By Dr. Derrell Peel
The U.S. is beginning to see expansion of the nation's beef cow herd. That was confirmed in the cattle inventory report released by the U.S. Department of Agriculture in January, but how fast expansion will continue is yet to be determined. Oklahoma State University Extension Livestock Economist Dr. Derrell Peel said one of the key factors will be how long cattle prices remain strong, to give the signal to cattle producers to go forward.
"The real key to a producer being willing to step out there, accepting that there is more financial risk and just more total dollars needed," Peel said. "The capital requirements are higher, but it really comes back to the same question that's been there in every cattle cycle previously and that's a producer's expectations about whether these prices are good enough, long enough, to make it worth it for me to invest in that heifer rather than take the immediate sale value that she has."
Radio Oklahoma Network Farm Director Ron Hays featured Peel on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
This isn't just a individual producer question, it's an industry question. Peel said an individual producer may decide not to keep a heifer, sell her and pockets the money, but that doesn't mean next guy won't take her home for his herd. He said heifer retention needs a broader view.
"It's kind of like the cow side, one man's cull is another man's new cow in this market and the same thing on the heifer side," Peel said. 'It's not just the individual decision, but the collective impact of that, across all producers, in terms of who is investing and retaining heifers and who is choosing to sell those animals right now."
Despite drought lingering across the Southern Plains region, cow-calf operators have jumped into building that mamma cow herd with both feet. Peel said he knew interest was there, but he has a little trouble with reconciling the rate of growth projected for Southern Plains relative to the Northern Plains region. He understands the Northern Plains did not experience the massive drought liquidation, so they weren't drawn down as much and weren't looking to expand as much. On the other side, Peel said for over a year the Northern Plains has had the highest prices for heifers and bred cows, so he thinks there is a disconnect there.
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