Beef Markets Stabilizing at More Realistic Levels, Peel Says

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow-Calf Newsletter:

After the wild January ride, cattle and beef markets are settling into somewhat more stable and realistic levels moving forward. A barrage of winter storms has affected consumption and distribution of beef as well as feedlot production. For the year to date, beef production is down 8.6 percent with cattle slaughter down 9 percent. As a result, margins continue to adjust with relative winners and losers among the various beef industry sectors. Wholesale boxed beef cutout had the wildest ride with Choice cutout spiking up to $240/cwt., up 20 percent from the beginning of the year, and retreating to current levels under $208/cwt. Packers benefitted only partially from the short-lived price increase because the values represented a limited spot market for wholesale beef and many packers had a significant portion of their beef production forward priced at lower values. The concurrent increase in fed cattle prices has squeezed packer margins because the higher fed prices are being paid on all cattle but only a portion of the boxed beef was sold at the high spot prices. Subsequently packer margins have been further squeezed as boxed beef prices have fallen more than fed cattle prices.

The relative winner in all this is the fed cattle market, where prices have retained more than half of the January gains. Fed prices were about $135/cwt. the first week of January and have dropped to current levels of $142/cwt. after peaking at $150/cwt. about three weeks ago. Feedlots are very current at this time as the combination of high prices and winter weather have conspired to pull cattle forward and limit slaughter-ready supplies. Feedlot breakevens are at current market price levels or higher in many cases so the current situation may be one of limiting losses more than profitability but it is still well above earlier expectations for the market at this time. A series of winter storms continues to pummel the northern half of the country and winter weather impacts on fed cattle performance will continue for some time. 

Click here for more of Derrell Peel's latest analysis of the cattle and beef markets.
 

Drop In Farm Income Not Surprising, DTN Analyst Says 

The latest USDA Economic Research Service report detailing a 26-percent year-over-year drop in farm income shouldn't come as a big surprise. That's according to DTN Senior Analyst Darin Newsom. He spoke with me recently and says the causes are relatively obvious, but not overly worrisome.

"If we look at what the value of the crops themselves has done, it's plummeted this last year from, say, where we were in 2012 and 2011. So, no real surprise that farm income is down. But, we have to keep in mind what we were comparing it to. We were comparing it to some very historic times here in the past, particularly on the grain farms."

He says the price levels of a couple years ago were simply not sustainable and we shouldn't expect to see them again anytime soon.

"It's going to take some extraordinary market situations again to get corn back up near the $8 price level and soybeans as high as they ran. It's going to take something out of the usual to see that again. Right now, I think we're more on the downward side. We're going to stabilize in these prices. So, income is not terrible, but it certainly is not what it was in those years."

Click here to read more or to listen to my conversation with Darin Newsom. 

The Oklahoma Pork Congress is scheduled for Friday, Feb. 28, at the Reed Center in Midwest City. More than 150 pork producers, allied industry members and guests will meet for updates, programs, lunch, awards banquet, and business meeting as well as silent and live auctions.

The day will begin at 10 a.m. with an update from the National Pork Producers Council, and the National Pork Board. After the national updates about the industry, J.D Strong, executive director of the Oklahoma Water Resources Board, will present a discussion about the water issues throughout Oklahoma.

During lunch, Class II of the okPORK Youth Leadership Camp plans to give a presentation about their travels through the state learning about the Oklahoma pork industry. The camp participants plan to spend the day helping with arrangements and talking with members about their experiences.

Following lunch, okPORK Executive Director Roy Lee Lindsey will provide an update for all members. Directly following the okPORK update McSpadden & Associates will lead attendees through a discussion on the current legislative session and the effect it could have on Oklahoma's pork industry. The okPORK membership also will hold its annual business meeting and elect members to the okPORK Board of Directors. 

Click here for more of this story.   

Sustainability Offers Platform for Tremendous Growth, McDonald's VP Says

Sustainability. What does it mean? Does it mean the same thing to beef consumers as it does to producers? What changes does it portend for the cattle industry?

