Stocker calves may be option for wheat pasture producers
Producers who are able to graze out cattle on their wheat pasture as part of a dual-purpose management system need to take stock of both livestock markets and the local effects of recent and projected weather patterns.
"A year ago, fall stocker calf prices increased counter-seasonally into early December; conditions are right for similar support to stocker calf prices this fall," said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.
However, given that calf prices are already at high levels and the price of corn is sharply higher this year, Peel cautions that stocker prices may increase only slightly or hold mostly steady near current levels.
Calf prices in Oklahoma jumped as much as $10 per hundredweight during the week of Oct. 8 to 12, with stronger stocker demand and limited supplies both contributing factors. Feeder cattle auction volumes in Oklahoma have decreased 26 percent during the last six weeks compared to last year.
"Recent rains throughout much of Oklahoma should help to solidify stocker demand in some areas," Peel said. "Most of the wheat has been planted and some areas may have wheat pasture available for grazing by mid-November."
Unfortunately, most of Oklahoma's north central, northwestern and southwestern areas received comparatively little rainfall and remain critically dry.
"Variable moisture conditions across the state means that wheat stocker demand will likely be spread out across the next few weeks as wheat pasture develops at different rates," Peel said.
The most recent trade data for August reveal another reason for tighter feeder cattle supplies: Imports of Mexican feeder cattle through July were running more than 30 percent higher than last year.
"Mexican cattle imports in August decreased more than 50 percent from last year," Peel said. "However, the 2011 August total was unusually high because of large Chihuahua cattle that were exported ahead of a change in health status. The change has since restricted imports from that state."
The August 2012 import total, perhaps down 10 percent from a more normal August 2011 total, suggests that the large import volumes may be over. Preliminary data for September indicates that Mexican cattle imports have and will probably continue to decrease even more sharply.
"Decreased imports the remainder of the year may offset the increases in the first seven months of 2012 and hold the annual import total to no more than last year," Peel said. "Mexican cattle imports in 2013 are expected to be sharply lower than recent years."
Cow-calf producers are witnessing the expected impacts of a tight cattle supply situation:
--Calf prices are currently $20 to $25 per hundredweight higher than the same time last year.
--Cull cow prices are currently $10 to $12 per hundredweight higher than a year ago, which analysts mostly attribute to continued strength in hamburger markets and decreased cow slaughter.
--Total cow slaughter is down 4.8 percent for the year to date while beef cow slaughter is down 13 percent year over year.
In Oklahoma, auction volumes for cows and bulls are down 68 percent for the last six weeks compared to a year ago. Seasonal pressure on cull cow prices could build over the next month but many analysts expect it to be less than usual this year.
"Higher corn prices this year are tempering feeder cattle demand and bigger questions remain about domestic and export beef demand," Peel said. "Still, tight feeder cattle supplies will continue to dominate the cow-calf and stocker sectors, keeping calf and feeder prices very high."
Cattle and calves are the number one agricultural commodity produced in Oklahoma, accounting for 46 percent of total agricultural cash receipts and adding approximately $2 billion to the state economy, according to National Agricultural Statistics Service data. NASS data indicates Oklahoma is the nation's fifth-largest producer of cattle and calves, with the third-largest number of cattle operations in a state.