Outside macroeconomic forces have been pounding the oil market, the equities, and agricultural futures, along feeder and stocker cattle prices the last two weeks. Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel said for the immediate future, cow-calf producers should not panic.
“We’ve had a heck of ride to getting up here, the party’s not over,” Peel said. “The party is changing a little bit and we have to be prepared over time, but for this year, this fall, even these current setbacks notwithstanding, I think we’re going to see very strong prices. We’re going to see the second highest cow-calf returns that we’ve ever seen. They won’t beat last year’s level.”
In looking at the outlook for stocker producers, Peel said the math works today at these lower prices. The big unknown, is where prices are headed.
“The question is, really positioning yourself to take advantage from a production standpoint and get the performance out of those animals, but then you just have deal with the risk some way and find a way to deal with the risk that’s out there, in terms of prices next spring,” Peel said.
In looking longer term, Peel said producers will have to get better at their cost management skills. He said it’s been pretty easy to make money the last couple of years, but it’s not going to be as easy going forward. But there are going to be some opportunities for producers.
For those planning to plant wheat for grazing, Peel said producers might want to take advantage of these calf prices that have dropped $10 to $30 a hundred weight the last couple of weeks. Peel said it’s a good time to buy now for anyone who can take those calves now and manage them now. Peel thinks the price of calves will return higher later on this fall.
“There will be a lot of wheat pasture demand, it looks to me like," Peel said. "Given the preparations I see around the country, I think we’re going to plant a lot of wheat here in the next two to three weeks and baring major problems, we’re going to see a significant pasture opportunity. So, there is a bit of an opportunity now that may not be there three weeks or a month from now."
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