Sort & Cull

Finding Opportunities in the Fourth Quarter

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
When bred cow prices are low, producers need to sharpen their pencils and see if they can step into the marketplace to buy more females. (DTN photo by ShayLe Stewart)

Do you remember back in 2014 when feeder cattle prices were ginormous? That sounds kind of like a heartless question to ask, given the market prices of the last couple of years; but, while the market throws various curveballs, we cattlemen must look for opportunity like a dire hunting excursion.

The wounds are still fresh enough that I don't have to remind producers that their feeder cattle prices this past year were far from ideal. But within the last three weeks, the bred cow market has turned ripe for a buying heyday. Examining feed costs are a burden at this point, but it's important to know your true ranching expenses before stepping into the bred cow market.

Last week, nationwide, bred cows sold anywhere from $750 to $1,200. It was just a month ago that video auctions were still selling bred females for $1,400 to $1,600, but with a plethora of calves and cows hitting the marketplace, the market has too many unknowns about the future and needs something substantial to cling to now.

One of my favorite market sayings is, "You make your money the day you buy, not the day you sell." And while that sentiment is partly true, when looking at the industry's current bred cow market, it couldn't be any truer! In 2014, when calf prices were lofty and fancy bred heifers were selling for as much as $3,000, everyone wanted to get into the cattle business. But by the time you add yearly running expenses (feed, vet bills and labor), it takes a long time for a $3,000 cow to become profitable in the herd. One cannot under-analyze the value of quality when buying females, but in these trying times when opportunity presents itself, producers need to try to be in a financial state to capitalize on the prospect.

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ShayLe Stewart can be reached at shayLe.stewart@dtn.com

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