Livestock Economist Derrell Peel Says Market Signals All Pointing to Stocker Opportunities This FallWed, 15 Aug 2018 11:21:57 CDT
It’s a little early to be getting grass fever but the cooler, wetter conditions of late are beginning to green up pastures here across the Southern Plains. Oklahoma State University Extension Livestock Market Economist Derrell Peel told Radio Oklahoma Ag Network Farm Director Ron Hays this fact may be behind the stronger calf prices that are being seen in our regional markets. Peel talked recently about the opportunities he sees playing out this fall in the cattle industry for stockers and cow/calf producers.
“If you look across the board from light to heavy weight prices right now in Oklahoma, and I think in the Southern Plains generally, are running about four to five percent above this time last year,” Peel said. “That’s pretty remarkable given that we know there’s ample supplies of feeder cattle out there and a bigger calf crop - a bunch of which will come to town here in the fall during our fall calf run.”
From a cow/calf producer’s perspective, Peel says the market typically experiences a steady four to five percent decline in price beginning in August down to an October low. Certainly, he says, there is enough supply pressure for that to happen this year. However, if the physical conditions play out and good wheat pastures are established - this could spur increased demand for stocker cattle. If that happens, then depending on how the price relationship between stockers and feeders holds out through the fall, Peel says there could be an opportunity to profit this year in the stocker sector - which may entice cow/calf producers to retain ownership of their calves until they reach a heavier weight past weaning. According to Peel, his early observations of the current physical and market conditions seem pretty attractive, enough for him to predict many producers getting on board with this strategy when the time to make decisions arrives.
“Right now, the volume of gain is quite a bit higher than the feedlot cost of gain, which is a way saying there’s plenty of cattle out there. Feedlots can buy what they want which is typically bigger feeder cattle and they’re willing to let the stocker industry have the additional value of gain to put on those lighter weight cattle,” he said. “So, I think there may be a real opportunity here.”
Listen to Derrell Peel and Ron Hays discuss the potential opportunities for this fall taking shape in the stocker markets, 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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