Peel Responds to the Cattle Market DownturnFri, 25 Sep 2015 14:36:20 CDT
It's been another down week for the cattle markets with lower wholesale boxed beef trade, slaughter cattle prices under pressure, yearling prices and calf prices have also been on the downside. Plus, there's a lot of volatility in the stock market. In looking at the outlook for the fourth quarter of 2015 into 2016, Oklahoma State University Extension Livestock Marketing Specialist Dr. Derrell Peel said the fed cattle markets are reflecting big picture issues, as well as an abundance of heavy weight cattle that are bringing down the market.
"Feeder cattle markets been largely brought down by the bearish psychology and the uncertainty in the market and I do think some of that will stabilize and we'll probably see some recovery in feeder cattle prices a little bit, particularly in the Southern Plains," Peel said.
The Southern Plains region has pretty good prospects for wheat pasture. As long as the crop emerges and has a good stand, Peel said there is going to be significant stocker cattle demand, which will support calf prices. For stocker producers, he said this creates a buying opportunity and they should take advantage of this weakness in the market over the next two to four weeks. For cow-calf producers, he said they might wait a little longer for more recovery to take place.
"So, they probably don't want to be in a real big hurry and kind of wait and see if this market does come back a little bit from the current lows," Peel said.
Cattle markets have been influenced by a combination of macro-factors, along with increasing carcass weights. One aspect that is helping keep supplies tight is continued herd expansion, as producers hold back heifers. Peel said the nation remains in the midst of aggressive herd expansion, so heifer slaughter for the year is down 12 percent. That's much larger decline than steer slaughter. The next quarterly cattle on feed report comes out in October and it will gauge the number of heifers and steers in feedlots.
"I think it will confirm again, that we are continuing to hold heifers out of the feedlot and save them for breeding," Peel said.
The U.S. Department of Agriculture will release the annual U.S. cattle inventory report in January 2016. That will show many heifers have been held back, the rate of herd expansion and the size of the overall U.S. cattle herd.
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.
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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