Agricultural News
To Graze or Not to Graze Cattle, That is the Question
Wed, 12 Oct 2016 12:13:03 CDT
The big question for producers right now is whether or not any money can be made this fall and winter, grazing cattle out on wheat pasture. Oklahoma State University Livestock Market Economist Dr. Derrell Peel has advocated that the potential for profitable margins for producers using this strategy since late summer. However, several factors are causing him to be less confident about his hypothesis. Farm Director Ron Hays reached out to Dr. Peel to find out why. He attributes the fact that there are simply too many unknowns yet to be answered, given the many uncertainties in the cattle market at this time.
"Despite the fact that we got off to a pretty early jump on wheat planting and early emergence of wheat, I think the demand for wheat pasture cattle has been slower to develop," Peel said, citing possible fears like wheat crop failures due to Army worms, for instance. "I think the bigger problem of course is just that the beef market and feeder cattle market in particular, has really been running scared for the last couple months."
Dr. Peel says because of all this, producers are approaching things very cautiously, waiting to see how the market develops. He insists that confidence would bolster if the market were to find a bottom, potentially ushering in a fair buying opportunity. As of now though, producers and their lenders both seem to be waiting; nervous about jumping in too quickly.
"One of the challenges right now is just to do the budgeting on where wheat grazing will turn out," Peel said. "I think if you look at today's price relationship for feeder cattle, it would suggest there's a pretty good value of gain offered in the market right now. But it's hard to take the sale part of that margin equation out to the end and know exactly what to expect for it."
Listen to Dr. Derrell Peel explain his position on whether or not there will be an opportunity to make money this winter, grazing cattle on wheat pasture with Farm Director Ron Hays on today's Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is 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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