Hungry Herds Continue to Chew Through Southern Plains' Thin Forage Supplies and Feed RationsMon, 11 Feb 2019 10:55:58 CST
Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel analyzes the 2019 feed and forage market conditions as they relate to the beef industry.
"USDA released a slew of delayed crop data last week which provide an update to feed and forage market conditions for livestock markets. The 2018 corn crop was pegged at 14.42 billion bushels, down 1.3 percent from the 2017 crop but still the third largest U.S. corn crop ever. A carryover of 1.74 million bushels is projected for the end of the crop year. The 2018/2019 average crop year farm price of corn is currently projected at $3.60/bushel, up from $3.36/bushel for the 2017/2018 crop year.
"Soybean production for the 2018/2019 crop year is a record 4.54 billion bushels. Large soybean production, combined with severe soybean export disruption, leads to a huge projected soybean carryover of over 900 million bushels and a crop year average price of $8.60/bushel, down from $9.33/bushel for the 2017/2018 crop year. Overall, concentrate and protein feed supplies are expected to be large keeping ration costs moderate for livestock producers.
"Hay production has been difficult to assess the past year, perhaps nowhere more so than in the southern plains. Waves of variable growing conditions in 2018, ranging from severe drought to excessive rainfall, made it hard to determine both quantity and quality of hay. Total U.S. hay production was down 3.4 percent compared to 2017. In Oklahoma, 2018 hay production was down 9.2 percent and in in the surrounding region, Texas was down 12.3 percent year over year; Arkansas was down 16.3 percent; Missouri was down 9.6 percent and Kansas was down 13.0 percent. For the five-state area, all hay production in 2018 was down 11.6 percent year over year.
"U.S. hay stocks on December 1 were down 6.4 percent year over year. In the southern plains, conditions are variable ranging from Oklahoma, 3.3 percent lower stocks compared to one year earlier and Kansas, down 4.4 percent year over year to Texas, down 29.7 percent; Arkansas, down 19.5 percent and Missouri, down 17.6 percent year over year. Overall, these five states had December 1 hay stocks totals down 16.0 percent compared to one year ago.
"There is little doubt that several winter storms since the December 1 stocks were estimated has further chewed through available hay supplies. Around Oklahoma, anecdotal reports suggest that some producers are concerned about having adequate hay supplies for the winter and are finding, in many cases, that hay is in tight hands and, if available to purchase at all, is increasingly expensive.
"USDA estimates that U.S. winter wheat planted acreage for the 2019 crop is down 3.8 percent with Oklahoma acreage down 4.5 percent to 4.2 million acres. Winter wheat provides important forage in Oklahoma. Oklahoma wheat harvested acreage has averaged 1.75 million acres less than planted acreage in the last decade mostly indicating wheat used for forage only. Additionally, a significant portion of harvested wheat acres are grazed during the winter as dual-purpose wheat. Some wheat is grown and harvested as a grain-only crop.
"The four crops mentioned above are the largest users of agricultural land with corn (89.1 million acres); soybeans (89.2 million acres; hay (52.8 million acres) and wheat (47.8 million acres) accounting for 87.3 percent of the 319.6 million acres of U.S. crop production in 2018."
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