Freefalling cattle prices made the second half of 2015 an adventure for Oklahoma’s cattle producers, but the good news is the price adjustment is over and the market in 2016 should be relatively stable, Oklahoma State University agribusiness professor Derrell Peel said.
Peel discussed the livestock market Tuesday night at an agriculture forum sponsored by BancFirst. The forum was held at Tri County Tech and nearly 100 cattle producers attended. Bartlesville cattle producer/attorney Jess Kane presented an overview of the Right-to-Farm Bill, an amendment to the state constitution designed to protect farmers from indiscriminate legislation at the State Capitol. Oklahomans will vote on the amendment in November. Dr. Craig Payne, director of veterinary extension and CE at the University of Missouri, provided insight into changes in antibiotic labeling and veterinary feed directives that will take effect on Jan. 1.
Cattle herd numbers slowly declined from 1996 until 2014 when the drought forced extensive culling. The 2014 drought brought the U.S. cattle herd to an all-time low of 29 million head.
"Significantly smaller than we ever intended to be," Peel said. "… We are going to see some expansion. How big are we going to grow? How long is it going to take to get there? I don’t have the answer to either one of those. … It’s a moving target. We don’t really know yet."
Herd rebuilding will continue, he said.
The larger 2016 calf crop will build feeder cattle supplies by the end of 2016. Beef production will increase year-over-year in 2016 based on higher carcass weights and increased cattle slaughter, he said. However, producers will keep more heifers in the herd and feeder cattle imports from Mexico will fall as the strong U.S. dollar keeps imported beef out of the market.
Consumer beef prices skyrocketed as herd numbers declined, and the cattle industry learned beef consumers were willing to pay those higher prices. As more cattle are sent to market, consumers will see beef prices fall this year, Peel said, noting pork and poultry consumption won’t increase much.
Declining prices will mean Oklahoma producers will need to monitor their costs to maintain profit margins. Peel pointed to hay, which is a primary feed in Oklahoma. Producers need to feed their cattle high quality hay, reduce hay spoilage and monitor the amount of hay given to cattle, he said.