drought market and management considerations
DESCRIPTION
DROUGHT Market and Management Considerations. Derrell S. Peel Livestock Marketing Specialist. Livestock Marketing Information Center Data Source: USDA-AMS. Livestock Marketing Information Center Data Source: USDA-AMS. Livestock Marketing Information Center - PowerPoint PPT PresentationTRANSCRIPT
DROUGHT Market and Management Considerations
Derrell S. PeelLivestock Marketing
Specialist
BOXED BEEF CUTOUT VALUEChoice 600-900 Lbs. Carcass, Weekly
135
145
155
165
175
185
195
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-6204/25/11Livestock Marketing Information Center
Data Source: USDA-AMS
SLAUGHTER STEER PRICESSouthern Plains, Weekly
80
85
90
95
100
105
110
115
120
125
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-5204/25/11Livestock Marketing Information Center
Data Source: USDA-AMS
MED. & LRG. #1 FEEDER STEER PRICES700-800 Pounds, Southern Plains, Weekly
9095
100
105110115120125
130135140
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-4904/25/11Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
MED. & LRG. #1 STEER CALF PRICES400-500 Pounds, Southern Plains, Weekly
115
125
135
145
155
165
175
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-49A04/25/11Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
SLAUGHTER COW PRICESSouthern Plains, 85-90% Lean, Weekly
40
45
50
55
60
65
70
75
80
85
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-3504/25/11Livestock Marketing Information Center
Data Source: USDA-AMS
Market Impacts
• Limited…so far– Reduced summer stocker demand– Changed market timing of winter grazing– Cow market impacts just beginning
• In the next few weeks– More impacts on regional cow markets
• Long term – Pre-empt herd expansion and extend high prices
Spring Droughts are Tricky
• Risk of acting too soon– Rapid improvement is possible
• Risk of delaying actions– Loss of market value– Increased expenses– Production impacts
• Maximum cattle production and nutritional needs
Worst Drought Management Plan
Hold on
…to everything
…at all cost.
Drought Management Plan
• Start with worst case and work backwards to current situation.– Identify decision trigger points
• What has to be done• When decision must be made
Drought Management Plan
• Total Destocking– Lack of water – Total lack of forage production/infeasible to
purchase feed• Too late for rain to help
– Relocation of animals possible but difficult• Maintain Core Breeding Herd
– Young, dry, bred cows (7 years and less)– Reduce forage requirements
Reducing Forage Requirements
• Early weaning– Reduce forage and water requirements– Rebreeding – What to do with early weaned calves?
• Culling – Open cows/replacement heifers– Old cows, unsound (slaughter)– Older cows, physically sound (solo or maybe as pairs)– Cows over 7 years of age
Timing of Decisions from Late April• 2-4 Weeks
– Early weaning• Cows in early lactation will drop body condition rapidly and may not
rebreed– Cull open/old cows– Cull older cows if sold as pairs
• 1-2 months– Cull older cows
• With water, may be able to hold core herd for 3-4 months • Late Summer
– Total destocking or minimal core herd to winter
Post-Drought Plan
• Replacement females will be scarce and expensive
• Pastures need time for recovery– Depends on timing of end of drought
• Stocker production feasible while rebuilding breeding herd
ANNUAL AVERAGE CATTLE PRICESSouthern Plains
5565
758595
105
115125135
145155
1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
$ Per Cwt
500-600lbSteerCalves
700-800lbFeederSteers
FedSteers
C-P-0604/22/11Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
Drought Resources
• DASNR drought web page– http://agwater.okstate.edu/research-extension/dr
ought/drought.
– Financial planning (IFMAPS)– Tax Implications– Pasture and feed management– Nutritional management
• Government Programs (including CRP use)– http://www.agecon.okstate.edu/agpolicy/news.as
p
THANK YOU!