Beef market winter challenges continue

Mar 7, 2014
by WLJ

Another blast of severe winter weather moved across the U.S. at the beginning of March, causing problems for cattle producers and impacting beef distribution and consumption. Cattle and beef markets continue to exhibit volatility in the face of supply and demand disruptions. Boxed beef prices increased sharply in the last week of February with Choice values up $10/cwt to finish the week at $225/cwt. Fed cattle prices increased to end the week at about $150/cwt.

Winter weather is contributing to reduced beef production in 2014. Beef production for the year to date is down 6.9 percent compared to last year with total cattle slaughter down 7.5 percent year over year. Reported average cattle carcass weights have averaged about 4 pounds heavier so far this year but this masks some of the underlying cattle production issues.

Overall cattle carcass weights are a function of the carcass weights of individual classes of slaughter cattle, as well as the composition of cattle slaughter by class. Average steer carcass weights are about a pound lighter so far this year, while heifer and cow carcass weights are slightly heavier. However, steer slaughter is the largest slaughter component and is a larger percentage of total slaughter this year contributing to a higher cattle carcass weight average even with lighter steer carcasses. For the year to date, steer slaughter is down 6.5 percent; heifer slaughter is down 10.7 percent; and cow slaughter is down 11 percent, all compared to the same period last year.

In Oklahoma, cattle producers have faced an unusually large amount of cold weather which has added many challenges to provide water and extra feed for cattle. The cold, dry weather since early January stopped wheat growth and resulted in rapid depletion of wheat pasture. Many winter stockers were marketed early and producers using winter wheat to support cows have had to make other feed arrangements. Oklahoma had generally abundant hay supplies this winter but increased feed requirements are likely depleting hay supplies quickly.

With many entering calving season, there are many challenges in managing newborn calves in cold weather. Cow nutritional requirements increase dramatically with calving and lactation and it is a challenge to maintain cows in condition to rebreed on schedule this spring. Feed quantity and quality are both critical after calving to avoid impacts, not only on the current calf crop, but also on reproductive performance that will affect future production.

Winter storms impact cattle performance in feedlots and those impacts will be evident in the market for several weeks. Additionally, later storms that occur during spring calving season have more potential for longterm impacts on cattle production for many months.

Winter weather takes cattle performance and production out of the system that is never recovered and further reduces beef supplies in an already declining beef production situation. — Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist