Agricultural News
Stocker Producers Find Themselves in Rare Opportunity to Increase Their Margins of Profitability
Tue, 24 Oct 2017 10:46:47 CDT
It has proven to be a very profitable year so far for most all segments of the cattle industry here in 2017, according to Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel. He explained to Radio Oklahoma Ag Network Farm Director Ron Hays, that feedlots have managed to make substantial profits, which in turn have encouraged profitability among stocker producers. He says even cow/calf producers stand to make a buck, especially if they carefully manage their costs.
"If you look at how well prices have maintained, especially on the light end, the calves and stocker cattle - from a cow/calf perspective, there are producers that are doing a good job managing costs. There is margin there and certainly profitable producers out there," Peel said, and acknowledged how attractive the stocker business looks currently. "Spring feeder futures were offering a very good margin up until now. Really, one of the rare opportunities to see a good margin. In general, the market with larger cattle supplies is encouraging stocker producers to put weight on those lighter weight cattle - feedlots would rather have them a little heavier."
At the same time, Peel believes that the expansion of the beef cow herd has definitely started to slow down. Drawing from the information in the latest Cattle on Feed report out from the USDA, Peel notes that the October On Feed data, being a quarterly report, shows only a two-point spread in the increase of heifers from the last quarterly report in July, up to 13 percent from 11. While this shows continued growth, Peel says it is also indicative that producers are not retaining heifers as aggressively as they were. Still he predicts the cow herd to be larger come January 1, 2018.
"I do think we're still seeing some increase in 2017," he said. "Somewhere, probably in the 1 to 2 percent range."
Listen to Peel and Hays discuss the opportunities for profitability in the cattle markets this fall, 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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