It's another beautiful day here in South Dakota. The sun is shining, the pastures are greening up and we took our first load of cow-calf pairs out to grass over the weekend. It's hard to believe we are halfway through the month of May, and for those of us still in the cattle business, things are finally looking up with a much improved cattle market.
Certainly, the past few years have been tough on beef producers. With a struggling U.S. economy crippling beef demand and crushing cattle prices, ranchers across the country have felt the pinch. However, things seem to be turning around now as the economy improves, grilling season boosts beef demand and the short supply of cattle all combine to create a perfect environment for soaring livestock prices. I had the opportunity to chat with Marion Rus, co-owner of the Mitchell Livestock Auction Market in my hometown, and he offered his insights from the auctioneer block on the state of the industry and what the future holds.
Rus' thoughts on the markets: Fat cattle were steady, matching the sales from last week. I don’t expect our fat cattle market to get much higher than it is now. With fats trading around $100/cwt., we are at the top of the market for summer. In the months of June through September, the market tends to drift downwards 5-10%. The market trends have been favorable to producers, resulting in an increase in numbers at the sale arena.
On supply and demand: Our cowherd is down considerably, as well as sale weights. There are less pounds on the market because producers are selling cattle for profit at an earlier age. I think beef demand is moving up. Exports are up a good percentage from last year, and imports on cow beef are down considerably, which is why cull cows are selling as well as they are right now. In addition, our total cattle numbers are less than they have been for many years.
On the restaurant industry: Consumers are going out to eat more often. I recently read that the restaurant trade is the best it's been since 2007, which is obviously helping beef demand.
His advice for producers marketing their cattle: It’s important to keep current with market trends. Don’t get your cattle overly fat or too big. Don’t fight the market trends. Market your animals in an orderly fashion. If all producers follow these steps, we can maintain a positive market down the road.
What are your thoughts on the current beef cattle markets? Are you sending trailer loads to the sale barn, or are you holding steady? How long will the positive market last? What is your marketing plan for the future? What are your predictions? Leave your thoughts in the comments section below. Thank you for your participation.