(upbeat guitar music) - Hello everyone and welcome to SUNUP.

I'm Lyndall Stout.

As the year winds down, we're having in-depth conversation with our O-S-U extension marketing and policy experts.

We're looking back at 2022, and taking a look ahead at 2023.

First up, here's SUNUP's Kurtis Hair and Dr. Derrell Peel.

- Continuing our year-end wrap up show, we're focusing on the cattle markets right now, with our livestock specialist, Dr. Derrell Peel.

So Derrell, we started the year dry, and it looks like we're gonna be ending the year very dry.

- You know, the drought has been the main story in 2022, and it continues as we go into 2023.

We're not sure where we go from here, but, you know, certainly from the standpoint of what's happened in cattle markets in 2022, the drought has forced us to continue liquidating cattle.

Cow slaughter was up over 12% for the year.

Heifer slaughter was up nearly 5%.

And so that's, you know, that temporarily boosted beef production to yet another record level in 2022.

You know, cattle numbers actually peaked in 2018 to 2019, and yet we're still seeing record beef production, and that's because we've extended, kind of, the turning point here because of the drought.

So, you know, we've had lots of issues in that respect.

We've kind of postponed what's gonna happen here, but when we do get to that point, it's gonna be more dramatic - Before we get to what's gonna happen eventually with this, how is, you know, cattle liquidation, what was that situation like throughout the year, given the drought in both the, you know, the late winter, early spring, and then in the summer?

- You know, we had significant cattle liquidation all year.

It was surprisingly strong all year, and that came out of 2021 with, you know, with an increase in cow liquidation.

So, you know, one of the stories here that sets up, you know, where we go from here, is the fact that we've had two-plus years of herd liquidation.

There's sort of a cumulative effect there in terms of the animal numbers.

There's also a cumulative effect in terms of the feed situation, and the pasture and hay situation.

And so, you know, we've had a lot of struggles.

Producers have had a lot of struggles, and that's why they've had to continue liquidating cows all the way through 2022.

- So, you know, looking ahead to 2023, focusing on the drought for 2022, and the impact, you know, a lot of producers aren't probably gonna be able to graze wheat pasture.

So what are those impacts for those producers, for stocker cattle producers mainly, what are those impacts gonna be?

- Well, you know, as we start 2023, you know, we had a tough start with our wheat situation for winter pasture in 2022.

We've finally got some wheat up.

We've gotten little dabs of moisture.

We may, eventually, get a little bit of grazing, either for stockers or for cows, but, really, not a lot.

And I think, you know, a lot of people are just trying to figure out, or most of 'em have figured out, what they had to do to get through the winter.

And I think, you know, really as we look forward, the real question is gonna be, "What does the spring bring"?

Do we see any change in these drought conditions in the linea weather pattern that gives us any hope for a better growing season next year?

You know, some producers may still be making adjustments to get to where they need to be to get through the winter, but I think most of 'em are trying to look ahead to, you know, what, maybe, we can hope for next year.

- So, really high beef production in 2022, what are the impacts gonna be with that?

You know, that extremely strong beef production going in 2023.

You said two years, it's not sustainable.

So what does that mean?

- We're gonna see a fairly dramatic turnaround in this market at some point, and because we sort of extended it, kind of artificially, because of the drought impacts, I think the turnaround is gonna be fairly dramatic when it happens.

So we're gonna see beef production drop pretty significantly, even if we don't see a lot of improvement in the drought conditions, just because we have less cattle now.

So we may continue liquidating, but there just won't be as many cattle to liquidate.

And so we'll start to moderate those cattle supplies even more.

If we do see improvement in the drought conditions, then we're gonna try to start rebuilding, and that's gonna have a dramatic impact on beef production, because we're gonna save a lot of heifers, we're gonna stop culling cows, and we'll see a fairly dramatic decrease in beef production, in cattle slaughter, and beef production.

And that's gonna set up, you know, sharply higher prices across the board.

Cattle numbers are gonna be tight, and so we're gonna continue to see very strong feeder from fed cattle prices through 2023 and beyond.

- And for prices on the consumer level, how is that gonna shape up?

- You know, 2022 we had relatively good beef demand, even with record production.

We go into 2023, and we see a sharp drop in beef production.

Less supplies implies that we'll see prices go even higher.

Consumers clearly have a lot of challenges with inflation, and yeah, and lots of issues affecting them, but there won't be as much beef, so we'll see higher prices just to ration that smaller supply of beef.

- Alrighty, thanks Derrell.

- Dr. Derrell Peel, Livestock Marketing Specialist, here at Oklahoma State University.

(lighthearted music) - Today, I thought I'd share a little bit of info about Champagne and the holidays.

Champagne is a type of sparkling wine that comes from the Champagne region of Northeastern France, and is produced according to a strict series of rules.

