In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with Oklahoma State University livestock market economist Dr. Derrell Peel ahead of his presentation at the TCFA Annual Convention in downtown OKC about cattle market volatility, political uncertainty, herd rebuilding, and expectations for the upcoming Cattle on Feed report. Despite a difficult summer and fall for the cattle industry, Peel says the underlying market fundamentals have not changed.
Cattle Markets Continue to Face Volatility
Peel said the cattle market has experienced significant volatility, much of it driven by outside influences. While prices have faced an extended correction, he said the underlying fundamentals remain in place.
“This market has just had a tremendous amount of volatility injected into it, most of it from the outside,” Peel said. “We’ve had an extended correction, and I’m still calling it a correction. But it was a tough summer and fall for the cattle markets. Kind of hard to get their legs back under them. But you know, despite all that, the fundamentals have not changed.”
Political Uncertainty Adds to Herd Rebuilding Challenges
Herd rebuilding remains a significant challenge for cattle producers, and Peel said uncertainty surrounding political decisions has become another factor complicating the process. “We had a fairly lengthy list of reasons why this was a slow process to sort of get a start on stabilizing this herd and looking at some herd rebuilding, but the uncertainty itself is a significant factor on that list now,” Peel said.
While recent political discussions have included efforts to influence beef prices ahead of the midterm elections, Peel said the opportunity for some of those actions may have passed. “In terms of some of the things that they’ve talked about and tried to do relative to trying to impact markets ahead of the midterm elections, it’s a little bit past that opportunity now,” Peel said. “So maybe things will settle down a little bit.”
Lower Retail Beef Prices May Not Signal a Major Shift
Recent data showed a slight decline in retail beef prices, but Peel cautioned against interpreting that movement as evidence of a major market trend change. “I’m not sure what to make of that,” Peel said. “I don’t think it really reflects a major trend shift at this point. Some of it’s probably seasonal in nature.”
Cattle on Feed Report Expected to Show Light Placements
Looking ahead to Friday’s Cattle on Feed report, Peel said the general expectation is for another month of light placements as tighter cattle supplies become increasingly apparent. “I think the reality of these cattle numbers is really coming home to roost in a way that cattle feeders will not be able to resist going forward,” Peel said.
Peel noted that Oklahoma auction volumes have remained below year-ago levels since mid-July, even as the fall calf run gets underway. “We’re into the fall run of calves, but it’s not a very big fall run at this point,” Peel said. “Now there may be some more coming. There was probably some delayed marketings because of the hot and dry weather earlier, but at this point in time, it doesn’t look like we’re going to see big numbers this fall.”
Recent Rainfall Offers Some Encouragement for Oklahoma Cattle Producers
Recent rainfall across parts of Oklahoma has provided some relief and helped support calf prices, but Peel emphasized that additional moisture will be needed to improve conditions for herd rebuilding. “There’s nothing like a rain in September or October to put some dollars on the calf market, and it certainly has done that to some extent,” Peel said.
However, he cautioned that the recent precipitation is only a starting point. “We’re still behind moisture-wise. We’re going to have to have follow-through moisture to make this thing work,” Peel said. “It’s at least possible now, but that’s really all it is: is a possibility and a start at this point.”
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR above for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
