Peel Provides Outlook For Cattle, Hogs And Poultry For Remainder Of 2015

With the marketing year halfway over, Oklahoma State University Livestock Market Economist Dr. Derrell Peel is watching movement of both beef and cattle prices. He is watching a number of factors including the global economic situation and the strength of the U.S. dollar.

“Right now, the dollar has sort of stopped depreciating against many currencies, but it’s probably going to stay at a relatively high level,” Peel said.

The strong U.S. dollar is a double edged sword. Peel said it hurts U.S. beef exports, while it helps imports coming into the U.S. from Australia and New Zealand.

In looking at the outlook for feed resources, Peel continues to watch corn and soybean production. While the industry has a pretty good estimate on planted corn acres, it’s hard to determine the number of acres planted to soybeans. With both crops, Peel said it’s hard to estimate what the number of acres harvested will be and estimating yield potential will be challenging with the variable growing conditions.

Cattle prices look to remain strong, as tight beef supplies will continue for the second half of 2015. Peel said a lot will be determined by how aggressive producers get this year with herd expansion. He said there will be an increase in the calf crop because of the increase in cow numbers last year, but that will be offset by an increase in heifer retention. In talking with cattle producers, Peel said there is a lot of optimism. With record prices, there has been a lot of focus on expanding the cowherd, but producers in the Southern Plains haven’t been able to do that until recently.

“The frustration of course up until this year has been that we couldn’t do what we wanted to do, so we are now able to do that,” Peel said. “So, I think in general there is some new management challenges that go in some cases with floods and a little bit too much water, at least on a short term basis, but in general producers are happy and happy to have the management challenges now where they can think about doing things, as opposed to what they have to do just to get by.”

In looking at the nation's pork and poultry production, both sectors have dealt with significant disease outbreaks. The pork industry has recovered from the Porcine Epidemic Diarrhea Virus (PEDv). Peel said now the pork industry has to move through their large supplies and there are indications hog expansion will slow down through the last half of the year. On the poultry side, Peel said there are concerns that Avian Influenza will return in the fall and it might effect the broiler flock.