Peel Says Cold Weather Compounds Tight Beef Supplies

Winter time is hitting in a big way across the midwest and now into the eastern part of the United States. That impacts both beef movement and the ability to move cattle around. Oklahoma State University Livestock Market Economist Dr. Derrell Peel said winter weather is having widespread impact with cold temperatures. The storm was a dry cold at least for the southern plains, as the storm came in and there was no rain at the front of the weather system.

"So it didn't cause the kinds of problems for feeder cattle producers in terms of management headaches could certainly have happened in many other cases," Peel said. "I don't think its had a big impact on feeder cattle markets for the most part. Some disruption of movement of cattle depending on sale date this past week or so. But in the fed cattle markets probably a little bit more impact. It was difficult to sort cattle out and move them to market. Supplies were relatively tight already and it caused a little bit concern about available slaughter supplies, so we did see fed cattle prices trade through that process to a new high level on a live weight basis up to $1.72 a pound. We did some impact there on the market. If there were production impacts, those will become more evident as we move forward in terms of lost production and so on as a result of this.

Currently the market continues to deal with tight supplies and also large carcass weights on fed cattle that have effected beef production.   The cold weather may take a little weight off fed cattle, but it looks for the market to move higher as there is good strong support close to the current levels. This year total cattle slaughter is down about 7.2 percent and beef production for the year is off about six percent. Peel expects a 5.5 to six percent decrease for year over year beef production. Looking ahead Peel is looking for additional decreases in beef supplies.