Just as the winds are starting to pick up outside with the latest round of blowing cold and snow about to strike again I have been trying to put the pieces together of a very complicated picture trying to shed some light on the question on many producers minds… “what is going to happen to these cattle markets?”
To be clear, I am a big proponent of the ideology that, “you get what you pay for” so keep in mind that my perspective is free… with that being said, I would like to offer my insight shaped by not only the same farm magazines that are sitting, both your desk and mine, but also recent personal conversations that we at Wright Livestock have had with literally scores of producers across a dozen states. Think of it as kind of a “boots on the ground information report.”
Flooding- While final numbers have yet to be released in regard to estimates in regard to livestock losses we will likely see numbers that are far worse than anything seen since my grandfather was a boy. Also, in case you missed it, on a global scale, recent massive flooding in Australia took claim to upwards 500,000 head of cattle.
Record Cold- A wide swath of the northern plains saw temperatures right at or below zero degrees for 50+ days all right in the heart of calving season. The losses that stem from this environmental factor will go beyond simply losing calves at birth, to far worse than normal sickness in calves and cows, and we have yet to see the full affects taken on the body condition of cows insomuch as the ability to milk and breed back.
Drought- The drought that plagued Kansas and Missouri has caused a significant selloff of breeding stock. Conditions were then further complicated when last summers feed stockpiles started killing cows and aborting calves in significant numbers because it was high in nitrates.
Financing- Of course, it is completely normal to have a young fellow fresh out of school who has nothing more than a pickup and a dream of owning cows to struggle to put together enough money to buy his first herd. What is not as normal is to be working with longtime producers struggle with new lending standards being imposed on them that does not allow them to operate in the casual way, they are accustomed. The days of buying a piece of equipment or a set of cows then calling the banker on the way home are over for many producers.
Honestly I have a list of other factors such as the number of dairy farms shutting down and converting to beef production, the potential impact of the Federal Livestock Indemnity Program, even the reality that we are doling out record amounts in food stamps has honestly had an impact on demand for protein… think about it, if your going to eat on someone else’s dime are you going to buy rice and beans or steak? Oh yes, and did I mention that the world population has doubled in the last fifty years?
While there are plenty of reasons for demand to go up but with slim margins, lack of capital and rising interest the reality is that the bred cattle markets will likely see a continued volatility that has taken place through the last season.
When the time comes and you are looking to buy or sell cattle, and you want to look at all your options we would be happy to have a conversation with you. We specialize in marketing sets of bred cattle having privately sold ~3,000 head in 2019, we also work with feeder calves and yearlings. Our goal is to market your cattle across the country not simply across the county and make sure everyone knows they are getting a fair value.
Thank you kindly,
Glade Miller Smith
I’m a husband to one wife, father to five children in this world and three in the next, multi-generational cattle producer, owner of Family Farm Beef Box, and bred cattle marketing specialist with Wright Livestock. I love a good joke and I’m slowly learning to eat fruits and vegetables.