Senior Farm and Ranch Broadcaster, Ron Hays, is talking with Oklahoma State University Extension Livestock Marketing Specialist Dr. Derrell Peel, about the latest USDA Cattle on Feed Report and the July 1 Cattle Inventory Report released on July 21, 2023.
“The reports are telling us, basically, we are getting smaller on numbers, and numbers are getting tighter pretty much across the board,” Peel said.
The Cattle on Feed report shows numbers below a year ago, Peel said, but it has been a slow process to pull those feedlot inventories down.”
“In particular, the number of heifers in the feedlot is exactly the same as a year ago, so steers are down, and they have been coming down for several quarters, but we continue to feed a lot of heifers,” Peel said.
Peel said those heifer numbers are going to change at some point, and he would not have been surprised to see those numbers drop in this recent inventory report- but they did not.
“We will be looking come January, of course, we will get Cattle on Feed reports between now and then, but by January with the inventory report, we will be looking for indications that we are even starting this process (heifer retention),” Peel said.
Peel talked about the reports in his presentation to the Oklahoma Cattlemen’s Association on Saturday morning and then summed up where he thinks the markets may be peaking in 2024 or even 2025. He referenced the Oklahoma Farm Report’s Ron Hays by saying “you may want to write these down Ron” as he offered what he said he has been thinking about for awhile when it comes to possible market topping prices in this current cycle.
Looking at the markets, Peel said he thinks a 500-pound steer in Oklahoma could go for four dollars per pound, and an 800-pound steer could go for three dollars per pound. Fed cattle, he added, are already coming close to two dollars per pound.
“We could go substantially over two dollars, but four, three, two is kind of the way I am looking at it right now,” Peel said.
Timing is still in question, Peel said, as he is not completely sure when the markets will reach those numbers, but he is confident in his prediction.
“It is going to be 2024 or 2025 potentially before we see this thing peak out,” Peel said.
Peel recommends cattle producers have something to sell when these prices do increase.
“There is a tradeoff between taking advantage of the value now versus investing in future value,” Peel said. “There is not one right answer.”
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