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Good profit potential for cattle forage programs
STILLWATER, Okla. – It appears there will be little interest in grazing winter wheat in Oklahoma this year mainly because of various wheat productions risks. This despite the fact that the overall cattle market situation favors forage based grains, with considerable return potential.
“You could say that the cattle markets are begging folks to graze this year, but without wheat, producers will have to find some creative alternatives to capture those profits,” said Derrell Peel, Oklahoma Cooperative Extension Service livestock marketing specialist.
Peel said stocker budgets suggest strong values for gain, for a wide weight range of feeder cattle.
“That’s a testament to the unusual and dynamic market production conditions this fall,” he said.
Using recent auction prices coupled with strong feeder cattle futures, the average value of gain for a 475-pound steer gaining a total of 440 pounds – with an ending weight of more than 900 pounds – is about 90 cents per pound between now and next March.
“That’s a gross margin of about $390,” Peel said. “It’s not often that feeder cattle markets offer this high of value of gain nor this wide of weight range, let alone both at the same time.”
These factors collectively are the reason why Peel feels that producers with any and all types of forage resources should evaluate potential stocker cattle or retained ownership programs.
“This may mean grazing other cool season forages, stockpiled summer forages or back grounding in dry lots with harvested forages,” he said. “It comes down to a question of what sorts of production schemes are possible, and what will be the cost of gain.”
And while risk management should never be overlooked, Peel believes the generally good potential for forage-based stocker programs is likely to persist for the foreseeable future.
Producers in the northwestern region of the state will get an opportunity to explore some of these programs and options in December, as Gregg Highfill, Cooperative Extension area livestock specialist, is planning a series of meetings on the topic.
“In general, we had very good growing conditions this summer for forages,” Highfill said. “Producers have been able to replenish their hay supplies. In some cases they have an abundance of hay.”
Producers will still have to provide feed in addition to hay or standing forage for cattle to obtain good weight gains.
“That means it will be more labor intensive than putting cattle out on wheat pasture,” Highfill said. “The questions become, do they have the labor, do they have the feed resources and do they have the feeding facilities. Many of them do so this type of a program might be a timely opportunity.”
The December meetings will take place in four locations, two on Dec. 11 and two on Dec. 13. For more information, producers should contact Highfill and the Cooperative Extension Northwest District Office at 580-237-7677.
The statewide Oklahoma Cooperative Extension Service is part of Oklahoma State University’s Division of Agricultural Sciences and Natural Resources.
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