Oklahoma cattle auction keeps selling despite USDA shutdown

Reuters News
Posted: Oct 15, 2013 6:16 PM
Oklahoma cattle auction keeps selling despite USDA shutdown

By Michael Hirtzer

(Reuters) - One of the nation's largest and oldest cattle auctions was not going let the shutdown of the U.S. government affect operations, so it now reports sales privately via the Internet to ensure its benchmark prices get out.

Typically the U.S. Agriculture Department would distribute the prices for the thousands of calves and yearlings that are bought and sold there each week. But with the government shut down, the owners adopted an alternative price outlet.

"We've always been dependant on USDA putting out the market report every week. Now, we're putting it together," said Robert Fisher, president of the Oklahoma National Stockyards Company, where thousands cattle are auctioned every Monday.

The Stockyards company developed some methodology that allowed for the quick input of prices onto its website at http://www.onsy.com/

The Oklahoma City cattle auction has been operating since 1910 and is often the key for setting prices of U.S. calves bound for pastures and for steers and heifers destined for the nation's feedlots. Its prices also provide direction for feeder cattle futures at the Chicago Mercantile Exchange as well as other big cattle auctions such as those held in Amarillo, Texas, and Clovis, New Mexico.

"The Oklahoma City feeder cattle sale is the largest-volume feeder cattle sale in the country and it's early in the week, so it's a big influencer for what feeder cattle sell for later in the week," said Ron Plain, extension agricultural economist at the University of Missouri.

"All of us who track the cattle markets are missing USDA price reports," Plain said.


Fisher, whose employees posted auction prices on the stockyard's website early on Tuesday, said feeder cattle in Oklahoma fetched slightly lower values than a week ago but remain near record highs.

Because the U.S. cattle herd is the smallest in more than 60 years, prices for all ages and weights of cattle have been record high, with many of price records set at Oklahoma City this past year.

Some feedlot owners are now balking at the record prices, delaying purchases this week hoping for some pull back, Fisher said. Some ranchers were busy planting wheat in recent weeks and put off purchases of calves that will eventually graze in the wheat pasture.

This week nearly 9,000 head were auctioned, a typical volume for this time of year, Fisher added. Of those, 966 yearling steers weighing 651 to 700 lbs sold for an average price of $1.63 per lb, down from last week's record of $1.74, the stockyard said.

Feedlots typically buy cattle up to about 850 lbs and then fatten them with corn until they weigh more than 1,200 lbs.

Cattle prices have been strong for months because of the smaller herd and that has been reflected in two consecutive months of record retail beef prices.

On the CME, feeder cattle futures soared to a record of $1.68 per lb last week, lifted by declining feed prices that improved profit prospects feedlots that fatten the yearling cattle for slaughter. CME cattle futures on Tuesday closed about 1 percent lower at $1.65, the lowest price in about a month, pressured in part by lower cash trade in Oklahoma, traders said.

"My personal opinion is that the top is in," Fisher said, indicating that prices may have hit a peak in the near-term.

Whether prices have peaked or not, Fisher said he and his team will continue to report the weekly auction prices from the Oklahoma Stockyards until the government is back up and running.

"We'll be glad to see them when they come back but, if they don't, we're fine," Fisher said.

(Reporting by Michael Hirtzer in Chicago; Editing by Bob Burgdorfer)