Ice Storm Hits Plains Hard But Brings Moisture

Last weekend’s ice storm brought significant damage to parts of the Plains, but the weather generally was less severe than expected, and most areas received very beneficial rain totaling one to three inches.

That moisture will help alleviate rapidly expanding drought conditions across the state, said Derrell Peel, Oklahoma State University Extension livestock specialist, in the Service’s weekly Cow/Calf Corner.

The latest Drought Monitor showed 88% of Oklahoma had drought conditions ranging up to “extreme drought”.  This compares to just three months ago when 62% of the state had no dry conditions.

Dry, cold weather through December and early January slowed or stopped wheat growth, leaving pastures in increasingly poor condition, Peel said.  Many wheat pastures are very short, forcing producers to increase hay feeding or move cattle to other pastures or to market.

 

HAY STOCKS VARIABLE

 

Total US stocks Dec. 1 were up 0.9% from a year ago although state totals differed widely.

The report confirmed the effect of drought in the southeast with Alabama hay stocks down 34.4% year over year, Georgia down 13.6% and Mississippi down 5.3%.

Texas, which has had the largest state hay stocks over the past 15 years, was up a whopping 25% to the largest level since 2007.  Oklahoma, with the third largest December hay stocks, was up 4.6% along with Arkansas, up 11.4% and Kansas (fifth largest state stocks), up 3.9%.

December hay stocks were 9.1% lower in South Dakota, with its second largest inventory, as were North Dakota, down 7.8%; Nebraska, down 9.85; Missouri (fourth largest hay stocks), down 4.5%, and Iowa, down 19.2%.

 

FEEDER PRICES STRONGER

 

Cash feeder cattle prices have started 2017 generally stronger, Peel said.  Volumes also are up.  The combined Oklahoma weekly auction volume for the first full week of January was more than 44,000 head, sharply higher than the 28,000 for the same week last year, which may reflect cattle sales due to poor wheat pasture conditions as well as cattle carried over from 2016.

Some producers may be hoping to buy a second set of stockers for wheat graze-out, assuming wheat pasture conditions improve, he said.

Cash fed cattle prices have carried end-of-year strength from 2016 into 2017, Peel said.  Immediate feedlot supplies may be relatively tight due to aggressive marketing in late 2016 and weather effects that slowed performance.

Live and feeder cattle futures have been extremely volatile this month with volatility likely to continue, which will continue to hamper the usefulness of futures as risk management tools, he said.

Boxed beef prices dropped sharply in the first 10 days of January as packers apparently flushed out the beef pipeline following the holidays.  However, choice boxed beef prices appeared to stabilize at the end of last week.  The next couple of weeks likely will provide a better picture of underlying trends in boxed beef and cattle markets.

 

CASH CATTLE TRADE QUIET

 

Average fed exchange auction prices last Wednesday were $2.38 per cwt higher at $119.17, versus $116.79 a week earlier.  Cash cattle then traded at $118 to $120 on a live basis, steady to up $2.50.  Only a few dressed-basis trades were reported at $186 against the previous week’s $188.

The USDA’s choice cutout Tuesday was up $0.23 per cwt at $191.62 per cwt, while select was down $0.23 at $187.23.  The choice/select spread widened to $4.39 from $3.93 with 90 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $132.56 per cwt, up $0.57.  This compares with Tuesday’s Jan settlement of $130.92, up $0.47.