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

advertisements
   
   
   
   
   
   
   

Agricultural News


Has the Cull Cow Market Reached Its Bottom for the Year Yet? Maybe, But It is Difficult to Say

Mon, 03 Dec 2018 11:12:35 CST

Has the Cull Cow Market Reached Its Bottom for the Year Yet? Maybe, But It is Difficult to Say 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 difficulty the cull cow market is having lately at finding a bottom and the reasons behind it.


"The cull cow market likely reached a seasonal low in November but it has been difficult to understand this market this year. Prices for Breaker cows in Oklahoma City averaged $50.13/cwt. in November, nearly 11 percent lower year over year, while Boning cows averaged $47.88/cwt., over 16 percent down from one year ago. Cull cow prices have been counter-seasonally lower year over year from May through October and have averaged 13-15 percent lower year over year for the last seven months.



"Cull cow prices typically begin a slight recovery in December following the November seasonal low. Cull prices average a much stronger seasonal increase after January 1, increasing by 6.7 percent in January from the November low; with February up 16.2 percent; March up 18.75 percent; April up 19.6 percent and May up 21.1 percent all from the November low.   From current levels, this would suggest breaking cow prices of $53.47/cwt. in January; $58.26/cwt in February; $59.53/cwt. in March; $59.94 by April and $60.85/cwt. by May.



"The question is whether the normal seasonal price increase can be expected given how weak the cull cow market has been since May of this year. One of the big factors contributing to weak cull cow prices has been weak cow boxed beef prices in the second half of 2018. In the last week of November, cow boxed beef prices were 7.8 percent lower than year earlier levels and have averaged 8.3 percent lower year over year since mid-year.



"Increased supplies of cow beef is no doubt part of the cause for lower cow beef (and cull cow) prices. Total cow slaughter is projected to be up 7.2 percent in 2018 over last year, with a projected 9.6 percent year over year increase in beef cow slaughter and 4.9 percent increase in dairy cow slaughter. This is higher than the 2017 year over year increase of 6.3 percent in total cow slaughter.   Total cow slaughter in 2019 is forecast to be flat to slightly lower year over year and should reduce the supply pressure a bit following three years of increasing cow slaughter. Beef imports, the bulk of which are processing beef that compete with cow beef, have been flat in 2018 and are forecast to decrease 3-5 percent in 2019.



"While overall beef demand has been strong in 2018, the demand for cow beef is more uncertain. The bulk of cow beef is used for ground beef. It is possible that ground beef demand is facing more pressure from large supplies of pork and poultry compared to beef middle meats. Cow beef (90 percent lean) is mostly used to mix with fed trimmings (50 percent lean) to make the appropriate ratio of lean to fat in ground beef. Fed trimmings prices have remained close to year ago levels in contrast to the weakness in cow beef prices. Increased fed slaughter in 2018 and forecast larger slaughter again in 2019 would seem to suggest ample fed trimmings supply to support cow beef prices. However, growing exports of some fed products, such as navels, that historically were part of fed trimmings may be the reason for stronger fed trimmings prices relative to cow beef prices.



"With all that said, I expect that a relative tightening of cow beef supplies will help cull cow prices to follow close to a normal seasonal increase going into 2019. Like all beef markets it is dynamic and evolving and bears watching in the coming months."




   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Oklahoma Farm Bureau's Rodd Moesel Talks About the Importance of the Passage of USMCA   Fri, 24 May 2019 17:47:29 CDT
  • OSU's FAPC Explains How to Ensure Food and Beverages are Safe to Consume After a Flood  Fri, 24 May 2019 16:21:27 CDT
  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m. Friday, May 24, 2019   Fri, 24 May 2019 16:11:28 CDT
  • Oklahoma Cattlemen’s Foundation Launches a Flood Relief Fund for Cattlemen Affected by Flooding  Fri, 24 May 2019 16:01:15 CDT
  • Placements End Up Being Friendly in the May First Cattle on Feed Report- Dr. Derrell Peel Offers His Analysis  Fri, 24 May 2019 16:35:07
  • Governor Stitt Signs General Appropriations Bill for FY2020, Including $3.29 Million for Ag, Rural OK  Fri, 24 May 2019 14:39:53 CDT
  • Friday Afternoon Market Wrap-Up with Carson Horn  Fri, 24 May 2019 14:21:45 CDT
  • OK's 2019 Legislative Session Wraps Up, OKFB's Steve Thompson Recaps on Ag's Many Victories  Fri, 24 May 2019 14:45:08 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Herbs Herb Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit P&K Equipment Tulsa Farm Show AFR Insurance 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.