Beef Buzz News
Dismal Wheat Pasture Prospects Weighing on The Feeder Cattle Market, Says OSU's Derrell PeelThu, 22 Oct 2020 08:12:45 CDT
Prospects for a good winter wheat pasture season are becoming less likely as drought conditions expand throughout the southern Plains. Dr. Derrell Peel, OSU Extension livestock market economist, said this could have national implications for the cattle market.
We’re at a critical stage right now as the door is closing rapidly on winter wheat pasture, Peel said.
Some of it looks okay but it’s going backwards quickly, he said.
If we don’t get significant moisture in the next few days than we will lose the possibilities for decent winter forage, he said.
This time of year, what happens in the southern Plains has a national impact as this is home for a lot of cattle from around the country, Peel said.
Typically, the markets are at seasonal lows this time of year.
In the central and southern Plains if we have good wheat pasture that offsets that seasonal low, Peel said.
Stocker cattle operators have had to refigure their budgets to adjust for the diminished pasture prospects.
One of the things that has changed in the last couple of weeks is a shift in the futures markets, Peel said.
There has been a major meltdown where we’ve taken about $15 per hundredweight off the feeder cattle market for the March contracts that we would be using for winter grazing, Peel said.
If there is little or no winter wheat pasture this year, Peel said that could change the timing for feeder cattle to enter the supply chain.
We will probably end up getting lighter weight cattle into the feedlots sooner rather than later which could have implications all the way through the first half of next year, Peel said.
In a related market shift, the OSU economist noted the wholesale boxed beef market has pulled back from Labor Day highs.
That could be an indication of overall demand weakness, he said.
I am concerned going into the winter with the COVID-19 and slow food service recovery we could see lower demand impacts weighing on the market, Peel said.
Going into 2021, Peel remains cautiously optimistic.
Cattle prices are looking a little better but there is still a lot of uncertainty, Peel said.
If demand holds, we could see some improvement in 2021, he said.
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