Latest News From Derrell Peel - Oklahoma State University

Feeder markets have shown extreme volatility
Derrell Peel: Cattle Market Responses To Recent Market Turmoil

The current cattle market situation creates significant disparities between the current supply and demand situation and expectations for coming supply and demand conditions.

Beef and pork are not in short supply.
Derrell Peel: Record Meat Supplies In 2020

It is critical for consumers to know that there is no shortage of meat in the U.S.  In fact, production of beef, pork and poultry are projected at record levels in 2020.

Supply chains disrupted by coronavirus
Derrell Peel: Beef Supply Chains Affected By COVID-19

The U.S. and global economy is in uncharted waters. There are many unknowns about the timing, severity and aftermath of the disease. For beef, there are longer-term questions about the overall impact on demand.

Wholesale beef values are lower than last year.
Derrell Peel: Is COVID-19 Impacting Beef Demand?

Current wholesale beef values are lower year-over-year, but it's too early to gauge what impact the COVID-19 virus has had on both export and domestic beef demand.

Market recovery from coronavirus impact could be lengthy
Derrell Peel: Decision-Making In Turbulent Markets

The coronavirus is another “black swan” that is different in some fundamental ways from other such events in cattle markets, such as the packing plant fire last year or even the first BSE case in late 2003.

January placements were 99.4% of year ago.
Derrell Peel: Regional Cattle On Feed Breakdown

Cattle on feed data shows the largest number of cattle in feedlots during February since 2008, while placements were 99.4% of year ago, a little smaller than expected.

Carcass weights trend higher
Derrell Peel: Carcass Weights Resume Uptrend

USDA’s latest carcass weights data show steers 12 pounds heavier than last year and heifers 13 pounds heavier than last year, resuming a higher trend after moderating the past three years.

Exports were down in 2019
Derrell Peel: Analyzing 2019 U.S. Beef Exports And Imports

U.S. beef exports were down year-over-year in 2019 but could see a bump this year. Imports in 2019 were up slightly compared to the previous year.

Cattle herd expansion has ended
Cyclical Herd Expansion Over; Record Beef Production In 2020

The Cattle report issued by USDA confirms that cyclical herd expansion in the U.S. is over.  The numbers indicate that while cattle inventories have stopped growing no major liquidation is underway. 

Feedlot inventories at a peak
Derrell Peel: Large Feedlot Inventories To Start 2020

The latest monthly cattle on feed report showed the January 1 inventory in feedlots (over 1,000 head) at 11.958 million head, 102.3 percent of one year ago.  This is the largest January on-feed total since 2008.

Derrell Peel: Hay Stocks Up From Last Year But Still Below Average
Derrell Peel: Hay Stocks Up From Last Year But Still Below Average

Weather challenges in 2019 led to many questions about the quantity and quality of hay production and supply heading into 2020.

Wildfires
Derrell Peel: Australian Fires Impact On Cattle And Beef

Widespread wildfires mean Australian cattle and beef production will be reduced for the foreseeable future and rebuilding, whenever it can begin, will take several years.

Feeder cattle
Derrell Peel: Cattle Market Factors To Watch In 2020

The new year brings with it several changes in ongoing market dynamics, some new opportunities, and some new risks and continuing challenges for cattle and beef markets.

Feed costs are the majority of ranch variable costs.
Derrell Peel: Take Stock And Look Forward

No matter how cow-calf producers judge the past year – good, just okay or disappointing – there is value in taking some time to analyze the reasons for the outcome.

Sharply higher carcass weights recently have boosted beef production.
Derrell Peel: Strong Finish For 2019 Beef Production

Sharply higher carcass weights have boosted beef production, though another round of winter weather hitting parts of cattle feeding country may temper that in the last few weeks of the year. 

Beef exports lag 4.2% so far in 2019.
Derrell Peel: Beef Exports Struggling And Imports Steady In 2019

Beef exports were down 9.0 percent in October compared to last year, contributing to a 4.2 percent year over year decrease in beef exports for the first ten months of 2019.

Winter weather often impacts cattle production.
Winter Storm Impacts Markets In Many Ways

Severe weather inevitably means management challenges and higher costs for producers but may also have market impacts if poor conditions are widespread enough.

Large October placements pushed Nov. 1 inventories back above year earlier levels. 
Derrell Peel: More, Heavier Cattle Placed In Feedlots In October

USDA's cattle on feed report counted 11.83 million head on feed, which is 101.2% of last year and up 4.8% from October as feedlot inventories increase to a seasonal peak.

Preconditioned calves return more at auction.
Cattle industry focus on animal health begins at the ranch

Preconditioning programs add value to cattle and the value is consistently reflected in premiums for certified preconditioned calves sold under specific programs.

Derrell Peel: Feeder Cattle Market Update
Derrell Peel: Feeder Cattle Market Update

USDA-AMS reports that combined volumes for seven Oklahoma auctions are up 7.0 percent year over year over the past six weeks.

Beef demand remains strong.
Derrell Peel: Holiday Beef Demand Kicks In

Boxed beef prices increased about ten percent over the month of October into early November, a significantly higher increase than the normal seasonal bump.

Heifer slaughter is up 7.4 percent from one year ago.
More Heifers On Feed Keeping Slaughter Higher In 2019

Friday's USDA cattle on feed report pegged heifer numbers at 39.1 of feedlot inventories, the highest percentage in more than 18 years, and year-to-date heifer slaughter is up more than 7%.

Ag markets will be affect by several issues.
Derrell Peel: Issues In Agricultural and Food Markets

Agricultural markets will be impacted by world population growth, economic growth and the expanding middle class, African Swine Fever and the development of alternative proteins.

