September 19, 2011

 

Northern US ranchers enhance calf output

 

 

Although Northern US ranchers are preparing to increase calf production, delayed wheat cultivation is aggravating prospects further for southern ranchers.

 

A dynamic among Canadian ranchers, who are taking on extra beef heifers even while cutting cow numbers to promote forward breeding potential, looks to be being mirrored south of the border, the USDA said.

 

"It appears that similar inventory adjustments could be occurring in the northern US," USDA analyst Rachel Johnson said, citing anecdotal evidence.

 

"Such changes could position cow-calf producers in northern areas to take advantage of the anticipated reduced supplies of cows and feeder cattle, beginning in mid-to-late 2012," Ms Johnson said.

 

Supplies of feeder cattle, those ready to be fattened on feedlots, are currently being boosted by an exodus of livestock from southern farms, where drought has left farmers without ample pasture or fodder.

 

Meanwhile, in the southern states, ranchers are preparing to lower their breeding plans even further, with the window closing soon on their last lifeline as sowings of hard red winter wheat for grazing have been held up by the extended drought.

 

"In Oklahoma, forage-only winter wheat generally needs to be planted by mid-September in order to produce significant fall and winter forage," Derrell Peel, at Oklahoma State University, said.

 

As of Sunday, only 1% of Oklahoma winter wheat had been sown, compared with 8% normally by now, according to USDA data.

 

While some areas of the state have received rain, including shows over eastern areas on Friday (Sep 16), "it will take two to three moisture events in order to establish and support fall wheat forage growth", Professor Peel said.

 

Without this wheat pasture, which for many farms "represents the last hope for winter forage for cow herds this year", ranchers will be forced to curb plans even further for taking in replacement heifers.

 

Whatever, Oklahoma "appears to be headed for an unprecedented year-to-year decrease in total cattle inventories", Professor Peel said.

 

And a report from Paragon Economics and Steiner Consulting warned that the "issue is critical for Texas producers as well".

 

Beef cow slaughter in the region encompassing Arkansas, Louisiana, New Mexico, Oklahoma and Texas has run 47% higher, since the start of July, than a year before.

 

Johnson said, "Only the most valuable cows will justify expenses for hay supplies to feed them through the winter, and calves will likely continue being placed in feedlots."

 

The impact on the market would be to "exert some downward pressure on fed cattle prices until the extra placements are worked through".

 

Live cattle for October delivery stood 0.3% lower at US$1.18575 a pound in late deals in Chicago.

 

The lot on Wednesday (Sep 14) touched US$1.2135 a pound, coming within US$0.02 of April's record high for a spot contract.