As Drought Persists, Cow Herd Liquidation Continues

 

Oklahoma Farm Report

19 Sep 2022

 

Senior Farm and Ranch Broadcaster, Ron Hays, is talking about cow herd liquidation with commentary from OSU’s Extension Livestock Market Economist, Dr. Derrell Peel and Bob Rodenberger with Stockman Oklahoman.

 

“There is little doubt that the drought is accelerating the herd liquidation,” Peel said. “It started last year. We were already in cyclical liquidation, again, from that peak in 2019, but the drought last year accelerated it.”

 

Until things change moisture-wise, Peel said there is no stopping the liquidation, but over the next three years, the cow herd can be stabilized and rebuilt.

 

Bob Rodenberger with Stockman Oklahoman says most of the cattle producers he is working with are doing a good job of orderly liquidation. In smaller barns in rural America, Rodenberger said cow kill is still up, but people are culling old and open cows that shouldn’t remain in the herd regardless of drought.

 

“I haven’t got into a set of true, young cows yet, which is very positive from my standpoint,” Rodenberger said.

 

Calves are coming to town a little earlier, Rodenberger said, which is to be expected.

 

“We are in survival mode,” Rodenberger said. “People are doing what they should be doing. Nothing has got into panic mode yet. I know a lot of us are thinking panic, but people are just responding normally. Relieving their cow, trying to get her into the winter in good shape, selling down to however much hay they’ve got available, and the herds that are selling more than normal have no hay, are short on water or both of the above.”

 

Many are comparing the current drought situation to the one that happened a decade ago.

 

“We are looking at 2011 and 2012 again and the thing that we are seeing that we didn’t see then is the higher market in the middle of the drought,” Rodenberger said.

 

In the drought of 2011 and 2012, Rodenberger said there was not a higher market until 2013 and 2014.

 

“If you think back, that’s when the rain, we finally got restocked and reestablished our grasses and our wheat pasture, and then the market came back,” Rodenberger said. “We are maintaining a good stocker market and a good feeder market through all this so, there is optimism down the road.”

 

The stockers being purchased right now for wheat or grass, Rodenberger said, have a tremendous margin in them if they can be contracted or hedged six months down the road...

 

more, including audio [5:54 min.]

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