The first few weeks of the New Year are always a challenge for cattle and beef markets.
Derrell S. Peel, Oklahoma State University
The first few weeks of the New Year are always a challenge for cattle and beef markets. Whether it is January marketings of feeder cattle for tax purposes or post-holiday boxed beef pipeline issues, it always takes a couple of weeks to get a bead on cattle and beef markets in the new year. January 2024 has been particularly challenging with multiple winter storms disrupting feeder and fed cattle markets, as well as boxed beef markets.
With January 1 falling on a Monday, many Oklahoma auctions did not schedule sales the first week of the month. Most scheduled feeder sales occurred as planned the second week of January, but weather conditions and threats limited market demand and volumes. Most sales were cancelled the third week of January due to severe winter weather in the state. The combined Oklahoma auction report for January 19 showed a total feeder cattle volume of 1,694 head compared to 40,125 head for the same week one year ago. Some major auctions in Oklahoma have only had one sale so far in 2024 and icy conditions on the fourth Monday of January may impact some early week sales once again.
Cattle producers have been challenged with extended periods of sub-freezing weather that requires chopping ice and increased cattle feed requirements. Fortunately, most Oklahoma cattle entered the mid-January frigid weather with dry conditions and dry hair coats, which avoids some of the worst animal impacts. Some regions south and east of Oklahoma were not as lucky with rain preceding the freezing temperatures. It is also fortunate that the majority of cow-calf producers were not yet into the spring calving season. The forecast for late January is above-freezing temperatures but still cold and rainy which adversely impacts cattle.
Feedlots have been impacted by several winter storms starting with a storm in the central and northern plains after Christmas and another major storm in early January. Fed cattle performance is reduced and will be impacted for several weeks after storms. Fed cattle carcass weights are expected to decrease in the coming weeks as a result.
Boxed beef markets decreased the first week of January as retailers assessed holiday markets and sorted out post-holiday beef pipelines. However, the winter weather suspended some packing operations for a couple of days and boxed beef markets jumped in response to supply disruptions. From January 4 to January 17, Choice boxed beef price increased over $22/cwt. The current Choice boxed beef price is roughly $295/cwt. It will likely take another week or two to sort out both demand and supply conditions assuming no additional major disruptions.
The January Cattle on Feed report had no surprises with placements 96 percent of last year and marketings 99 percent of one year ago. The January 1 on-feed inventory was 102 percent of last year. The quarterly breakdown of steers and heifers in feedlots showed that the number of heifers on feed was the highest January 1 total in the data back to 1994.
