Drought in the Southern Plains Contributed to Larger Than Expected Placements in Latest Cattle on Feed ReportMon, 26 Feb 2018 10:19:52 CST
Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. In today's article, Dr. Peel's looks at drought conditions in Oklahoma as well as a quick review of the latest Cattle on Feed Report from the USDA.
We combine his written analysis with our Monday edition of the Beef Buzz, which comes from the interview that Dr. Peel did with Radio Oklahoma Ag Network Farm Director Ron Hays after the release of the report on Friday. Click on the LISTEN BAR at the bottom of this story to hear their conversation about the latest report.
"A significant change in the weather pattern of recent months brought rain and ice across roughly half of Oklahoma in the past 7 to 10 days. In a diagonal line from just east of Altus in the southwest to Blackwell in the northcentral part of the state, locations received increasing amounts of moisture moving south and east from about one inch along the line to totals over 11 inches in McCurtain county in the southeast corner of the state. This should take a big bite out of drought conditions in the eastern third and south central part of Oklahoma while moderating drought conditions in central Oklahoma.
"The driest areas of western Oklahoma mostly missed out, receiving less than one inch to only a few hundredths of an inch. The nine northwest and Panhandle counties in Oklahoma have now gone more than 140 days with less than one quarter inch of rain. These areas of western Oklahoma and the surrounding region face increasingly severe drought prospects as spring approaches; with a high fire danger in the meantime. It’s uncertain whether recent rains represent merely an aberration or a change in the La Niña conditions that have prevailed all winter. La Niña conditions are expected to fade this spring and this could be an early start to that.
Time will tell.
"Drought conditions in the Southern Plains likely contributed to larger than expected feedlot placements in the latest Cattle on Feed report. Total January placements were 104.4 percent of last year, with Texas up 11.1 percent year over year and Oklahoma up 30.6 percent from one year ago. Feedlots placed 8.6 percent more cattle in the September to January period compared to one year ago. Total feedlot marketings in January were 106.1 percent of one year ago. The February 1 on-feed total was 107.9 percent of last year.
"Limited winter grazing numbers and early movement of wheat pasture cattle to feedlots means that little of the normal March run of wheat pasture cattle will be seen this year in the Southern Plains. Likewise few cattle remain or are likely to be purchased for wheat grazeout. Early placement of feeders in the feedlots means that the short term supply of feeder cattle outside of feedlots is tighter, as reflected in the year over year decrease in the estimated January 1 feeder supply. However, many of the lightweight feeders placed late in 2017 will remain in feedlots until mid-2018. Feedlots are pretty full and will have reduced demand for feeders for some time yet this spring, thus the overall supply-demand balance may not have changed much. Larger feedlot placements in recent months represents a change in timing of feedlot production but not a change in the overall supply situation. In general, while feedlots will not maintain the placement rate of recent months going forward, feeder cattle numbers will be larger in 2018 supporting increased cattle slaughter and beef production."
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