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Cattle Market Watcher Derrel Peel Previews This Friday's Cattle Inventory Report

Tue, 28 Jan 2020 06:45:20 CST

Cattle Market Watcher Derrel Peel Previews This Friday's Cattle Inventory Report

USDA will release their January First Cattle Inventory report this coming Friday, January 31st. One of the key parts of that report each year is the size of the US Beef Cow Herd.

Radio Oklahoma Ag Network Farm Director, Ron Hays, sat down with Dr. Derrell Peel, Livestock market economist at OSU, to talk about what he is expecting to see in the report, "We'll be doing two things; We'll be confirming sort of what happened last year. If we look at the year to year comparison, specifically in the beef cow herd, because that's going to determine the supply of cattle coming at us as we think ahead in the coming months. The other thing is, we'll be looking at that replacement heifer category because that's going to give us an idea of kind of what intentions are for the coming year. I do expect that replacement heifer number to be down ó indicating that we are not retaining very many heifers that would support expansion. Now again, I don't feel at this point that we're in a significant herd liquidation. There would be a range of opinions about that, that it might be a little bigger than that, but it looks to me like we're just kind of in a station-keeping mode here right now, with these herd numbers. At a plateau and probably maintaining that at least for this year 2020."

Peel also believes that cattle prices are going to improve a little bit in 2020, "We're off to a fairly strong tone so far. Now futures market this last week had some issues on the feeder cattle side in particular, but the cash markets have been pretty strong. You know we're running at about the same place we were this time last year for feeder cattle levels. Depending on whether you look at calves or the bigger feeder cattle, but pretty close to year-ago levels. We struggled a lot in the second half of 2019, and I feel pretty comfortable with the idea that we're going to be significantly higher than year-ago levels by the time we get to the second half of this year."

With all of the wildfires in Australia and the current drought situation they have faced, Peel says the estimates for Australia's cattle herd in 2020 is probably going to be at a 30 year low, which will restrict their ability to maintain beef production, and export beef. Peel says this will have some impact on the US beef supply, "I do think it will probably change things a little bit in our ground beef market, and it's not just Australia. The other thing that's driving the global beef market train now, of course, is the tremendous growth in beef imports in China. That's going to be stepped up in 2020, with additional protein needs because of the reduced pork production from African swine fever. China is responsible now for diverting a lot of beef flows from major exporting countries around the world, so Australia, New Zealand, Brazil, Uruguay, Argentina are all sending more beef to China. Some of those Australia- New Zealand, in particular, places that have historically supplied a lot of lean to the US market, we probably will see less of that. Our cow slaughter is higher now because we are at cyclically large numbers, so that offsets some of that, but it means that we're going to change at least some of the sourcing, and some of the flows of product. It may squeeze our lean market a little bit, our trimmings market, and that should help our cull-cow prices as we go forward from here. We haven't seen that yet, but I think it will happen here in the next few weeks."

Click on the LISTEN BAR below to hear the complete interview with Derrell Peel as he talks With Ron Hays.

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.


Ron hays Beef Buzzes with Derrell Peel Ahead of the Cattle Inventory Report from USDA
right-click to download mp3


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