Beef Buzz News
If You Buy Calves for Fall Pasture This Year- The Smart Buy is to Go Heavy- Derrell Peel
Mon, 03 Sep 2012 10:32:36 CDT
The smart buy this fall- if you decide to try to buy some cattle to run on fall pasture- wheat pasture or otherwise- is to look at heavier weight stockers instead of lighter stockers that many cattle producers traditonally like to buy for wheat pasture. OSU Extension Livestock Market Economist Dr. Derrell Peel opined on that last Monday in his weekly market analysis that is seen here at the OklahomaFarmReport.Com- here's the relevant part of what he wrote a week ago as we hit September and start thinking about fall cattle purchases.
"The 2012 drought reduced feeder prices this summer with impacts expected to continue until next summer due to high grain prices. Lightweight calf and stocker prices dropped sharply through July but have bounced back strongly in the past two weeks. Four-weight steer prices in Oklahoma have increased about $15/cwt. since the end of July. Heavy feeder prices dropped less than calves but have recovered only about $4/cwt. in the past month.
"The result is a feeder price pattern that has again developed the increasingly familiar bent shape reflecting sharp price decreases from calves to middle weight feeders then small price decreases from middle weights to heavy feeders. This past week, Oklahoma steer prices indicated a $39/cwt. price decrease from 425 pounds to 625 pounds but only a $3.50/cwt. price decrease from 625 pounds to 825 pounds. This feeder price pattern is consistent with the small feeder inventories that keep calf prices high combined with high grain prices that force a high value of gain and encourage more weight on feeders prior to feedlot placement.
"If the current price patterns persist, the traditional four-weight steer has a very low value of gain for the first two hundred pounds of gain that is only partially overcome if the animal is grown to heavy feeder weight. By contrast, a heavier beginning weight of 575 to 625 pounds has a value of gain well over a dollar a pound from the beginning of stocker production. With typical winter gains, these animals will be marketed from 800 to 850 pounds in the spring.
"The prospect of winter grazing will likely increase demand for lightweight stockers with prices remaining strong or going higher. At the same time, high feedlot cost of gain and the likelihood of continued cattle feeding losses means that upward price potential for middle and heavy weight feeders is limited. It is possible that feedlot cost of gain could get high enough to cause feeder prices to invert with the lowest prices likely for middleweight feeders (roughly 600 pounds) and higher prices for lightweight and heavyweight feeders. The current cattle market conditions open up more stocker production possibilities in terms of a wider range of beginning weights and heavier ending weights. It is important for stocker producers to explore an expanded array of stocker production possibilities in light of these very dynamic market conditions."
Dr. Peel also talked about this over this past weekend in his regular feature slot on SUNUP, as produced by the OSU Division of Agriculture. We have the highlights of what he told Austin Moore of SUNUP on today's Beef Buzz.
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.
Ron Hays Beef Buzzes with Dr. Derrell Peel of OSU about what the market is telling us about the size cattle to buy for pasture this fall.
right-click to download mp3
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