OSU's Dr. Derrell Peel Goes In Search Of The Elusive Stocker Industry

By Dr. Derrell Peel

Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel examines the elusive nature of the stocker side of the cattle business when seeking to understand it from a statistical standpoint.

"The stocker sector is the most diverse and least understood part of the U.S. cattle industry. Stocker (or backgrounding) production provides vital production and marketing system values to the beef industry. Stocker production happens in a wide variety of different situations and environments in many regions of the country. This illustrates the critical role of the stocker sector in providing flexibility to enhance beef industry competitiveness including adjusting production in response to feed and forage market changes; enhancing the quality of feeder cattle by adding weight and age to stocker cattle; and regulating the flow of cattle from cow-calf production to the feedlots. The stocker sector is thus an essential shock absorber for the beef industry. Unfortunately, little data exists to fully understand and analyze the varied activities and actions that make up the stocker sector. A new survey in Oklahoma aims to begin filling that data void.

"The 2016 U.S. calf crop was 35.1 million head and, while we know that a significant number of those calves will flow through some sort of post-weaning growing program, we do not actually have any measure of the size of the stocker industry or total stocker production annually. From cattle inventory reports on January 1 we can calculate an estimate of the total supply of feeder cattle outside feedlots nationally and for each state. We can get a national estimate again on July 1 if USDA-NASS provides the mid- year cattle inventory report (this report has been omitted two of the last four years). Though the estimated feeder supply is the only measure available, it is not truly a measure of the stocker industry as it includes suckling calves as well as weaned stockers at any point in time. Moreover, stocker production usually involves programs that vary between 3 and 6 or more months in duration which means that an inventory snapshot once (or maybe twice) a year does not capture the flow of animals through stocker production systems. Additionally, we have only very coarse estimates of the movement of cattle around the country before and after stocker production.

"Oklahoma is an important stocker production state. The January 1 inventory confirms that there is a significant net inflow of stocker cattle into Oklahoma for winter grazing. Additionally, stocker production occurs year around in Oklahoma utilizing a wide variety of native and introduced pastures, though no data are available to measure the industry other than the January inventory report.