October 6, 2023
The market gave me an over abundance to write about this week. I want to begin by addressing the decisions of some cow calf producers.
Every year presents some challenges that are beyond our control. From conception to weaning there is a lot to endure, and decisions that must be made. If we reduce it all down to the ridiculous, the cow-calf segment provides a service by getting live calves to weaning time and selling them into the market. Why in the world do some of you go to great lengths to screw it all up just days before selling the animals?
Listen up, cow-calf producers!
Calves that are 7 to 20 something days off the cow are not weaned. They are a mess.
It is as simple as knowing who your customer is. You may not know your customer’s name but as a buyer let me clue you in to what a buyer sees when short, weaned calves sell. This is a group that the seller gave up or didn’t commit to, so why should a buyer commit to them?
First there was the stress of weaning, and a diet change. Then there was the stress of shipping them to the sale barn, and the sorting that takes place there. After they are sold there is the stress of being comingled and shipped to their new home, where another diet change happens.
I stayed home this week and didn’t even bother to go to a local sale simply because there was only one small bunch that was right off the cow and the rest of the consignments were short weaned. When I am at a sale and they sell these short weaned calves I will set my cards down as nonverbal communication to the auctioneer sending the message “don’t even look over here.” You hire the sale barn to be your agent when selling, but put them in a near impossible position to do their job with these short weaned critters.
Hard weaning and short-weaning
While we appreciate the honesty, we will not reward you for it. And another note of caution, some people try to represent these short-weaned calves as weaned, with the implied hint that they were hard weaned. Don’t think for a second that buyers are that dumb. Short-weaned calves have a tell that seasoned buyers will pick up on.
If you will not or cannot commit (minimum of 45 days) to weaning them for some reason, strip and ship them. Both you and your customer will be better off.
Price relationships are what’s important
On Friday last week and the first part of this week I was involved in many conversations about the board going limit down. I do not know if the board really was limit down, I just take other people’s word for that. You see that is the beautiful thing about legit sell/buy marketing. If someone accidentally tripped a breaker in Chicago and the board failed to open someday, I would never know it. The only thing that matters to the legit sell/buy marketer is price relationships.
Not all weights, classes, or sexes of cattle go down in price at the same velocity. I know of one legit sell/buy marketer that sold five loads of feeders this week. The 8 weights he sold were down $6 this week compared to what they would’ve brought last week. The lighter animals that fit his buyback were down $16. This widening spread in the price relationships is making him five figures more on the net. Top quotes stroke the ego and that is all they do. Taking advantage of price spread like this, is how to run a business to support the family.
Value of gain
With the different weight classes falling in price at different rates it certainly changed the Value of Gain within the spectrum. By midweek some weights were trading higher, while at the same time some weights were remaining lower. This certainly did a number on the VOG. This condensed the VOG between two weights, but then sets up the next weight class to have an extremely high VOG. If you are one of those that watches the board and calculates break evens this was a frustrating week. For the legit sell/buy marketer it was a barrel of fun.
This week feeder bulls were up to 45 back. Unweaned and short weaned calves were up to 20 back. Geographical spreads were wider this week.
North America = Extra blessed
Last night, I shared on the Mr. Cattlemaster Facebook page that in 24 years of buying cattle I have never seen margins like I am seeing right now. Those of us that are in the North American cattle biz are extra blessed. Don’t try to time, second guess, or fight the market. Just simply and gratefully take what it is providing.
Female cattle values
Females that sold in my region got a little boost in price. One interesting thing I noticed is the only females that sold over their Intrinsic Value (IV) were under the age of 5 years-old except for first calf heifers. The fall calving heifers still managed to fetch a price that is higher than what the producer would have in them. With that being said, producers will have to closely examine relationships in their area. An open heifer is over-valued to a bred heifer where I live, but in other areas it does make sense to breed heifers if one can do it cheaply enough. Spring calving heifers still have no friends. We will probably have to wait until the Thanksgiving time sales to truly discover their value. All the pairs I seen sell had new calves at side and they were the same price as the close-up bred cows.
The opinions of Doug Ferguson are not necessarily those of beefmagazine.com or Farm Progress.
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