Sparkling wine was originally enjoyed during the 1500's by aristocrats all over Europe however, winemaker Dom Perignon, developed a series of quality innovations towards the end of the 1600's that would help establish the Champagne region of France, as a major producer of Champagne, sparkling wine.

First, he established the use of corks, rather than wood to seal wine bottles.

This helped to improve the quality and maintain the sparkling fizz of the wine.

Additionally, he used a netting of rope to help keep the corks secure to the bottle to prevent it from popping prematurely, due to the pressure that builds up inside sparkling wine.

Finally, he pioneered the use of thicker glass in sparkling wine bottles, which helped prevent them from exploding.

These improvements helped to increase the popularity of Champagne, so much so that by the beginning of the next century, King Louis the 15th, began making laws governing what could be called Champagne, and how it could be sold.

In 1790, France celebrated the end of the French Revolution, and wines from the Champagne region were the only ones used at official festivities.

It was not long after, that Champagne became associated with celebratory events.

Between the mid to late 19th century, the lure of Champagne began to spread from the elite down to the middle, and working classes.

Production methods had reduced the cost of Champagne, and while it still wasn't cheap, it was affordable enough to celebrate special occasions such as Christmas and New Year's Eve.

(lighthearted music) So just a little bit of info about Champagne.

For more information please visit sunup.okstate.edu, or food.okstate.edu.

Happy holidays.

(lighthearted music) - We're continuing our year end discussion now with our Ag Policy Specialist, Dr. Amy Hagerman.

Amy, let's take a look back at the year 2022 now, and from your perspective, it was quite a year.

- It was quite a year and it really comes down to one thing, and that's weather.

We started the year very cold.

We had wildfires in the spring.

We've had a challenging tornado season even coming into the fall.

But really drought, drought really was a huge challenge for our producers here in the state.

And so we had a lot of funding come into the state from ag policies related to addressing these disaster events for our producers and the different kinds of federal programs that can be used to help provide that safety net.

Also crop insurance, obviously this was a good year to have solid crop insurance coverage on your operation to help address preventive planning or poor yields, or even entire fields that had to be turned to other purposes because of drought specifically.

So just looking back on this year we're finishing out this Farm Bill and we really put all of these programs through their paces.

Then we also had these ad-hoc programs that have come through and what that has meant both in terms of federal programs, and then our state drought ad-hoc program as well.

And it could get very confusing with all the different acronyms floating around that people were challenged with in the last year.

- We're looking back at the year that was, and looking ahead to the next year, we do always wanna mention that it's important to check with your extension office and your local FSA office first.

- Absolutely, yeah, that's a great place to start for information on any of these federal programs or changes.

Changes do occur even between Farm Bills on Farm Bill programs.

Conservation reserve program is a great example of that, and the changes that happened in rental rates just in this year on CRP land.

These new climate smart agriculture initiatives and the amount of money that's going to be available for programs like Environmental Quality Incentives Program or Conservation Stewardship Program.

So if you wanna know what the requirements are, what the priorities are, what the documentation is, you can always start with your county extension office, start with your FSA office for those kinds of programs, NRCS for conservation programs, or your local conservation district office or talk to your crop insurance agent about the risk management programs.

- And wintertime is sometimes a good time to do that and get organized for the year ahead.

We can't talk about the end of the year without addressing the political season, in the midterm elections and kind of the impact that that will have on shaping the Farm Bill in the year ahead.

- Absolutely, we've got a couple of different influences happening here.

The midterm election is definitely one of them.

And what is it going to mean with the change in the majority in the house, in terms of having a Democratic Senate leading that part of the Farm Bill discussion.

- And then a Republican-lead house, leading that part of the discussion.

And how do we reconcile the priorities for different kinds of programs in the upcoming 2023 Farm Bill?

Will it be a 2023 Farm Bill?

I think that's a question in itself, at this point, but we've got just different priorities happening out there, and everything we just discussed about years past creates the context in which we talk about discussions in 2023 for this Farm Bill.

So, we are going to be talking about, conservation is going to be an important title in this Farm Bill, be a lot of discussion around conservation and climate, climate-smart agriculture.

How do some of the initiatives that have already been put into place, some of the research that's already going on, how do we help producers address the challenges of extreme weather that we have seen, going forward, through conservation and commodities title?

Also, we're thinking about input prices, and the challenges that producers have faced financially in the last year.

The financial risks.

How can the farm safety net better address some of those challenges?

And we'll see some conversation in that space.

And nutrition spending.

Inflation has hit all of us at the grocery store, and it's also hit those who have participated in these nutrition programs.

This has led to a large increase in nutrition spending, anticipated nutrition spending.

We're likely going to have a Farm Bill that's over a trillion dollars, the first time ever.

And what is that going to mean, as we go into these negotiations, for spending in different programs in the Farm Bill?

