Senior Farm and Ranch Broadcaster, Ron Hays, is back speaking with Oklahoma State University Extension Livestock Marketing Specialist, Dr. Derrell Peel, about the first half of the year from a beef cattle market perspective.
“The first half of year really picked up the transition from sort of what we had last year that we knew was coming,” Peel said. “By that, I mean beef production set a new record last year. We have now transitioned this year, virtually every week of the year, I think, except one with lower year-over-year beef production. We knew that was coming.”
Obviously, cattle markets have continued to move higher, Peel said, which started in the last part of 2022, but those have moved substantially quicker in 2023.
“We are still in this process of trying to figure out where the bottom is from a cattle cycle standpoint in terms of cattle numbers, stopping the liquidation, stabilizing these numbers, and think about transitioning into some level of expansion at some point,” Peel said.
There are some key data ahead, Peel said, in the cattle inventory report coming out at the end of July.
“This upcoming cattle inventory report will be interesting in terms of where the beef cow herd is, but maybe more importantly where the beef replacement heifer number is,” Peel said. “Have we had enough improvement in the drought conditions that we are already showing signs of retaining heifers, or maybe not quite yet. We are not sure at this point.”
On one hand, Peel said producers are thinking about expansion, but at the same time, with input cost shocks, they are being cautious.
“Obviously, the drought conditions, per say, affect the ability to retain even if we want to,” Peel said. “The other part is, from the standpoint of the data we have, heifer slaughter has continued pretty strong through the first half of the year. It looks like now it is beginning to come down, but it really hasn’t dropped very much yet.”
There is a time lag between when heifers are not being placed in the feedlots, Peel said, and when the heifer slaughter number is seen decreasing.
“We haven’t seen that yet, but we might be in the middle of that transition into less heifers in the feedlot which would imply heifer retention, but again we don’t really have the data to show that at this point in time,” Peel said.
Looking at the cattle markets, Peel said all cattle classes have been higher compared to a year ago.
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