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Effects of Winter Storms Will Take Time to Work Through Cattle Markets

22.02.2011
Virtually all sectors of cattle and beef markets have been affected by two major winter storms that hit a week apart in February, leading producers to scramble to care for animals and maintain production.

“Significant snowfall and record low temperatures, especially with the wind chills, have disrupted markets and pushed both cattle and cattle managers well out of their normal operating ranges,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.

Worse, analysts expect it will take some time for ripple effects of the storms to work their way out of the system.

Spring calving is well under way. These cows are vulnerable, particularly from a nutritional standpoint. Nutritional stress could cause weak calves and more death loss this spring, and possibly poor rebreeding rates as well, that could affect the 2012 calf crop.

“It’s important to provide adequate quantity and quality of feed for cows in order to avoid loss of condition that may not be apparent until after they calve and begin lactating,” said Leland McDaniel, Carter County Extension director and agricultural educator.

Word-of-mouth reports indicated a number of stocker cattle have experienced poor performance and perhaps some weight loss for several days. The storms even caused some death loss, though it does not appear to have been widespread across Oklahoma.

“Many cattle on wheat had limited forage available, so they have already moved to market or will be moving very soon,” McDaniel said. “The winter storms caused several cattle auctions in Oklahoma to close, but they are back open and running again.”

Likewise, it does not appear that the winter storms caused feedlots to experience major cattle losses, at least those in the southern Great Plains states.

“There is little doubt that the cattle lost a bit of weight, which will take some time to recover, but it doesn’t appear that the weather will result in major fed cattle market impacts,” Peel said.

The amount of moisture in the two snow events was limited and concerns about muddy pens that often follow winter storms should be less than usual. However, the effects of the weather are likely to temper concerns about slaughter rates and beef production in the first quarter of the year.

“In short, the weather impacts on markets may not be great but are, in any event, supportive to a supply driven market,” Peel said.

Boxed beef prices dropped this past week and may be an indication of demand resistance to higher prices. However, analysts caution that the storms disrupted both consumption and beef shipments so the true state of beef demand is not clear at this time.

“It will take several days to reestablish the normal movement of beef,” Peel said. “It is not uncommon and unexpected to see boxed beef prices drop a bit after the strength of the last month.”

Peel believes that beef demand will be better indicated by the presence or absence of follow-through buying as the cattle industry moves into the middle of March.

Donald Stotts | Newswise Science News
Further information:
http://www.okstate.edu

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