Senior Farm and Ranch Broadcaster Ron Hays talked to OSU Extension Livestock Market Economist Dr. Derrell Peel about how the drought is affecting beef producers and how they are making decisions concerning their herds.
“For the last four weeks, the overall inventory numbers have shown sharply higher weekly auction totals for the combined auction report for Oklahoma,” Dr. Peel shared. “I think that’s clearly a function of drought conditions, water supplies, and maybe not so much pasture and hay – I think that is still holding in there, but in a lot of places, the lack of water is forcing producers to make decisions.”
As a result, calves are being moved earlier than usual. Dr. Peel described a similar situation during the drought of 2022, and by late October and early November, when numbers normally peak, they began to drop.
“All of these things are going to combine to impact where we are on January 1 for the overall inventory numbers,” Dr. Peel said.
While forage and pastures may still be holding on, they are deteriorating rapidly as this week’s USDA Crop Progress report showed a 9% drop in Oklahoma’s pasture and range conditions from the previous week to only 7% good this week. Fall is not a season in which pastures typically improve, but forage is still needed to get cattle through the winter.
“We do still have ample hay supplies,” Dr. Peel said. “That’s the only bright spot in all of this. With pasture supplies dwindling fast, and water supplies dwindling even faster in many cases, I think we are set up here for a very challenging winter in terms of being able to hang on to these animals.”
Dr. Peel admitted that at one point he thought the cow herd had dwindled enough that they could be carried through a dry winter without much additional liquidation, but under the current circumstances and especially if they continue through next spring, cattle numbers will continue to drop.
He said that resource management should be a producer’s first priority. He added that producers are happy with market prices today but are still very cautious about where they are going.
Dr. Peel said, “My analyses will tell them that, given the way things are set up now, we expect to see elevated prices, not only through 2024 but also through 2025 and 2026 as well. Simply because we don’t have the ability to change cattle numbers and beef production during that timeframe. They are still being awfully cautious and probably for a very good reason.”
The overall agricultural industry is experiencing many challenges. The surplus of certain crops has put pressure on prices, which the livestock industry generally benefits from through cheaper feeds, but pork and poultry are also struggling despite that offset.
“Cattle prices are high, but the longer we go with steadily decreasing supplies, it doesn’t matter if prices are high because there won’t be anything to sell,” Dr. Peel warned. “That is going to become a real issue for some producers at some 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 at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