- Farm Bill, obviously a big thing coming up in 2023.

What else are you going to keep an eye on?

- So, we're also just watching these initiatives that are coming through USDA and what is that going to mean, as we continue with the drought recovery, here in Oklahoma.

We're going to be watching crop plantings, we're watching the markets.

Others will be talking about market projections, and what will that mean for additional emergency money coming out of USDA, or programs out of USDA.

Also, some of the changes that they're making in the conservation programs, this is related to the Inflation Reduction Act increase in funding and conservation programs.

That first round of that is rolling out in 2023.

So, what kind of technical changes will happen there?

How can producers in Oklahoma take advantage of these programs, going forward?

- Well, we're sure glad we have you to help us sort it all out, of course.

Amy, thanks so much for your information today, and happy New Year to you and your family.

- Happy New Year.

- Thank you.

And we'll have more from our year-end review, coming up just a little bit later.

But first, here's Dr. Mark Johnson with 'Cow-Calf Corner.'

(western guitar music) - Good morning, Oklahoma, and welcome to 'Cow-Calf Corner.'

Well, it's the end of 2022, and as we reflect back on this year, it has been a year that, probably, a lot of us in the cattle business would like to forget, and just dismiss it.

And, as tempting as that would be, the reality is, there's a lot of lessons we could learn from 2022 that can make us a better manager, and prepare us to be better managers in the future in the cow-calf business.

And, we reflect back, and our first thoughts are drought, high input cost, more drought, excessive heat, nighttime lows through the summer, never getting below 80, 85 degrees for lengthy stretches of time.

And again, it is easy to want to forget it, but there are some things there that we can reflect back on, and learn from.

I will say, with 2022 just about in our rear-view mirror, if it didn't test your resilience and your resourcefulness, you probably didn't own any cattle in Oklahoma in the past 12 months.

That being said, let's think about some things we can take away from this year to help us in the future.

First thing that I reflect back on in the past year is that, the cattle business is based on having available forage that cattle can graze, and eventually turn into beef.

And, although every segment of the beef industry is not exclusively based on forage consumption, when you lack available forage to graze, it is really tough to balance your input equation with your level of production equation.

It is next to impossible to do that.

Second lesson that I think about from the past year is that you need to be preparing for droughts when you're in normal weather patterns, and getting a normal amount of rainfall.

And you need to prepare for normal weather patterns and normal rainfall, when you're actually in a drought.

- That's a challenge, but if we can manage to do that, it positions our operation to capitalize on the opportunities that present themselves in the form of low cattle inventories, which we're in right now and probably gonna continue to see for a while, which is what makes me very bullish on the future and the marketing potential for cattle for the foreseeable future as a result.

Third thing that I reflect on from the past year is that cattle are very adaptive creatures.

God blessed them with a ruminant digestive system.

It is interesting if we are willing to do the math, know what the nutritional requirements of our cows are, try to get creative and innovative in a lot of cases, there's a lot of different ways to actually maintain a cow herd and survive the situations that we've been going through.

Fourth thing that I reflect back on is that if you will follow proper culling criteria in times that you need to reduce your inventory, you end up with a much better cow herd emerging from that.

And that's a positive.

The fifth thing that a year like this reminds us is not just the cattle, we've also gotta take care of the soil and the plants.

And my final thought about the past year is that the tough times in the cattle business, if you learn from them, can make you a better manager in the future.

With that, it's been interesting since I started writing for Cow-Calf Corner and doing these Sunup segments.

I get a lot of questions from people, how do you decide what your weekly topic is gonna be?

I will tell you that the easiest part of 2022 was having a weekly topic because it seemed like we had a new heat and drought related crisis that we needed to provide information on every week.

I don't know that I've been able to provide any silver bullets, but hopefully the information that we've put out has been helpful.

And with that, I wish all cattlemen and women the best of luck in 2023 and a happy new year to all of us.

Thanks for being with us again on Cow-Calf Corner.

(upbeat music) - Dr. Kim Anderson, our crop marketing specialist is here now, Kim, let's take a look back at 2022 and some of the bigger developments that you observed during the year.

- Well, for 2022 to talk about it, you've gotta go back and look at 19 and 20 and 21 because we had COVID that really messed things up.

And as we came into 22, we're recovering from COVID.

Of course, Then we got into February and Russia invades Ukraine, and that just blew things all the pieces.

So we had, prices had went from $4 to $8 when we came into 22.

Russia invaded Ukraine, and then we got prices up to $13.

Other things that were going on in 22 is higher interest rates, inflation, relatively high cost and shortage of diesel as we got into the harvest.

Also then you throw on top of that the king of them all, weather, because we had a short wheat crop, about 60% of a crop.

We had a short corn crop.

We had a real short soybean crop and cotton crop was decimated.

