OSU's Derrell Peel Says Cattle Markets Looking Solid as We Approach the Middle of 2019's Fourth QuarterMon, 11 Nov 2019 06:59:53 CST
Fire at the Tyson beef packing plant in early August shut that facility down causing prices to go down sharply- even as Boxed Beef Prices went up sharply, and then eventually retreat. Ron Hays sat down to talk markets, and cattle prices with Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel- Hays catching up with Dr. Peel on the sidelines of the Oklahoma Cattlemen's Association Quarterly Board Meeting.
Because of the shock of the fire, cattle prices went down substantially, but have now recovered from the lows after that fire. The Good news is that beef and cattle prices look solid and strong in the aftermath of that shock. Peel remarks, “You know across the board the entire cattle and beef complex has really had a remarkable run since mid-September. We’ve had a tremendous run in cash markets, futures markets, feeder cattle, fed cattle, and the boxed beef market.”
We are in the middle of the fourth quarter now, so what does 2020 look like for the markets? Dr. Peel says we may have leveled out, or possibly plateaued on the mama cow numbers. “I think the inventory has plateaued. I’m basically expecting the January 2020 cattle inventory numbers to be plus or minus unchanged. They could be either way slightly, but I don’t look for a major change in either one of those.”
Going forward if producers want to get the highest yield for their cattle, Peel says they are going to have to do some homework. Peel mentions that the cattle industry has always struggled with the idea of balancing a commodity oriented system, which from a cost standpoint Is more efficient, against the reality that cattle and the meat products they produce are ultimately very different products, and those products have very different value potentials. “So what we are trying to do is find ways to capture more of the additional value of cattle and those products that come from those cattle and still benefit from the cost efficiencies of the commodity kind of way we manage cattle in much of our system.”
One of the most important ways to get a higher value for calves is wean time. Right now, the minimum wean time is 45 days for many of the preconditioning programs, but more and more- buyers prefer 60 to 120 days. Peel mentions “What we are seeing more of in the industry from the buyers stand point is that they really prefer 60 days minimum, and I think we are probably moving toward a norm like that.” Part of the reason for later weaning is because cattle producers still struggle with respiratory disease issues. Peel adds “This is one way for the buyers to enhance that a little bit and minimize some of those impacts”
Click on the LISTEN BAR below to hear more from Dr. Daryl Peel as he talks with Ron Hays in today's Beef Buzz.
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