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Agricultural News

Derrell Peel Advises Beef Producers to Begin Thinking About Establishing Wheat Pasture for Winter Grazing

Mon, 12 Aug 2019 12:34:45 CDT

Derrell Peel Advises Beef Producers to Begin Thinking About Establishing Wheat Pasture for Winter Grazing 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 advises beef producers on how they should begin to prepare wheat pasture for winter grazing this year.

"At mid-August, some wheat producers are beginning to think about planting wheat for winter grazing. Weather conditions are the biggest factor for early-planted wheat which can begin by late August and into September. An exceptionally hot July followed a wet and cool spring seriously depleting soil moisture by early August. Much of eastern Oklahoma and the north central part of the state have received significant rain in the past two weeks which helps to set up better shallow soil moisture conditions and early fall wheat planting.   Soil temperatures are critical for winter wheat germination with current soil temperatures slightly warmer than ideal but not exceptionally warm. However, temperatures over the next two to four weeks will be critical and additional moisture is needed over the next few weeks for good early wheat stands.

"Producers will also begin watching cattle markets for winter grazing prospects. Itís early to anticipate either fall stocker purchase prices or feeder sales prices next spring. Preliminary budgets suggest modest potential for winter grazing. Fed and feeder cattle markets are subject to much uncertainty about numerous factors, including the corn market situation and feedlot ration costs; continued uncertainty regarding trade and macro-economic condition in the U.S. and world; and beef demand. Current feeder prices suggest a stocker value for added weight gain of $0.95-$1.00 per pound of gain across most weights. This value of gain relationship typically changes seasonally going in to the fall and may help stocker buyers assess a variety of purchase opportunities in the coming weeks.

"Finally, it was reported over the weekend that a large fire will shut down the Tyson Finney County beef plant near Holcomb, Kansas. It is uncertain at this time, how long the plant may be closed or, indeed, if it might remain closed. In the meantime, the loss of 30,000 - 35,000 head of slaughter capacity per week will disrupt both boxed beef and fed cattle markets at least initially and potentially longer depending on the duration of the plant closure. The disruptions will add costs for both fed cattle and boxed beef as additional logistics are needed to adjust flows of slaughter cattle and boxed beef. There are many unknowns for Tyson and the industry going forward including the possibility that this sets the stage for new investment in beef packing. The U.S. has not seen major new beef packing infrastructure for many years.    

"Meantime, cattle markets continue to mark time through the dog days of summer, trying to establish lows and look ahead to fall markets. More typical summer weather may help beef demand through the last grilling holiday of Labor Day. Boxed beef prices have seen some consolidation and recovery recently and may carry additional momentum into the fall."



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