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Even today’s market offers opportunity

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Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer and BEEF magazine.
Waiting on someone else to solve problems won’t produce results. Seek out opportunities to profit.

If you want something done right, you have to do it yourself. We have all heard and said that line at some point in our lives. In today’s world I think it may be appropriate to drop the word right from it and just say “if you want something done, do it yourself.”

When we are infants, we figure out if we are hungry or need changed we cry, and fuss. This becomes a paradigm. As a child we throw a fit and we are just being a brat. Sometimes throwing that fit still gets us what we want. In my opinion too many adults are still trying to throw fits to get what they want. It seems to me there are more and more people throwing fits. Maybe I think that just because we have social media today. Here’s the rub, people get all worked up, post their opinion of how things should be done, but then what? What do they do about it?

We want people to do the jobs we don’t want to do. That’s how we ended up with the packing industry. We didn’t want to butcher our own cattle. We now have somebody doing what we don’t want to do, which is what we wanted, and now we complain about it, and we complain to Congress to fix it. We now want someone, other than ourselves, to “make the cattle market great again.”

Look I get it, I have been a part of the collusion myself. We must look at what we already know. An act of Congress can take a long time, especially for us. We are a tiny part of the population, and therefore we don’t get much attention, and when we do the timing is wrong.

When they finally passed a farm bill, a year and a half after they were supposed to, some ranchers got drought relief two to three years after the drought. It just happened to come at record high cattle prices, and those ranchers found themselves in a new world of hurt come tax time. Something got done but it wasn’t right. Do we really want this body trying to fix our problems, that is if we even have a problem, with their record?

Be the change you want to see

This week I got two phone calls from people who went through my marketing schools. Both had expanded their cattle numbers. In my schools I tell a story about two gyms in town. The town has 12,000 people, so it’s not a large town. You can get anywhere in a matter of minutes. Both these gyms are trying to serve the same population, and they have the same equipment. Yet one gym is signing up new members daily, and the other one just recently sold to a new owner. The difference is how management at the two gyms went about doing things. The new owners of the second gym are trying to do things differently than the previous owner, so it’ll be interesting to see how that works out

Most of the external environment around these people who are expanding is the same for their neighbors. What is different is these people invested time and money to come to my marketing school, a grazing workshop, and/or Ranching for Profit school. While on the surface I am sure their operation looks like every other one in their area, it’s the inner workings, the philosophy behind it, that has them doing things in a certain way that is helping them succeed.

These people want to have a successful business and they knew that they had to be the change they wanted to see. They are not acting like kids, they are setting an example for their kids

View from the market

This week in the feeder markets the Value of Gain steadily declined as the cattle get bigger. The biggest drop in VOG is making six weights into seven weights. An interesting thing I noticed is that north of I-70 the VOG on seven to eight weight heifers spiked. It is certainly paying to put weight on cattle under 600-pounds.

The heavy feeder steers became slightly over-valued to fats this week. The heavier feeder heifers remain a profitable buy back against fats.

This week feeder bulls we 10-30 back and unweaned cattle were 10-17 back

I got to watch some female sales in western Nebraska this week. Summer calving cows were selling slightly over the scale. Keep in mind the further west you go the drier it gets. At the sale further west pairs sold below their intrinsic value. The sale further to the East sold pairs at or above their IV. The younger the cow the more likely she was to sell above IV.

A 4-year-old and younger pair sold well above their IV. They have a calving window desirable to most people. Remember that summer breds sold just over the scale. If someone sold their young pairs, and replaced with the summer calving females, of the same age, there was almost enough cash in this swap to pay the expenses of running a cow for the entire year. And that is with the assumption they are paying cash to someone for everything the cow consumes and their salary too. Guys, that’s the cattle market saying “I’ve always been great.” and dropping the mic.

The opinions of Doug Ferguson are not necessarily those of beefmagazine.com or Farm Progress.

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