September 22, 2023
Harvest is up to full song, and fall run is upon us. This means the players in the agriculture game are a little short on sleep. This is when we need to take a brief pause and double check what we are doing. I get that we are in a bit of a rush, but those few seconds that we pause and double check something could possibly save us thousands of dollars if it prevents a slip up. Or it may prevent someone from getting hurt. That is an outstanding return on those few seconds.
Corn stalk grazing
One amazing thing about harvest in my area is the almost magical power that the availability of corn stalk grazing has on the female market. Just a few short weeks ago no one had any interest in spring calving cows. Now that there are corn stalks to graze the spring calvers are only a few hundred dollars per head back of similar age and type fall calving cows.
The looks of female cattle
The depreciation on both the fall and spring calving cows is following the classic slide of $100 per year of age. Body condition is the largest factor affecting female prices right now. We all say we want a female in her working clothes, but when we go to town to bid on them, we always favor the fleshy ones. Fat truly is the prettiest color on a cow.
Bred heifers in the third trimester are bringing more than what people have wrapped up in them. Bred heifers in the first trimester will barely get a person their money back if sold right now.
Pairs are the ones getting the short end of the stick. The second and third calf pairs are bringing a bit over fall bred price. Then the price of pairs ratchets down on females that are 5 years-old and up, and they are equal to or even cheaper priced than the fall breds. That’s a neat deal! For equal dollars we can skip calving and take a pair home, or possibly get paid to take the pair home! The calving is done, foregoing any problems there, and there is also the time value to be picked up on that swap.
The other thing to pay attention to is how undervalued cows are to feeders. Depending on age and condition the product is worth more to slightly less than the factory is worth.
The feeder markets are just as much fun. The Value of Gain (VOG) greatly surpasses the Cost of Gain (COG)up until the cattle weigh around 800 pounds. When the VOG is below the COG we are subsidizing the buyer. As much as buyers appreciate this, the heavy weight feeders are over-valued to fats. As I was sitting at some sales this week and we all saw a group of these heavy weight feeders sell I could overhear the whispers “How does that work?”.
An interesting thing I noticed this week related to the VOG is when I compared steers to heifers. While there is the normal fluctuations between weights, at every one hundred pounds, the VOG was the same between the sexes when comparing 9-10 weight to 3-4 weights.
Geographical spreads are a huge factor right now. Not everyone can handle these high-risk long-haul cattle. For the ones that can there is a huge value capture.
Easy to make money
There were some leap-frog situations popping up in the south this week. It just doesn’t get any easier to make money than that.
This week feeder bulls were up to 35 back and unweaned calves were up to 20 back.
This is one of the shortest posts I’ve written in some time, and it is bursting with opportunities. The cattle market has been generous all year, and it is being extra generous right now. This is why I love fall run.
The opinions of Doug Ferguson are not necessarily those of Farm Progress or beefmagazine.com.
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