OSU's Derrell Peel Says Big Opportunities Are Instore for Producers Who Hold onto Cattle LongerThu, 12 Aug 2021 10:56:40 CDT
Today’s report, from the 2021 Cattle Industry Convention in Nashville, Tennessee, is a service of Farm Data Services of Stillwater.
Extension Livestock Management Economist at Oklahoma State University Derrell Peel is in Nashville, enjoying facetime with his colleagues, other industry leaders and the media.
“(The convention) is a great chance for us to figure out where we need to be, relative to what the industry is thinking and what the issues and concerns are,” Peel said.
So far, Peel is seeing a fair amount of optimism among market analysts at the convention.
“2021 has been a tale of two halves,” Peel said. “The first half of the year has been a struggle… but we’re turning a corner - particularly in the fed-cattle market.”
He said high feed prices are going to stick around for the foreseeable future, but the way the market responds to those higher prices brings an opportunity to producers who may want to think about retaining their calves.
“(High grain prices) provide an incentive to put more weight on cattle before they go to the feedlot,” Peel said. “We’re seeing values of gain that are increasing, which provides more opportunities for both stocker producers and cow-calf people.”
Peel said it’s the time of year he begins looking at budgets for the coming year and early indications show real opportunities for more stocker-type production.
He and his colleagues are also watching the drought situation in the west, which could affect the industry for years to come. In Oklahoma and Texas, pasture conditions are good, which offers additional opportunities for producers in those states, according to Peel.
At the end of the day, Peel said some cow-calf producers will make good money while some will break even. The low-cost cow-calf producers are in the driver’s seat, according to Peel.
The 75% Plan
Peel said he believes the plan is effective so far but hasn’t changed things a great deal so far.
“It’s important for everyone to keep in mind that price discovery is not the same thing as price determination,” Peel said. “Better price discovery doesn’t mean you’ll get higher prices.”
Peel said, either way, things seem to be improving. From interactions he’s had at the convention so far, he thinks folks are optimistic.
To read the Oklahoma Farm Report story on The 75% Plan, click or tap here.
Click or tap the LISTEN BAR below to hear Ron's conversation with Derrell Peel.
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