The Norman Transcript

Headlines

November 14, 2012

Feedlot prospects worrisome for American cattle industry

NORMAN — Conversations about Mayan prophecies of doom have been all the rage this year, but for the U.S. cattle industry, dim feedlot prospects and exceptional drought have been much more worrisome topics.

Not only are feedlots paying record prices for feed and essentially record prices for feeder cattle, it has been recognized for quite a while now that the supply of feeder cattle will be increasingly inadequate to maintain feedlot inventories at any price.

Looking ahead, one of the biggest concerns is beef demand. Obviously, if demand were strong enough, the margin squeeze felt by feedlots — and packers — could be eliminated.

“The next two years will put beef demand in relatively uncharted waters so it is impossible to know exactly what to expect,” said Dr. Derrell Peel, Oklahoma State University Extension livestock marketing specialist. “However, it seems likely that beef demand will continue to limit retail and wholesale beef prices relative to the input price squeeze that feedlots, as well as packers, will continue to face.”

Drought is another culprit that has contributed to feedlots’ difficult circumstances. Two years of unplanned additional herd liquidation has pulled cattle supplies lower than market conditions appear to support.

“Without the 2012 drought, corn prices might be closer to $5 per bushel instead of near $8 per bushel,” Peel said. “While these short-run factors would have changed the feedlot picture somewhat, they do not change the fact that the role of the feedlot sector is changing and must change fundamentally in the future compared to how it has operated in the past.”

Since the 2006 crop year, season average corn prices have averaged $4.50 per bushel. From the 1965 through 2005 crop years, corn prices averaged $2.15 per bushel. In that time period, in only three years — 1980, 1983 and 1996 — did the season average corn price exceed $3 per bushel. Crop-year-average corn prices have exceeded $3 per bushel every year since 2006.

Text Only | Photo Reprints
Headlines
  • Braddy_1. Norman North teen struck by freight train recovering with therapy

    A Norman North teen struck by a freight train in May is on the road to recovery and ready to get back to school after spending most of his summer in a hospital. Harrison Braddy, 16, has been staying busy with rehab and physical therapy ...

    July 28, 2014 1 Photo

  • Storm victims face loan dilemma

    The tornadoes, flooding and hail that struck Oklahoma last year left hundreds of millions of dollars in property damage, causing many home and business owners to seek help in the form of low-interest federal loans....

    July 27, 2014

  • Teen critical after rescue

    A 17-year-old Yukon male was transported to the hospital Sunday after a near drowning incident at Lake Thunderbird in the Party Cove area. Emergency crews responded to the lake after a report of a possible drowning around 5:30 p.m. ...

    July 27, 2014

  • Migrant kids go to Mass

    The services have all the elements of a typical Sunday Mass — singing, scripture, a sermon, prayers, communion and worship....

    July 27, 2014

  • Police identify woman found dead Monday

    Norman police have identified a woman found dead in her home at 2202 Donna Drive Monday afternoon. Police responded at 1:25 p.m. to the residence of Cassandra Thompson, 30, after receiving a report that she had not shown up for work ...

    July 29, 2014

  • Residents speak out about document regarding shelter photos

    Norman and metro-area residents showed up in overwhelming numbers, many in red shirts, for an Animal Shelter Oversight Board meeting Monday night demanding for their opinions to be heard....

    July 29, 2014

  • Cool snap brings heat relief to Oklahoma, Arkansas

    OKLAHOMA CITY — The dog days of summer are coming in with a whimper. Weather forecasters say a cold front headed for Oklahoma and Arkansas will bring unseasonably cool temperatures and a chance of rain through next week....

    July 29, 2014

  • Mixon’s attorney says athlete acted in self-defense

    The attorney for Oklahoma running back Joe Mixon says the incident that left a 20-year-old female OU student with multiple facial fractures was a case of self-defense. “This past Friday morning, Joe Mixon found himself in a situation ...

    July 29, 2014

  • Be ready for ‘prolonged’ Gaza war, prime minister says

    GAZA CITY, Gaza Strip — Signaling an escalation of Israel’s Gaza operation, Prime Minister Benjamin Netanyahu told Israelis Monday to be ready for a “prolonged” war, and the military warned Palestinians in three large neighborhoods to ...

    July 29, 2014

  • FBI defends search for Oklahoma City bombing video

    SALT LAKE CITY — The FBI thoroughly searched its archives and found no evidence that more videos of the Oklahoma City bombing exist, agency employees told a judge Monday in a trial that has rekindled questions about whether any others were ...

    July 29, 2014