Winter Storm’s Effects Has Long Tail; Peel

A major winter storm disrupted Thanksgiving travel last week and will have a variety of effects for some time, said Derrell Peel, Oklahoma State University agricultural economist, in a letter to Extension agents called Cow/Calf Corner.

The latest snow and cold hampered an already difficult crop harvest.  Though frozen conditions may increase access to muddy fields, deep snow in some areas will add delays to corn harvest and may further affect crop quality.

On Nov. 25, 84% of the corn harvest was completed, well behind the average of 96% for the date.  Corn harvest was 68% complete in South Dakota, 57% in Wisconsin, 56% in Michigan and just 30% in North Dakota.  Many of these areas were hit by significant snow and blizzard conditions in this latest storm.




Winter weather often affects cattle production, reducing production and increasing costs for ranches and feedlots.  Severe weather inevitably means management challenges and higher costs for producers but may also have market effects if poor conditions are widespread enough.

The latest blast of winter weather affected a wide swath of cattle feedlots from Colorado, across parts of Nebraska and the Dakotas, part of Iowa and across Minnesota.  It looks like the major cattle feeding areas in Kansas and Texas missed the bulk of this storm, however.

While this storm may not be widespread enough to cause noticeable fed cattle market reactions, the storm may delay cattle finishing and disrupt slaughter flows in some regions and may help ensure that the seasonal peak is in for carcass weights.  Steer and heifer carcass weights pushed above year-ago levels the past few weeks with the latest steer carcass weights at 912 pounds compared with 900 pounds last year, and heifer carcasses, at 841 pounds, were up from 836 pounds a year ago on the same date.

However, for the year to date, steer carcass weights were down 3.3 pounds and heifer carcasses were down 4.4 pounds.  An early storm like this may set the stage for a long period of feedlot production challenges with effects persisting and accumulating through the winter.




Winter weather also often affects the demand side of the cattle market.  Winter storms may disrupt transportation and the flow of perishable products to markets.

Though people continue to eat during storms, travel and business disruptions often reduce restaurant traffic and power disruptions may reduce meat demand as consumers hunker down and get through the storm with minimal cooking and more use of prepared and ready-to-eat products.

For cattle and beef markets, winter weather may have negative effects on supply and demand depending on the location, severity and size of storm events.  The net effect is uncertain and often is difficult to isolate in aggregate market prices.

However, higher costs, lost production and reduced revenues affect the entire industry from cattle producers to beef retailers.




Cash cattle trading last week occurred at $117 to $120 per cwt on a live basis, up $2 to $3 from the previous week.  Dressed-basis trade was reported at $187 per cwt, up $3 to $7.

The USDA choice cutout Monday was up $0.49 per cwt at $232.61, while select was up $2.64 at $212.98.  The choice/select spread narrowed to $19.63 from $21.78 with 64 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday was $144.97 per cwt, up $0.35 from the previous day.  This compares with Monday’s Jan contract settlement of $142.15, down $0.12.