Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211


Agricultural News

OSU's Derrell Peel Says Time to Pencil Profit Potential for 2018-19 Wheat Pasture Opportunities

Tue, 04 Sep 2018 06:07:06 CDT

OSU's Derrell Peel Says Time to Pencil Profit Potential for 2018-19 Wheat Pasture Opportunities 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. Today, Dr. Peel takes a look at the 2018 winter wheat grazing prospects.

Oklahoma producers interested in dual-purpose or forage-only wheat for winter grazing often prefer to plant winter wheat in early to mid-September if conditions permit. For grain-only, winter wheat is typically planted mid to late October. Conditions are generally favorable for early wheat planting this year in Oklahoma. Wheat planted before the end of September can be ready for grazing by November 1 and allow for 120 days of winter grazing by early March and still permit harvesting wheat grain as a dual-purpose crop.

Stockers for winter grazing may be purchased over the next six to eight weeks. Timing of purchases will depend on expected availability of wheat pasture and the ability to receive and utilize other feed resources to hold stockers until wheat pasture is ready. Producers may be looking to buy stockers weighing from 450-600 pounds depending on a variety of factors but 475 pound steers are very commonly demanded for winter grazing. The availability of wheat pasture often coincides with seasonal low purchase prices for stockers. Typically, prices for stockers will decrease through September to seasonal lows in October. For example, 475 pound, Medium and Large, Number 1 steers in Oklahoma averaged about $170/cwt. in August and are expected to drop seasonally about 4.5 percent to October suggesting a price of roughly $162-$163/cwt. Heavier stockers over 550 pounds may drop 5.0 to 5.5 percent from August to October.

Feeder futures provide another means to estimate purchase price in October. October Feeder futures are currently around $149/cwt., showing little seasonal decline from August and September. With normal October basis for 475 steers of roughly $25/cwt., current October Feeder futures price would suggest an October cash price of $174/cwt. for 475 pound steers, roughly $10 -$12/cwt. over the projection above based on cash price seasonality. However, basis has been weaker than usual recently for lightweight feeder cattle suggesting that October prices for 475 pound steers will be lower than $174/cwt. Taken together, the cash seasonal and futures price projections suggest that the price of 475 pound steers (Medium/Large, Number 1) in Oklahoma is likely to average $163-$168/cwt. for an October low. Exceptionally good wheat pasture demand could hold prices at the upper end of the range or higher while any delays in wheat pasture development could allow prices to drop to the low end of the range or below.

Profitability of winter stockers will depend on numerous budget factors including purchase price, length of grazing period, rate of stocker gain, wheat pasture cost and, of course, selling price in late February or early March. The current March Feeder futures contract price is $145-$146/cwt. This implies an Oklahoma price for 750 pounds steers in early March of $146-$148/cwt. given an expected basis of roughly $1.50/cwt.   Budget assumptions can vary widely but this appears to be a price that more than covers breakeven cost of production for winter grazing. Producers should develop and evaluate budgets which reflect their particular situation. It may be that current futures prices offer an opportunity to protect a decent margin for winter grazing programs.

Source- Cow Calf Corner Electronic Newsletter- Oklahoma State University Division of Ag   



WebReadyTM Powered by WireReady® NSI


Top Agricultural News

  • ITC Report Underscores Importance of NAFTA and Passing USMCA for US Agriculture  Fri, 19 Apr 2019 07:54:48 CDT
  • NCGA Statement: International Trade Commission Report on USMCA  Fri, 19 Apr 2019 05:45:25 CDT
  • Farmers for Free Trade Statement on U.S. ITC Report on USMCA   Fri, 19 Apr 2019 05:34:47 CDT
  • Governor Kevin Stitt Signs Oklahoma's Commercial Hemp Bill SB 868 Into Law  Thu, 18 Apr 2019 17:25:21 CDT
  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m. Thursday, April 18, 2019  Thu, 18 Apr 2019 16:02:14 CDT
  • Study Shows US Pig Farmers Have Made Major Sustainability Progress Over the Last 55 Years  Thu, 18 Apr 2019 14:21:39 CDT
  • Thursday Afternoon Market Wrap-Up with Carson Horn  Thu, 18 Apr 2019 14:11:48 CDT
  • February Exports Fall Below Year-Ago Levels for Both US Pork and Beef in Latest USMEF Report  Thu, 18 Apr 2019 12:19:34 CDT

  • More Headlines...


    Ron salutes our daily email sponsors!

    Herbs Herb Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit P&K Equipment AFR Insurance Oklahoma City Farm Show Stillwater Milling KIS FUTURES, INC. Oklahoma Cattlemen's Association

    Search OklahomaFarmReport.com

    © 2008-2019 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.