Beef Buzz News
OSU Extension Livestock Economist Dr. Derrell Peel Says Conditions Exist For Good Profit Margins For Grazing Stocker Calves On Wheat Pasture This Year
Fri, 04 Sep 2020 08:19:37 CDT
This is the time of year when wheat drills are starting to roll across the Oklahoma plains as farmers hope to get a robust winter wheat pasture for stocker cattle. Recent rains in many areas have bolstered conditions.
Ron Hays Beef Buzzes With Dr. Peel
Dr. Derrell Peel, OSU Extension livestock economist, believes conditions could also be favorable for producers to turn a profit on the cattle.
Dr. Peel made his economic predictions during an interview with the OSU SUNUP TV crew for this weekend’s broadcast.
One of the things I look at is the relationship between prices for different weight groups to calculate the value of (weight) gain, Peel said.
Right now, that looks favorable, depending on what weight you start with and how much total gain you would be looking at, he said.
Most of the values now are between 90 cents and $1 per pound, Peel said.
The OSU Extension economist encourages producers to prepare a budget with a sharp pencil.
If you anticipate a normal grazing season, buying stocker cattle in October and selling in March, you must anticipate both the purchase price and the selling price. You can use seasonal price patterns or futures markets to do that, he said.
Peel said the budget right now would suggest a positive margin.
As producers work on the budget, Peel has some additional suggestions.
Figure out what kind of animal you want to buy, size and gender, he said.
He encouraged producers to look at the futures market and try to lock in a margin.
Pasture and range conditions also play a role going into the fall and winter grazing season.
Hay stocks are variable and limited forage supply depending on location.
That same stocker calf the wheat pasture guy may be trying to buy could be the same calf a cow/calf producer might be considering retaining that animal through a backgrounding program, Peel said.
Click on the LISTEN BAR below to hear more comments from Dr. Peel.
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