As the sun sets on the cattle market roller coaster of 2016, I find myself thinking about the wit and wisdom of Charles Goodnight, the great pioneer rancher of the Texas range who lived and defined so much of the post-Civil War epic that became the American beef industry.
Some may plead ignorance of this extraordinary man, but if you've even read the book or watched the movie called "Lonesome Dove," the wild and wooly story of Goodnight is not unfamiliar. In many ways, the fictional life of Captain Woodrow F. Call, the tough and tight-lipped hero who sets his mind to driving Texas cattle to the wide-open country of Montana, is based on Goodnight's real-life saga.
Needless to say, Goodnight's amazing 93-year career in the cattle business (do yourself a favor and read "Charles Goodnight: Cowman and Plainsman" by J. Evetts Haley) was considerably less romantic than how Larry McMurtry imagined Woodrow. After all, there's no second takes or rewrites when it comes to the raw harshness of droughts, stampedes, rustlers, Indian attacks, bank failures, bovine tuberculosis, market gluts, blizzards, outlaws, bankruptcies, and anthrax.
By all accounts, Goodnight was not shy about his own abilities. Yet near the end of his much-storied life, here's how he characterized his tumultuous ride through the cattle business:
"If all the good luck and all the bad luck I've had were put together, I reckon it'd make the biggest damned pile of luck in the world."
As the extremely volatile cattle market of 2016 spins into the history books, I can't help wonder how Old Man Goodnight might have assessed the chaotic mess. Would he have finally sworn off the cattle addiction, or simply pushed back his Stetson, spat in the dirt, and called it just another day at the office?
This week recorded a $10 surge in the dressed value of fed steers and heifers. Of course, great news for beef producers lucky enough to buy the winning lottery ticket right after Christmas. But what about those "losers" who were somehow forced to pull the marketing trigger before Thanksgiving, taking $230 less per head in the process (i.e., nearly $7,000 less per loaded pot).
Can we assume that feedlot managers banking as much as $190 moments before the ball starts to drop in Times Square are simply superior marketers than last month's Sad Sacks? Is it reasonable to think that the price implications of beef's supply/demand table have shifted so dramatically over little more than a month's time?
Concerning the latter, the word "possibly" needs to be at least mumbled if I want to keep my job at DTN. To be sure, I'd feel duty-bound to have a go at defending the market's rational honor.
Putting my best (if hesitant) foot forward in that regard, I would probably focus on better retail featuring in the late fourth quarter and improving demand in general.
All you can do is work on the puzzle every day and keep making the best guesses possible. Market analysts don't like to admit it, but their ability to file accident reports from the crash site far exceeds any and all predictive talents.
Here's wishing you the best of cattle feeding luck in 2017. Judging by the whirlwind market now slipping out the backdoor, you're gonna need it.
John A. Harrington
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