Agricultural producers and lenders alike are reporting a great amount of interest in wheat grazing as the best possibility for returns on wheat acres. Experienced cattle producers and lenders alike know cheap feed can encourage heavier carcass weights.
“I believe it is better stated that cheap feed encourages cattle feeding and as long as feedlots have incentives to market cattle aggressively, carcass weight increases beyond normal seasonal levels are not expected,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.
Peel expects stocker cattle prices to strengthen some in the coming weeks as wheat pasture demand develops, perhaps a bit ahead of the bulk of the fall run of calves in late October and November.
The September Cattle on Feed report showed on-feed inventories at 101.5 percent of last year. August placements were 115.1 percent of last year with marketings at 117.6 percent of one year ago.
“Placements and marketings were distorted by two extra days this August compared to 2015,” Peel said. “Nevertheless, both placements and marketings were up year over year. While feedlots are clearly moving more cattle through, the on-feed total is not growing on a year-over-year basis as marketings outpaced placements in August.”
The strong pace of marketings is confirmed with August cattle slaughter up sharply year over year. Heifer slaughter outpaced steer slaughter in August, increasing by 13 percent from last year on an adjusted daily average basis. Steer slaughter increased 5.4 percent year over year.
“For the balance of the year, steer slaughter is expected to moderate, still up but by a smaller amount on a year-over-year basis, while heifer slaughter will continue sharply higher compared to last year,” Peel said.
On a daily average basis, August beef production was up 6.9 percent compared to one year ago and is up 5.9 percent on a year-to-date total as of this writing. Cattle carcass weights have been increasing seasonally for several weeks.
“Steer carcass weights were 903 pounds in the latest data, up 44 pounds from the seasonal low 16 weeks ago, comparable to a 55 pound seasonal increase last year over the same 16-week period,” Peel said.
Steer carcass weights currently are 13 pounds less than the same date last year and there are indications that feedlots have pulled fall marketings ahead in August and early September.
“Carcass weights will likely continue increasing to a seasonal peak in about another month but are expected to remain well below year ago levels,” Peel said. “This will partially offset increased slaughter, thus moderating year-over-year increases in beef production in the fourth quarter.”
Oklahoma ranks fifth in the nation in the number of total cattle and calves, with cattle accounting for approximately half of the state’s agricultural cash receipts on an annual basis, according to USDA Agricultural Statistics Service data.