Unseasonably cool, wet weather in late August resulted in the best prospects for early planted wheat in several years, said Derrell Peel, Oklahoma State University livestock marketing specialist, in a letter called Cow-Calf Corner.
Rain across much of Oklahoma, especially in major wheat production areas, provided the moisture and cool soil temperatures necessary for wheat germination, Peel said. Early wheat establishment and growth could lead to earlier and more grazing potential this fall.
OPPORTUNITIES
In late 2022, cattle prices began the sharp trend up, leading to current price levels and opportunities, he said. Calf values have increased by nearly 135% in the three-year period, increasing from less than $1,000 a head to almost $2,300 per head.
The value of yearlings has increased more than 110% in the same period, Peel said. The stocker margin between the two levels has increased a little more than 50% since 2022, with a current value of gain of $1.99 a pound.
In other words, while a 475-pound steer sold for more than $4.81 a pound, the value of adding an additional 300 pounds of weight was just about $2.00 a pound, he said. All costs of production beyond the animal cost, plus any profit potential, must be covered by the value of gain.
Peel gave a value of gain illustration based on beginning and ending animal values at the time of writing. In the example, the value of winter wheat stockers next March was unknown but feeder futures provided an indication.
Deferred feeder futures were priced at a discount to current market values, limiting any potential to lock in stocker margins for the winter grazing period, Peel said.
CAREFUL EVALUATION ENCOURAGED
The 2025 stocker situation shown by peel showed stocker producers must carefully evaluate stocker enterprises this year. The combination of market focus on calves and calf prices, along with relatively cheap feedlot cost of gain, means the potential for stocker production was squeezed at the time of writing.
Stocker cattle numbers are limited, and significant numbers of calves have been sold early this year, he said. At the same time, feedlots have a strong economic claim on the limited feeder supplies and likely will purchase and place lighter weight feeders in feedlots.
In general, stocker opportunities are limited to starting with very lightweight animals and selling rather quickly at lighter feeder weights, Peel said.
The potential for substantial winter wheat forage begs the question of what the most valuable use of that forage will be, he said. Wheat forage also may be used for cow/calf production or perhaps to “stocker” replacement heifers in development for breeding.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $238.00 per cwt to $245.11, compared with last week’s range of $242.51 to $246.00 per cwt. FOB dressed steers and heifers went for $378.85 per cwt to $382.85, compared with $381.50 to $385.49.
The USDA choice cutout Tuesday was down $5.91 per cwt at $392.62 while select was down $5.63 at $373.17. The choice/select spread narrowed to $19.45 from $19.73 with 118 loads of fabricated product and 49 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $433.88 per cwt, and 50% beef was $153.47.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.05 to $1.20 a bushel over the Dec corn contract, which settled at $4.29 1/2, up $0.06 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $361.63 per cwt, down $0.52. This compares with Tuesday’s Sep contract settlement of $358.32, down $0.47.