Monday, March 30, 2015


From the Oklahoma Cooperative Extension Service
March 30, 2015
Beef herd rebuilding: What’s next?
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

The long-awaited end to beef cow herd liquidation happened in 2014 as the industry abruptly switched to expansion.  The 2.1 percent increase in beef cow numbers in 2014 was more than generally expected but not a big surprise as the conditions were right for such a turnaround. Modest growth in heifer inventories has occurred since 2012.  It wasn’t until 2014 that beef cow culling decreased enough to combine with heifer retention and result in herd growth.  This leads to a number of questions including how much additional herd growth is needed; how fast can it happen; and where will it take place.  The answers to these questions are not completely apparent at this time and will depend on a number of factors yet to be determined in the coming years.  However there are some indications already in place.

After a brief attempt at expansion in 2004 and 2005, the industry has experienced unplanned herd liquidation.  I mean unplanned in the sense that it was not typical cyclical factors that caused the liquidation.  It was not, for the most part, low cattle prices but rather cost shocks that caused low returns and liquidation between 2006 and 2010.  Widespread drought forced additional liquidation between 2011 and 2013.  The question of how much growth is needed will depend on domestic and international market conditions over the next few years as herd growth occurs. It will depend also on things such as carcass weights that will determine total beef production relative to slaughter rates.  At this point I see little reason why the cow herd should not rebuild to at least the level of the truncated expansion in 2007-2008…roughly 32.5 million head.  That would suggest another 2.8 million head beyond the January, 2015 level. This implies total herd growth of nearly 9.5 percent in the next few years.  Time and market conditions will, however, determine exactly what the size potential is for the industry.

How long will it take?  At the 2014 rate of 2.1 percent per year, it would take until 2019 to surpass the 32 million head level.  In the last complete cyclical expansion from 1990-1995, the average annual herd growth rate was 1.4 percent.  Leaving out the slow first year and tapering off the last year, the principal four years of expansion during this period averaged 2 percent per year.  In the current expansion, a single year of faster growth is very possible but it is unlikely that an annual growth rate much above 2 percent could be maintained for two or three years consecutively.  There are however, a number of regional factors that could slow down expansion. An average herd growth rate of 1.5 percent would take until 2021 to exceed 32 million head of beef cows. The question of how long is related to the question of where herd growth will take place.

In five Midwestern states from Missouri to Ohio, the beef cow herd in 2015 was 8.4 percent smaller than in 2008.  In the Appalachian states of Kentucky, Tennessee and West Virginia, the 2015 beef cow inventory was down 15 percent compared to 2008.  In both of these regions, the decrease in beef cows is largely the result of decreased forage acreage due to expanded crop production.  Lost pasture and hay production in these regions is not likely to return quickly, if ever.  The beef cow herd in these regions will grow but is unlikely to rebuild to previous levels.  The Northern Plains states of Nebraska and the Dakotas experienced a modest 2.9 percent decrease in the beef cow herd between 2008 and 2015.  Similarly, the 2008-2015 beef cow herd decrease in the Northern Rocky Mountain region of Montana and Wyoming was only 1.2 percent.  These regions will likely experience herd rebuilding but the two regions together are currently only 155 thousand head below the 2008 level.   The beef cow herd in other regions is down as well including the South (down 3.8 percent; the Great lakes region (down 4.7 percent); the Gulf region (down 8.1 percent); the Southern Rocky Mountain region (down 2.8 percent) and the Southwest (down 9.4 percent).  These five regions combined are down just over 500 thousand head from 2008 and will likely rebuild but drought will limit or slow the rate of growth in Southwest and Southern Rocky mountain regions.

The 2015 beef cow inventory of the Southern Plains region (Kansas, Oklahoma and Texas) was down 13.2 percent from 2008, a decrease of over 1.1 million head.  This represents 42 percent of the total beef cow herd decline between 2008 and 2015.  This region will clearly play a central role in U.S. beef cow herd expansion in the coming years.  Parts of the region are still experiencing severe to exceptional drought conditions.  The 6.2 percent herd expansion in 2014 in the Southern Plains may be difficult to maintain if drought conditions do not improve significantly.  Moreover, herd expansion could be halted or reversed if drought conditions redevelop in the region. 

While the final beef cow herd total for this expansion is unknown, it seems likely that the industry will be rebuilding or trying to rebuild for the remainder of the decade.  Much of the herd growth will be in the Southern Plains with proportionately more growth likely in the western half of the country compared to the eastern half.

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USDA Finalizes Procedures for Sorghum Referendum!

