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The Oklahoma Stocker Industry. Derrell S. Peel Oklahoma State University. The Beef Industry. Demand Marketing System Production. Cattle and Beef Markets. Demand What gets produced How much gets produced Who gets it. Cattle and Beef Markets. Marketing System

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the oklahoma stocker industry

The Oklahoma Stocker Industry

Derrell S. Peel

Oklahoma State University

the beef industry
The Beef Industry
  • Demand
  • Marketing System
  • Production
cattle and beef markets
Cattle and Beef Markets
  • Demand
    • What gets produced
    • How much gets produced
    • Who gets it
cattle and beef markets5
Cattle and Beef Markets
  • Marketing System
    • Moves products from “Gate to Plate”
    • Time, Place and Form functions
      • Storage (When)
      • Transportation (Where)
      • Processing (What Changes)
cattle and beef markets6
Cattle and Beef Markets
  • Production
    • How things get produced
      • What resources are used
slide9

U.S. Beef Cows By Region

Percent of U.S. Total, 2002

NORTHEAST

NORTHWEST

NORTHERN

ROCKIES

14.3

GREAT LAKES

4.1

NORTHERN

PLAINS

2.2

1.0

6.9

MIDWEST

12.1

SOUTHERN

ROCKIES

APPALACHIAN

SOUTHWEST

7.1

EASTERN

SEABOARD

GULF

3.9

SOUTHERN

PLAINS

4.7

6.0

SOUTH

4.0

7.0

26.8

U.S. Total = 33,099,700 head

slide11

Regional Cattle and Meat Flows

Cattle Flow

Meat Flow

slide12

Major Cattle Feeding States and Fed Cattle Slaughtering Plants (Four Largest Firms, 1998)

IBP

ConAgra

Excel

National Beef/Farmland

7 Major Cattle Feeding States

the u s stocker industry
The U.S. Stocker Industry
  • A very important but poorly understood sector of the beef industry
    • geographically widespread
    • diverse production systems
    • hard to measure
characteristics of stocker production
Characteristics of Stocker Production
  • Animal Growth (versus fattening)
  • Use of Forages (versus concentrates)
  • Viable Enterprise
    • Time Required
diversity of stocker production
Diversity of Stocker Production
  • Grazing
    • Summer
      • Season Long/Early Intensive
      • Native Range/Tame Pasture
      • Crop Aftermath
    • Winter
      • Annual Cool Season
      • Perennial Cool Season
diversity of stocker production20
Diversity of Stocker Production
  • Semi-confinement
    • Put and Take
    • Creep Feeding
    • Dry Winter
  • Confinement
    • Harvested Forages
slide21

Regional Stocker Cattle Production

Fall

Scattered

Mixed

Summer

Winter

slide22

California

January 1 Stocker Ratio, 2002

Washington

44.1%

Montana

N Dakota

27.6%

Oregon

63.1%

59.1%

Idaho

S Dakota

Wyoming

56.4%

69.2%

42.1%

Iowa

Nebraska

96.0%

Utah

89.0%

Colorado

75.5%

Kansas

Mo

88.7%

Ky

144.3%

78.6%

74.1%

68.84%

New

Mexico

Tn

Okla

75.0%

71.7%

123.5%

Al

Ga

77.4%

Ar

69.3%

Texas

64.3%

74.1%

U.S. Ave., 75.2 %

Florida

45.7%

slide23

California

January 1 Stocker Ratio, 2002

Washington

44.1%

Montana

N Dakota

27.6%

Oregon

63.1%

59.1%

Idaho

S Dakota

Wyoming

56.4%

69.2%

42.1%

Iowa

Nebraska

96.0%

Utah

89.0%

Colorado

75.5%

Kansas

Mo

88.7%

Ky

144.3%

78.6%

74.1%

68.84%

New

Mexico

Tn

Okla

75.0%

71.7%

123.5%

Al

Ga

77.4%

Ar

69.3%

Texas

64.3%

74.1%

U.S. Ave., 75.2 %

Florida

45.7%

unique role of winter stockers
Unique Role of Winter Stockers
  • Fall demand for wheat stockers helps offset seasonally large fall marketings of calves
  • Helps stabilize seasonal price patterns
what is the job of the stocker industry
What is the “Job” of the Stocker Industry?
  • Stocker gains are the cheapest beef cattle gains
  • Beef industry flexibility
  • Feed industry balance
  • Quality Improvement
the production role of stockers
The Production Role of Stockers
  • Utilize forages for cheap gain
  • Increase feeder cattle weight/age
  • Upgrade cattle quality
the inventory role of stockers
The Inventory Role of Stockers
  • Allocate feeder cattle supplies over time
    • seasonally
    • year-to-year
  • Provide variation in cattle slaughter age
size of the stocker industry
Size of the Stocker Industry
  • On January 1, Stockers = 20% of cattle inventories
  • On July 1, Stockers = 8% of cattle inventories
the market balance role of stockers
The Market-Balance Role of Stockers
  • Maintain economic balance between livestock, grain and forage markets
    • respond to economic shocks
stocker economics price levels and price spreads
Stocker Economics: Price Levels and Price Spreads
  • Profit potential of stocker enterprise is determined buy/sell spreads
  • High prices = Large price spreads
  • Low prices = Small price spreads
value of stocker gain march 1998
Value of Stocker GainMarch 1998
  • 400-500 lb. steer price = $104.45
  • Beginning value = $470.03/head
  • 700-800 lb. steer price = $75.81
  • Ending value = $568.58
  • Value of 300 lbs. gain = $98.55/head or $0.328/pound
value of stocker gain july 1998
Value of Stocker GainJuly 1998
  • 400-500 lb. steer price = $77.98
  • Beginning value = $350.91/head
  • 700-800 lb. steer price = $70.01
  • Ending value = $525.08
  • Value of 300 lbs. gain = $174.17/head or $0.581/pound
sources of profitability in the stocker industry
Sources of Profitability in the Stocker Industry
  • Selling Feed
    • Returns to forage
  • Management Services
    • Upgrading cattle quality
  • Speculation
    • Holding cattle over time
the stocker industry dilemma
The Stocker Industry Dilemma
  • When prices are rising:
    • Buy/Sell margins widen
    • Trend is positive
  • When prices are falling:
    • Buy/Sell margins narrow
    • Trend is negative
stocker industry adjustments
Stocker Industry Adjustments
  • Change beginning weight
  • Intensity (rate of gain)
  • Length of time
  • Animal quality
  • Steers versus heifers
major factors affecting stocker profitability
Major Factors Affecting Stocker Profitability
  • Purchase Price
  • Time
  • Feed Cost
  • Animal Performance
summary
Summary
  • Stocker industry plays a vital role in the cattle industry
  • Southern Plains winter wheat pasture grazing plays a unique role
  • Stocker production is especially important in Oklahoma
slide51

OKLAHOMA COOPERATIVE

EXTENSION SERVICE