Peel Analyzes Supply and Demand of Cattle MarketFri, 20 Mar 2015 13:05:16 CDT
The first quarter of 2015 is almost behind us and it appears cattle prices have stabilized quite a bit lately after some wild swings in late 2014. Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel said beef demand has been limited this winter.
"That's causing some of the squeeze in the market right now," Peel said. "Boxed beef prices have been pretty stable over the last month or so. As have fed cattle prices, at the same time feeder cattle prices some increased a little bit."
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.
Right now there are competing forces. Peel said tight beef supplies continue to support cattle prices, but there is also increasing supplies of pork and poultry that are weighing on the market. He said that makes it hard for boxed beef wholesale and retail values to continue to move up, as they need to relative to the supply situation on the beef side.
Obviously, supplies are tight right now. One of the reasons for the tightness is the aggressive rebuilding of the U.S. mamma cow herd, including in the Southern Great Plains. Peel said Oklahoma has seen a pretty remarkable recovery from the drought liquidation with two consecutive years with about a six percent increase. Texas added about seven percent more cattle last year, while New Mexico hasn't begun to grow because it remains fairly dry.
"The bottom-line is we have recovered some over the last couple of years. "We've got about a million head more cattle needed in Texas, Oklahoma and New Mexico to be at the level we were at the beginning of 2011. So we've still have a long way to go to fully recover from the drought liquidation."
In looking back to the most intense drought years in the Southern Great Plains in 2011 and 2012, many producers moved cattle to other regions for pasture resources, so those cattle genetics were not lost. Peel said many of those mature cows that were moved out of state will probably not return, as they will finish out their productive years at their current location. He said as those animals were sold off, they will replaced with heifers that will come back to the Southern Great Plains. That is taking place on some of the western Texas operations, but everyone remains cautious as herd rebuilding will take time.
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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