Most of Oklahoma has received significant rain the past 10 days with totals generally ranging from one to three inches, with localized totals over 8 inches. Some of the best rain fell in some of the worst drought area of western Oklahoma. Much of northern Texas and the Texas Panhandle also received good rain. While this moisture does not eliminate all the drought conditions, the timing is superb for forage growth, not to mention the wheat crop in the region.
This moisture ensures initial forage growth in warm-season pastures and provides producers an opportunity to assess the health of those rangelands after extended periods of stress. The temptation will be to stock pastures too heavily and too early. Patience and discipline are needed to ensure forage recovery and long term productivity. However, producers may finally be able to plan production offensively compared to being always on the defense.
Cattle and beef markets have continued strong on continued tight supplies. Calf and stocker prices have holding close to spring highs on good summer grazing demand, which may be extended a bit with the recent rains. Limited numbers of wheat graze-out feeder cattle will be marketed over the next month, mostly in May. Feeder cattle prices have been steady; limited by the sharp discount on deferred Live Cattle futures. Cull cow prices in April are about 9 percent higher than this time last year on reduced cow slaughter. Total cow slaughter is down 7.3 percent for the year to date compared to one year ago, with a 1.9 percent increase in dairy cow slaughter partially offsetting a 17.5 percent year over year decrease in beef cow slaughter. Total steer and heifer slaughter is down 6.8 percent for the year to date from last year, with heifer slaughter down 7.6 percent so far this year. Reduced heifer and cow slaughter in 2015 suggests that herd expansion is continuing.
Choice boxed beef averaged the fourth highest weekly average in history last week with Select boxed beef at the fifth highest weekly average. Fed cattle traded lower at $160-$161/cwt. in the southern plains last week. Seasonal supplies will build into May and June and push fed cattle prices lower into summer but how much lower is a question. Feedlot placements have been down year over year for 11 of the past 12 months and were down 7.5 percent in the November through February period. This is a total of 536 thousand head fewer cattle placed over the four months. Placements are expected to be down again for March in the upcoming April Cattle on Feed report. Live Cattle futures have stubbornly maintained a sharp discount to current cash markets based on normal seasonal summer price declines and beef demand concerns. Reduced placements in recent months suggest that seasonal supply pressure will be less than typical going into summer and, despite record wholesale and retail beef price ratios to other meats, there is little indication that beef prices are weakening relative to pork and poultry prices for the foreseeable future. I suspect that fed cattle prices will get through the summer at higher levels than futures currently indicate, likely averaging in the mid to upper $150 range.