Beef Buzz News
OSU's Derrell Peel Predicts Tighter Cattle Supplies Going Forward in the Drought
Wed, 13 Apr 2022 08:26:25 CDT
We are gradually starting to see tighter supplies of cattle throughout the country. Extension livestock market economist, Derrell Peel says this is a trend that has been around for a while.
“These markets have been trending higher for many months and that general trend is still in place,” Peel said. “The fundamentals of cattle numbers from a supply standpoint and the expectations for beef production, certainly in the second half of the year, are for tightening supplies.”
While we may not see these seasonal patterns for the second half of the year playout, normally, compared to the first half of the year, Peel said that the uptrend is liable to still be in place and continue to support these markets.
The dry conditions we are being faced with right how could potentially change everything.
“Time is not on our side here,” Peel said. “It is springtime, and we need to be getting greened up.”
Peel said with widespread drought conditions across much of the west, each day opportunity is lost for initial spring forage growth and hay production as we move into May and June.
“If conditions do not change, I think we will see considerable pressure for some producers,” Peel said. “Many producers, perhaps, in various regions are to be faced with the prospect of having to make some additional culling decisions and reducing their stocking rates in the face of a lack of forage production.”
One impact of drought, Peel said, is that in the short run, you increase supplies of cattle in the market because of liquidation. We also could be looking at early weaning for fall calving cows, depending on what their forage situation is, he added.
“We will probably see more cows coming to town if the drought persists,” Peel said.
While all of this could cause some changes in timing, Peel said it doesn’t change the overall numbers of cattle, except maybe in the very short run.
“The longer-term implication is probably after 2022,” Peel said. “Additional drought liquidation this year would set up even tighter supplies in 2023 and beyond for some period of time.”
Similar to 2011 and 2012, Peel said in these circumstances we would see low inventories for a period of time.
Click on the LISTEN BAR to hear more from Ron’s interview with Derrell Peel on this topic and more on the value of stocker gain and difference between the cash and futures.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is 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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