too big in terms of carcass size and weight. With carcass weights getting heavier there is a quality vs. quantity trade off. Peel said there is an incentive for cattlemen to feed cattle to heavier weights but there are limits as to how far producers can push those increases in terms of quality grading as well as having larger carcasses, which can result in discounts from packers. He said at the farm level quantity is the short run view, but over the longer term the industry may see some quality implications.
In looking at the global outlook, record US cattle and beef prices are impacting US beef exports. Peel said levels are being moderated, although the year will finish close to 2013 levels. Looking ahead Peel anticipate a slight decrease in export levels in 2015.
Imports will continue to remain strong for the coming year. Peel said the US continues to demand processing beef because of the strong demand for ground beef. He said there has been significant jump of beef imports and that will continue into 2015. Live cattle imports will continue to be an important component. Peel said the US imports a lot of feeder and fed cattle from Canada and Mexico. Record prices in the US are attracting cattle a lot of cattle out of Mexico He said imports numbers were higher this year than in 2013, but numbers are moderating. Peel said Mexico is beginning to run out of cattle and supplies are very tight. So even the pull from high market prices will be limited for the next few months.
Looking ahead the market signals are very strong for the state's cow-calf sector. Peel said cattle numbers will have to increase as the given level is too small to meet consumer demands, so market incentives continue to grow in terms of calf prices encouraging producers to grow there herd numbers as soon as possible, but that will be a slow process at best. For cattlemen to continue to grow there herds, mother nature will also do her share in providing some assistance.
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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