Agricultural News
Peel Says Cattle Producers Making Tough Choices with Great Prices
Mon, 16 Feb 2015 14:24:51 CST
Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel agrees with other economists that 2014 was an incredible year of profitability for all segments of the beef cattle business. At the recent Cattle Industry Convention in San Antonio, Texas, Dr. Peel said beef cow producers are seeing a lot of incentive with these high record prices to step up, hold back females and start that process of rebuilding their mamma cow herd to have more output over the next few years. Dr. Peel said it's going to take some time, but clearly the signals are there after multiple years of drought reduced to the nation's cowherd to historically small levels.
Radio Oklahoma Network Farm Director Ron Hays featured Peel on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
Over the last three years, Peel doesn't think producers have had a liquidation mindset. He think producers they have been ready to expand and were aware of how small the nation's cowherd was, but producers haven't been physically able to grow their herd. Peel believes there is a certain amount of pent up expansion and that's why there has been a rapid transition from liquidation to expansion.
"I think its pretty clear that producers intentions were somewhat different than what the reality was that they had to deal with," Peel said.
Producers are facing some difficult choices in deciding if they want to sell as many head now for those record prices or hold onto more females and rebuild their herd numbers. Peel said that question becomes even more challenging when you throw in the age-dynamic with the average cattle producer in their upper 50's.
"Older producers really have to make that decision for themselves on whether they are in for another go-round here or whether they are going to take advantage of this opportunity to get out and then implement that and that's really key," Peel said.
From an industry standpoint, Peel said in terms of the big picture it doesn't matter who is doing the herd expansion, it's more important that herd expansion is taking place.
"But for the individual producers, very much a question of whose going to do it," Peel said. "So, depending on how that plays out, that can have an impact on the overall productivity and really the speed with which things happen in this industry over the next few years."
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also 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.
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