Stocker Producers Brace For Margin Squeezes As Feedlots Take Advantage Of A Low Cost Of Gain

By Dr. Derrell Peel

Oklahoma State University Extension Livestock Market Economist

In his recent observations of the cattle market at auction barns, Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel, says there is major market adjustment happening between light and heavy weight cattle and calves and yearlings. He explained to Radio Oklahoma Ag Network Farm Director Ron Hays what is driving this adjustment, that he says is squeezing profit margins in certain segments.

“We continue to see stronger prices for these light weight cattle and these adjustments have a particularly important implication for stocker producers,” Peel said. “That means that stocker producers looking ahead to graze out wheat or for summer stockers, really need to think about margin squeezes that are happening there and maybe what that tells them about what kind of cattle they want to buy and how long they want to own them.”