Cattle and beef prices, he said, will push higher because of limited supplies next year. “Beef production is down by 4.5 percent. Beef demand will limit price increases, however.”

Other factors that could affect the cattle markets are how much higher beef prices will move before hitting a barrier and whether and how much feed prices will moderate. Higher cow and heifer prices also will influence the cattle market and breeding cow and heifer demand.

Cow-calf operators have opportunities for good profit but must manage costs. “Stockers offer good value with gain but packers and feedlots will continue to struggle and loss of capacity is likely. Production challenges will be bigger than marketing challenges.”

Peel said the industry will be a long time in transition. “We expect a long period of limited cattle supply.”

Land values, said Damona Doye, Sarkeys Distinguished Professor and Extension economist and regents professor, are variable across the country but have held up in Oklahoma. Nationally, cropland value is up 14.5 percent with pastureland up 4.5 percent. In Oklahoma, cropland is up 16.8 percent with pastureland up 10.6 percent.

Values in Oklahoma are higher where there are mineral rights. “North Central Oklahoma has the highest land values in the state,” she said.

Nationally, the corn states show the highest value for cropland. Improved pastureland to the east also is valued higher than native pastures in the west. Pastureland in Oklahoma is valued at $1,150 per acre, same as the national average.

“The highest land rental values are also found in states with the highest cropland values, the Midwest.”

In Oklahoma, dryland cash rent rates were up 10 percent in 2012, compared to 2011. A breakdown by crop shows wheat land at $32.81 per acre cash rent. Alfalfa is $41.40 and grain sorghum is $29.03 per acre.

Doye said pastureland for rent was limited last year because of drought. “If folks had pastureland to rent, however, they could command high rental rates.”

In spite of farmland values holding up investing in rural land is not always a good option. “The investment does not always provide a good return,” she said. “We have seen times when farmland outperformed the stock market, but timing is the key.”

She said renters and landowners need to communicate accurately. “That’s why we need to see more written lease agreements.”