Oklahoma feeder cattle prices averaged nearly 4 percent above one year ago in the first week of August, with calf prices increasing from the previous week. Feeder prices are holding strong despite continued growth in feeder cattle supplies. Combined Oklahoma feeder auction totals have averaged 13 percent higher year over year since early July.

As expected, drought conditions continued to expand last week after rains two weeks ago resulted in a brief halt to worsening drought in Oklahoma. The latest Drought Monitor indicates that 34.8 percent of Oklahoma is in D3 (extreme) and D4 (exceptional) drought, including 10.7 million acres of D4 conditions in western Oklahoma and the panhandle.

The latest Drought Monitor shows rapid expansion of the exceptional drought (D4) area to include about 38 million acres with another 126 million acres of D3 (extreme drought) conditions. Parts of the drought region received some rain in the past 10 days – enough to slow expansion of drought conditions, but not enough to reduce drought without additional moisture.

The April 1 inventory of feedlots with over 1,000-head capacity was 11.729 million head, up 7.4 percent from last year. This report was very close to pre-report estimates and contained no surprises. Feedlot marketings in March were 96.1 percent of last year, just about even with last year considering that there was one less March business day in 2018 compared to one year ago. March placements were 90.7 percent of last year. While close to expectations, this placement number is significant because it breaks a string of 12 consecutive months of year-over-year placement increases.

The latest Drought Monitor shows that drought continues to worsen in the southern High Plains. Across the continental U.S., 0.55 percent of the country is in D4 (exceptional) drought. The majority of that area is in Oklahoma, where D4 makes up 14.79 percent of the state, focused in the northwest and panhandle areas.

So far in 2018, beef production is higher year over year as expected, with increased cattle slaughter and carcass weights. Beef demand has continued strong, carrying forward momentum from 2017. Cattle prices, both feeder and fed, along with wholesale and retail beef prices have generally been higher year over year so far this year.

Recent rains eliminated or greatly reduced drought in the eastern half of Oklahoma, but conditions in the western half of the state continue to worsen. Nine counties of northwestern Oklahoma and the panhandle have gone 155 days or more with less than 0.25 inches of rain.

The current hay-marketing year began with May 1, 2017, hay stocks down 3 percent from a strong 2016 level. Hay production in 2017 struggled with a number of challenges ranging from drought to wildfires to floods.

The Jan. 1, 2018, inventory of cattle in feedlots was 11.49 million head, 108.3 percent of year-earlier levels. This is an increase of 884,000 head compared with Jan. 1, 2017, and is the largest January on-feed total since 2012. For the 12 months of 2017, feedlot placements totaled 23.5 million head, up 1.91 million head (an 8.8 percent increase) from 2016. Total 2017 marketings increased 1.03 million head year over year, up 4.9 percent.