Bob Langert, vice president of sustainability with McDonald's, tackled those questions at the recent Cattle Industry Convention. After his presentation, he sat down with me to further explain that word which seems to be causing more than a little consternation and confusion among beef producers.

"Part of my message to the beef community is to look at sustainability not as a problem, not as a burden, but as an opportunity to grow their business. At McDonald's we see this as a great opportunity. Beef is one of our growth platforms. Customers are wanting changes in how we address sustainability and they're willing to reward companies that do that. So, this is customer driven. This is where it emanates from. And we're looking at this causing a stir of positive support and getting the cattle industry to not look at it as something that's an albatross to carry, but as a way to advance their business as well."

Bob spoke with me at great length about this hot-button issue and joins me on the latest Beef Buzz.  Click here to read more of this story or to listen to our conversation. 
 

Farm Transition Workshops to be Held in Oklahoma

A series of one-day workshops will take place throughout Oklahoma this spring for family farmers and ranchers interested in learning about the components of a successful farm transition.

Managing Farm Transitions: Connecting Landowners, Farmers, and Families will involve four single-day workshops in Oklahoma scheduled for March 24 in Chickasha, March 31 in Claremore, April 7 in Woodward and April 14 in Ardmore. Sessions will cover business and personal goal-setting, financial analysis, human resources, family communications, estate planning, estate taxes and retirement planning.

"Research tells us that fewer than one-third of family businesses survive the transfer from one generation to the next," said Shannon Ferrell, associate professor of agricultural economics at Oklahoma State University. "These workshops will help farmers and ranchers keep their families farming together." 

More details are available on our website.  Please click here to go there.

Candidates Sought for 2015 National Pork Producers Delegate Body

Public notice by Oklahoma Pork Council And the National Pork Board:

The election of pork producer delegate candidates for the 2015 National Pork Producers (Pork Act) Delegate Body will take place at 3 p.m. on Friday, February 28, 2014 in conjunction with the Oklahoma Pork Congress and Annual Meeting which will be held at the Reed Conference Center, 5750 Will Rogers Road, Midwest City, Okla. All Oklahoma pork producers are invited to attend.

Any producer age 18 or older who is a resident of Oklahoma and has paid all assessments due may be considered as a delegate candidate and/or participate in the election. All eligible producers are encouraged to bring with them a sales receipt proving that hogs were sold in their name and the checkoff deducted.

If you are interested in being a candidate, please prepare a short (1/2 page) biography telling about yourself and send it to the Oklahoma Pork Council, ATTN: Election Committee, 901 N. Lincoln Blvd., Suite 380, Oklahoma City, OK 73104-3206 to arrive by February 21, 2014. Nominations will also be accepted from the floor.

For more information, contact the Oklahoma Pork Council. Telephone: 888-SAY-PORK (729-7675) or 405-232-3781.
 

This N That- O,K&T Angus Sale is Wednesday, OALP in South Africa and Bob Funk Fundraiser for James Lankford

The O, K & T Angus Breeders Association is pleased to be holding their 73rd Annual Sale tomorrow, Wednesday February 19th  at 1:00 PM at the Fairgrounds Pavilion in Buffalo, Oklahoma.

A total of 79 lots are scheduled to be sold.  For details, you can click here for our auction listing which includes the PDF of the catalog of the sale.  

For information on the phone- contact the Secretary Treasurer of the Association, Dennie Jenkins at 580-938-1094. 

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Class 16 of the Oklahoma Ag Leadership Program is now on the ground in South Africa and actually is into day two of their time actually in country.   

Day one of touring included the Fair Deal Agricultural Trade Center not far outside of Johannesburg.   

More details in the next day or so as described by members of Class 16.

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Bob Funk will be hosting a fundraiser for the US Senate campaign of Congressman James Lankford this evening at 5:00 PM at his home in Yukon.  I have been told that quite a few ag folks are planning on attending- and you can get details about attending by emailing the Lankford campaign by clicking here.