Now, for the most part, especially for corn and wheat and soybeans, the price, our wheat production was down 40% but our price was up 35%.

On corn, we had a big increase in price that offset that corn loss.

And also in beans.

Now cotton, cotton took a big hit because we had a big loss of cotton production and the cotton price actually went down from 120 early in the year, down to into the seventies and came around to 80 as we got into the end of the year.

A lot happened in 2022.

- And there's no question the drought impacted so many things in the markets and all aspects of agriculture.

As we're getting near the end of the year, what are you keeping an eye on at this period in time?

- Well, if you look at the current situation and you've got to know what the current situation is as you look out into the future because you've got that base.

And what we've got right now is relatively high prices.

We got soybean prices up above $14.

We got wheat, they came back above $8.

You've got corn at $7.

We got really good prices right now.

We got dry conditions but we got some rain over the last couple weeks.

We're getting optimistic now about our wheat crop and maybe we can get some moisture in the ground to come in and plant our summer crops.

I think that what we've got is a setting or a foundation for a really good year in 2023.

- So as you kind of map out what we need to keep an eye on in 2023, what are some of the big takeaways?

Now's the time to reflect and then also look ahead.

- You've gotta go back to Russia and Ukraine.

- Right now Ukraine has, I think got the advantage, they've been gaining back territory, Russia, the word out of there is, is that as soon as they get a hard freeze, as soon as they get that ground frozen that they're going to attack again, they're going to go on the offensive, I think, and that war could get nasty, right?

You know, this last week they blew out some areas in Odessa, the main export facility.

So look out into 23, you gotta look at the war, you gotta look at the higher interest rates.

You gotta watch the weather, you know, El Nino and El Nino.

Which one of those we going to end up with?

But if we can get some rain, I think we're gonna have slightly lower prices in 23 and it could be a relatively good year.

- As we look toward January, some optimism in terms of input prices and supplies.

- I think things are looking up relative to cost.

Now, are cost gonna go back to where they were a couple years ago?

I don't think so.

If you look at diesel is a good example, we had a shortage of diesel the last few months but it looks like they've got that situation taken care of.

The herbicides, the pesticides, fertilizer prices have come down, they're not gonna go down to where they were but I think they are gonna come down to a manageable level and to think about it, any level they are, we're gonna have to manage them.

However, I gotta come back and point out, the market works.

If those prices stay up, if input prices stay up, I think our output prices are going to stay up so that it's gonna offer us some profit.

I'm optimistic about 2023.

- With all this in mind, what kind of guidance do you have for producers?

And I understand you're adjusting your strategy a little bit.

- Well, there's just a tremendous amount of risk and it's easy to get overwhelmed with the uncertainty in the market.

I think the strategy this year's got to be stay calm.

The strategy is, is if you don't have something to sell or be in the market, ignore the market and just let it happen without you watching it.

And when you're buying inputs, dollar cost average, when you're selling your product, dollar cost average, because you look back over the last year or so, we had, the biggest move in wheat prices was 96 cents up and the biggest down move was 91 cents.

You get big moves in all corn, soybeans, sorghum, wheat, cotton, just relax, dollar cost average.

The market and the production and our management expertise will take care of the situation.

- Okay, Kim, great conversation as always and we look forward to many more in the new year ahead.

(upbeat music) - Livestock is a very important industry in Oklahoma and with that comes just many miles of fence across the state to contain livestock onto individual properties and pastures.

But we also have thousands of miles of old, dilapidated fence that's no longer in use, that serves no purpose.

In this case, livestock aren't even present and this fence presents a lot of hazards to animals.

Wildlife, especially white-tailed deer often become entangled and old fence like this.

And it's a terrible way for them to perish, to get tangled up and to starve to death.

And this is a simple fix that property owners can address.

And wintertime is a great time when it's nice and cool, to come out and remove old, loose fence and fence that's laying on the ground that can become entanglement issues for wildlife.

In addition, dogs, hunting dogs often get injured running through this fence.

So it's definitely a hazard.

In addition to the fence that is no longer needed, that's completely dilapidated, that just needs to be removed.

There's also fence that is still used, that's in disrepair.

It's loose.

There's strands that are broke and this also presents an entanglement risk.

And there are simple things that we can do to tighten the fence up, to make it less likely that animals are gonna get entangled.

Also, replacing the top wire with smooth wire or raising the bottom wire up a little bit helps animals such as deer and pronghorn move through pastures more with greater ease.

So if you'd like some simple tips that you can do to make fencing more wildlife friendly, just visit the Sunup site and there's a fact sheet there that will give you some ideas.

(gentle music) - That'll do it for us this week and for this year, for that matter.

From all of us here at Sunup, we wish you and yours a very safe and happy new year.

Thanks for watching.

And remember, Oklahoma agriculture starts at Sunup.