Beef Buzz News
OSU's Derrell Peel Says We Could See at Least a 3-4% Decrease in the Beef Cow Herd in 2022
Tue, 26 Apr 2022 06:49:12 CDT
Oklahoma Farm Report’s Ron Hays continues his conversation with OSU Extension Livestock Economist, Derrell Peel who sees a significant decline in cattle numbers for the remainder of 2022 due to the drought and high input prices.
Listen to Ron Talk with Dr. Peel about Drought-Induced Herd Liquidation
“In the short run, we are maintaining cattle numbers and we know that a drought can actually cause beef production numbers to go up in the short run because you have to market more cattle,” Peel said. “I think that is part of what we are seeing here in general.”
Peel said beef cow slaughter so far in 2022 is up 18% in the first 14 weeks of the year. This is a very strong pace, Peel said, especially since it is almost May.
“The real drought impacts are going to hit in May, June and July, probably, so we could see a significant liquidation of cows as well,” Peel said. “All of that says we may have lots of cattle in the market in the short run, but a really big hole at some point in time, down the road.”
If you take the pace of beef cow slaughter we are on right now, and the number of replacement heifers that we started the year with, particularly heifers that were scheduled to calve, Peel said we get that breakdown. Peel added we are easily looking at a 3-4% decrease in the beef cow herd in 2022 and it could be more than that depending on what happens.
“This could be the biggest year-over-year decrease in beef cow numbers, probably since the mid-’70s when we came down off of the all-time peak numbers,” Peel said.
The way it looks right now and with the drought conditions persisting, Peel said we could drop below the low we had in 2014, going into 2023, and set up some extremely tight numbers in 2023, 2024, and beyond.
“Supply will equal demand in the final analysis, but if supplies get really tight, it means that there is going to be a lot of pressure to ration limited supply and that is going to keep the price pressure up,” Peel said. “Consumers are already paying a lot for beef, and this would suggest that except maybe here for the very short run, once we get beyond that, the pressure will continue for the foreseeable future.”
Peel said for the second half of the year he sees the anticipated revenue for cattle producers playing out as predicted. The futures market has taken in a fairly strong uptrend in prices, Peel added, so our expectations for prices in general for 2022 have not changed.
“The challenge for profitability is clearly going to be on the cost side,” Peel said. “We have got high feed costs; forage may be limited, and hay production will be limited and expensive.”
To view the March Cattle on Feed Report, Click Here.
To listen to Ron’s Previous conversation with Dr. Peel on the March Cattle on Feed Report, Click Here.
Listen to part two of Ron and Dr. Peel's conversation by clicking on the Listen Bar of this story.
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