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Beef and cattle prices increased to new record levels in 2011 and are expected to push even higher in 2012- so says Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel.  He believes that several years of declining cattle inventories culminated in late 2011 with a projected 3.0 percent decrease in slaughter that combined with lighter carcass weights to result in a 3.8 percent less beef in the fourth quarter of 2011 compared to a year earlier.  For 2012, slaughter is forecast to drop another five plus percent and, even with an expected increase in carcass weights, will result in a nearly four percent drop in beef production for the year.  Decreasing beef production ensures that wholesale and retail beef prices will be pushed even higher in 2012.  Cattle supplies that are even tighter, on a relative basis, likewise ensure that fed and feeder prices will be pushed to the limit and maintain strong negative pressure on feedlot, packing and retail margins.  Weather conditions that determine whether the drought in the South continues or abates will determine whether feeder cattle supplies remain merely very tight or move to extremely tight should heifer retention accelerate in 2012.  


While supply is clearly the main driver pushing cattle and beef prices upward, it is consumer beef demand that will determine just how far prices will go.  It is not really a question of whether prices will be higher but rather a question of how much higher.  Ignoring trade for a moment (though it continues to play an increasingly important role in the U.S. beef industry), it is domestic demand that is the biggest unknown in 2012.  Consumer demand for beef (or indeed any product) is a combination of "willingness" and "ability" to purchase a given quantity of a product at a given price.  Typically, when nothing else changes, consumers will pay higher prices when quantity is less and will only purchases greater quantities at lower prices.  Declining beef production in 2012 already suggests higher prices for this reason.  
 

There are other factors that are discussed by Dr. Peel- click here to jump over to his full analysisof our cattle markets as we begin the New Year.   

So Far- So Good for the the Southwest Oklahoma Canola Crop 

More than 200,000 acres of winter canola are believed to have been planted in Oklahoma, south Kansas and north Texas for the 2011-12 crop year, according to Gene Neuens, who works for the Producers Cooperative Oil Mill at Oklahoma City.


The oil mill and Oklahoma State University planted a winter canola test plot in cooperation with Cotton County farmer Jimmy Kinder this year. The test plot is located on the north side of HW70 seven miles east of Grandfield. Winter canola varieties planted in the test plot are all Roundup Ready varieties enabling farmers to obtain better weed control when planting the varieties.

"We dusted in out canola and wheat this time," Kinder said. "It hadn't rained any all year. 2011 was a record year for drought and hot weather. But in the last 90 days we have received over 10 inches of rain. That has given us an entirely new outlook for our crops growth."

You can read more about Jimmy Kinder's take on the winter canola crop in southwestern Oklahoma here in the early days of 2012- click here to jump to our webstory on OklahomaFarmReport.Com.   

Plains Cotton Growers Claim Several "Wins" in 2011

Plains Cotton Growers say that they have been able to represent the cotton industry across Texas and Oklahoma very well in the year just concluded- we posted a story this past Friday about some of the "wins" claimed by PCG in the past twelve months. One example of the type issues that the organization worked on this past year had to go with Crop Insurance for the cotton industry.

PCG says that the 2011 growing season brought several changes to the Federal Crop Insurance program as the USDA Risk Management Agency implemented the new Combo Policy for Cotton and several other crops. The purpose of the Combo Policy was to streamline the coverage options for producers and align rating and pricing components for each policy to improve and simplify the insurance process for producers. As a result of these changes, however, several inconsistencies were identified within different parts of the new rules for cotton that threatened to reduce coverage to producers or prevent them from obtaining any coverage at all. 

Rainfall and Stocking Rate Decisions for 2012

Even with the rains during the fall of 2011, much of Oklahoma and Texas is still under drought advisories as we enter 2012. According to the U.S. Drought Monitor, much of the region remains under moderate to exceptional drought. Long-term forecasts are not promising for abundant rainfall during the spring or summer of 2012. Climatologists say that we are in a "drier than average trend" and that it could last for several more years.

Hugh Aljoe of the Noble Foundation says that there are a couple of key questions that need to be dealt with by cattle producers throughout the southern great plains- How are cattle producers to plan for the future? What information can they use to make stocking rate decisions? Aljoe says these are the questions that everyone in the industry should be asking.   

Click here to check out what kind of answers that Aljoe has for producers with these questions.

Predictable and Consistent Cattle Can Be Worth More When You Market Them on the Grid   

The American Angus Association touts the concept of consistent high quality cattle being worth more to a commercial cattle producer- and they have produced a Youtube video that explains the advantages of predictable cattle from the viewpoint of two cattle feeders- one from western Kansas and the other from the cornbelt. 

We have that video on our website- click here for a look at this latest from the Angus Youtube Channel.

Sixty Three Percent of Oklahoma Wheat Rated Good to Excellent as we Begin 2012 

The 2012 Hard Red Winter Wheat crop in Oklahoma is in relatively better condition as we begin the new year- compared to the year ago snapshot we had from the NASS Oklahoma City office in January 2011.

A year ago- the monthly summary of crop conditions for December 2010spoke of the dryness that had been with us for several months by that point- and showed the 2011 wheat crop at 37% in good to excellent condition- and another 44% in fair shape.  As we know, rain was sparse to non existent for the rest of that crop's life cycle- and we ended up with a much smaller than normal wheat harvest as a result.

Here in January 2012- Conditions for all small grains were rated mostly good, while the canola condition was rated mostly good to fair. Wheat grazed was at 37 percent, three points above the previous year- and two percentage points above the five year average.  The winter wheat crop is rated 9% excellent, 54% good, 30% fair and only 7% poor to very poor.

The winter canola crop also is looking decent- 8% escellent, 46% good, 40% fair and 6% poor to very poor.

Most troublesome are the pasture and range conditions- they remain poor to very poor- 43% in very poor condition- 31% in poor shape, 21% in fair condition and only 5% in good condition.  No pasture in the state earned an excellent rating.

Click here for our webstory about the latest monthly crop ratingsfor the state of Oklahoma- as provided by the NASS Field office out of Oklahoma City.

A Pair of Oklahoma Limousin Ranches Land in Top 20 List for the Breed 

The North American Limousin Foundation has compiled the statistics for its recently completed fiscal year and released its list of top 20 active breeders. Together, they registered more than 7,000 Limousin and Lim-Flex® calves.

 

"These top 20 Limousin breeders represent a strong contingent of performance minded breeders throughout the country," said Mark Anderson, executive director for NALF. "I commend the loyalty and commitment of these and all of our members for their dedication to make Limousin the perfect cross for British based cowherds. Combined, they are the lifeblood and reason for our increased breed success." 

Two Oklahoma ranches are in this elite company- Express Ranches of Yukon made the top ten as the 9th top active Limousin breeder, while Paul Sisemore's P Bar S Ranch in Sand Springs is rated 15th.

Click here for the full list of the top twenty Limousin breeders in stats that were assembled by Colorado State University and the North American Limousin Foundation.