Tyson Foods
Derrell Peel: Packing Plant Fire Disruptions Fading, Part 2

While many cattlemen were surprised and frustrated with market reactions after the fire, Derrell Peel says the type and duration of price behavior are exactly what is predicted by market economics.

Aerial photo showing damage to the roof of Tyson's Finney County beef plant.
Packing Plant Fire Disruptions Fading, Part 1

With seven weeks passed since the fire at Tyson's Finney County, Kan. plant, the impacts and resulting ripple effects are clearer now and are fading as expected. 

September was the first year-over-year decrease in inventories since Dec. 2016.
Derrell Peel: A Peak In Feedlot Inventories?

The September Cattle on Feed report highlights some regional differences in the current feedlot situation among the four largest feeding states.

Brazil currently ships about 22% of total exports to China.
Growing Demand In China Dominates Global Beef Trade

The rapid growth in Chinese beef imports has dramatically altered global beef flows with several countries now exporting a significant share of total exports to China.

Mexican feeder steer
Derrell Peel: Cattle Imports Update

Cattle imports for July were lower than a year ago, but the total for the first seven months of 2019 are higher.

After the Fire: Cattle Slaughter and Beef Prices
After the Fire: Cattle Slaughter and Beef Prices

As more data becomes available on the aftermath of the fire at the Tyson packing plant, cattle and beef markets are facing increased scrutiny and suspicions.

An early peek at winter grazing budgets highlights the huge uncertainty impacting feeder cattle marke
Derrell Peel: Fall And Winter Stocker Grazing Prospects

An early peek at winter grazing budgets highlights the huge uncertainty impacting feeder cattle markets, including grain markets and global economic turmoil.

The closure of Tyson's beef plant caused ripple effects throughout the industry.
The Role Of Markets In A Disaster

The fire at Tyson's beef plant was much like throwing a rock into a pond resulting in a big initial splash and ripple effects spreading in all directions.  The initial splash included a dramatic set of market reactions.

Widely varying seasonal price patterns exist for the many beef products produced in the industry.
Derrell Peel: Beef Product Seasonality

In the cattle and beef industry, widely varying seasonal price patterns exist for all classes of cattle as well as for each of the many beef products produced in the industry.

Global demand for cattle hides is declining.
Weak Hide Values Impacting Cattle Prices

China is the major global buyer of cattle hides and demand in China is hampered by tariffs and trade disruptions and by stronger environmental regulations impacting small tanneries.

USDA's mid-year inventory totals suggest that the U.S. cattle herd has reached a plateau.
U.S. Cattle Inventory Reaches A Plateau

USDA's mid-year inventory totals suggest that the U.S. cattle herd has reached a plateau.  I contrast a plateau with a more typical cyclical peak inventory that historically has implied a liquidation phase to follow. 

Derrell Peel: Cattle And Beef Markets Look For Summer Direction
Derrell Peel: Cattle And Beef Markets Look For Summer Direction

Uncertainty plagues cattle markets with broader trade and political strife augmented by evolving feed market conditions. How much higher corn will go depends on acreage and yield, both uncertain at this time.

Yearling carcass weights have likely reached the seasonal low. 
Lower Carcass Weights Moderate Beef Production

Total federally-inspected beef production was 12.1 billion pounds in the first 24 weeks of 2019, up just 0.7 percent from the same period last year.  That is an average production of 502.4 million pounds per week.

Most of cattle country has had abundant to excessive moisture this year—as evident from my travels from Oklahoma to Montana.
Derrell Peel: Green Grass and High Water

Most of cattle country has had abundant to excessive moisture this year—as evident from my travels from Oklahoma to Montana.

A feeder cattle auction in Northern Indiana.
Uncertainty is Impacting Cattle Prices

Cattle and beef markets have decreased from April highs with uncertainty in a variety of factors weighing on markets the past month. 

Tough Week in Oklahoma; Cattle on Feed
Tough Week in Oklahoma; Cattle on Feed

According to the Mesonet, the year so far through May 26 is the fourth wettest year on record in the state with the last thirty days the second wettest for the period. 

Cattle and Beef Markets Move Past Spring Peaks
Cattle and Beef Markets Move Past Spring Peaks

Fed cattle prices matched March seasonal peaks with another peak in late April but appear to be declining seasonally now.

Beef at a grocery store.
Beef Demand and Cattle Prices

Cattle prices are derived from the total value that consumers place on beef products. 

What Does May Bring for Cattle Producers?
What Does May Bring for Cattle Producers?

Does May bring flowers … or more showers? 

Record April Feedlot Inventories
Record April Feedlot Inventories

The latest USDA-NASS Cattle on Feed report pegged April 1 feedlot inventories at 11.96 million head, 102 percent of last year and a record April level for the data series, which started in 1996.

Better Spring Forage Conditions in Oklahoma
Better Spring Forage Conditions in Oklahoma

Conditions were significantly different in April, 2018 with 34.85 percent of the state in extreme (D3) and exceptional (D4) drought conditions and just 41.72 percent of the state with no drought conditions.

Cattle standing at a feed bunk after a recent rain.
Feedlot Performance Impacted by Weather

Adverse weather has likely slowed cattle finishing somewhat but the slaughter totals across classes mostly reflect underlying herd dynamics.

2019 Meat Production and Consumption
2019 Meat Production and Consumption

Total 2019 meat production in the U.S. is currently projected to reach another record level of 103.3 billion pounds, up 1.3 percent year over year. 

Spring Cattle Market Roundup
Spring Cattle Market Roundup

The March Cattle on Feed report brings the feedlot data up to date and back on schedule following the federal government shutdown. 

Cattle and Beef Trade: 2018 Summary, Part 2
Cattle and Beef Trade: 2018 Summary, Part 2

Total U.S. beef imports were 3.0 billion pounds in 2018, up 0.2 percent year over year and essentially unchanged for the last three years.