Cattle markets, wheat planting on beef producer minds for fall
Thursday, August 15, 2019
The doldrums of the so-called “dog days of summer” are upon us, and like many people, the cattle markets appear to be looking ahead to fall.
“Hopefully, the more typical summer weather we’re seeing after a couple of crazy weather months earlier will help beef demand through the last grilling holiday of Labor Day,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.
Peel added boxed beef prices have seen some consolidation and recovery recently, which hopefully will carry additional momentum into the fall.
“At mid-August, some producers are beginning to think about planting wheat for winter grazing,” he said. “Weather conditions are the biggest factor for early-planted wheat which can begin by late August and into September.”
The exceptionally hot July that followed a wet and cool spring seriously depleted soil moisture by early August. Still, much of eastern Oklahoma and the north central part of the state have received significant rain in the past few weeks. This should set up improved 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,” said Rick Nelson, OSU Cooperative Extension agricultural educator for Garfield County. “Temperatures over the next month will be critical and additional moisture is needed over the next few weeks for good early wheat stands.”
Many cattle producers also are watching the markets for winter grazing prospects. Although it is a bit 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 uncertainty relative to a number of factors: The corn market situation and feedlot ration costs, continued uncertainty regarding trade and macro-economic conditions in the United States and world, and beef demand.
“Current feeder prices suggest a stocker value for added weight gain of 95 cents to $1 per pound of gain across most weights,” Peel said. “Producers need to be aware because 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.”
In addition, a large fire has caused a shutdown of the Tyson Finney County beef plant near Holcomb, Kansas. It is uncertain at this time how long the plant may be closed or even if it might remain closed. In the meantime, the loss of 30,000 to 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 Tyson 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,” Peel said. “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 United States has not seen major new beef packing infrastructure for many years.”
Oklahoma-based cattle production is a $3.7 billion annual industry for the state. Oklahoma is the nation’s second-leading producer of beef cows and fourth-leading producer of total cattle and calves, according to USDA National Agricultural Statistics Service data.
The Oklahoma Cooperative Extension Service is one of two state agencies administered by OSU’s Division of Agricultural Sciences and Natural Resources, and is a key part of the university’s state and federally mandated teaching, research and Extension land-grant mission.