Release No.: 021-15
Sam Jones-Ellard (202) 660-2268
WASHINGTON, Feb. 19, 2015 – The U.S. Department of Agriculture (USDA) is announcing procedures for the upcoming referendum regarding the continuation of the Sorghum Checkoff Program and is announcing the dates it will conduct the referendum.

The Sorghum Promotion, Research, and Information Order requires that a referendum be conducted no later than seven years after the start of assessments, which began on July 1, 2008. For the program to continue, a majority of those voting must favor the continuation of the order.
USDA will conduct the referendum beginning on March 23, 2015, through April 21, 2015, at county USDA Farm Service Agency (FSA) offices for producers and the Agricultural Marketing Service office for importers. Ballots may be obtained in person, by mail or facsimile at county FSA offices, or via the Internet.
Any eligible person engaged in the production or importation of sorghum from January 1, 2011, to December 31, 2014, is eligible to participate. Individuals are required to provide documentation such as a sales receipt or remittance form that shows they engaged in the production or importation of sorghum.
The Sorghum Checkoff Program, and its 13-member board, is authorized by the Commodity Promotion, Research, and Information Act of 1996. The Sorghum Checkoff is intended to be a national, coordinated, self-help marketing program designed to strengthen the position of sorghum in the marketplace, maintain and expand existing domestic and foreign markets and uses for sorghum, and develop new markets and uses for sorghum.
The final procedures were published in the Nov. 18, 2010, Federal Register. The notice announcing the dates of the referendum was published in the Feb. 19, 2015, Federal Register.
For more information, contact Craig Shackelford, Marketing Specialist, Research and Promotion Division, Livestock, Poultry, and Seed Program, AMS, USDA, 22 Jamesport Lane, White, GA 30184; Telephone: (470) 315-4246; Procedures and additional information about the referendum can be found at:
Get the latest Agricultural Marketing Service news at or follow us on Twitter @USDA_AMS. You can also read about us on the USDA blog.
USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay voice users).

Friday, March 27, 2015


Ron Plain and Scott Brown
Ag Economics, MU   
March 27, 2015

Retail beef prices were record high for the third consecutive month
during February.  The price of fresh beef in grocery stores averaged
$6.028 per pound.  That was 4.1 cents higher than the month before and
75.7 cents higher than in February 2014.  Choice beef at retail
averaged $6.27 per pound.

Ground beef prices also set a new retail price record at $4.238 per
pound in February.

The 5 area price of slaughter steers averaged $159.90/cwt during
February, down $4.50 from the month before.  Record retail beef prices
and declining fed cattle prices left the wholesale–retail margin at a
record $2.581 per pound in February.  

There were 492 million pounds of beef in cold storage at the end of
February.  That is 20% more than a year ago and the most since April
30, 2013.  A strong dollar and labor problems at west coast docks may
have forced more beef into storage.

This morning the choice boxed beef cutout value was $250.43/cwt, up
$6.05 from the previous Friday and up $14.00 from a year ago.  The
select carcass cutout was $246.62/cwt this morning, up $2.06 from last
week and up $16.14 from a year ago.

Fed cattle prices were higher this week on light sales volume.
Through Thursday, the 5-area average price for slaughter steers sold
on a live weight basis was $163.98/cwt, up $2.48 from last week’s
average, up $11.72 from a year ago, and the highest for any week since
early January.  The 5 area average dressed price for steers was
$260.00/cwt, up $4.72 for the week and up $16.52 compared to a year

Cattle slaughter this week totaled 531,000 head, up 2.5% from the week
before, but down 9.7% from the same week last year. Year-to-date
cattle slaughter is down 7.1% and year-to-date beef production is down
5.0% compared to the same period last year.

The average steer dressed weight for the week ending on March 14 was
871 pounds, down 5 pounds from the week before, but up 15 pounds
compared to the same week last year.  Steer weights have been above
year-ago each week since June 14, 2014.

Feeder cattle prices at Oklahoma City were mostly $4 to $8 higher this
week.  Prices for medium and large frame #1 steers by weight group
were: 400-450# $301-$342, 450-500# $291-$324.50, 500-550# $286-$308,
550-600# $245-$289, 600-650# $243-$271, 650-700# $227.50-$248,
700-750# $210-$229.50, 750-800# $207-$221, 800-900# $194-$211.50, and
900-1000#, $179-$203.50/cwt.

The April live cattle futures contract settled at $162.70/cwt today,
up $4.35 for the week.  June fed cattle settled at $152.95/cwt, up
$2.48 from the previous Friday.  August fed cattle gained $1.90 this
week to settle at $150.00/cwt.

The April feeder cattle contract ended the week at $219.40/cwt, up
$3.20 for the week.  May feeders settled at $218.02/cwt which is $2.62
higher than the Friday before. The August contract ended the week at