Sort & Cull
What Will You Do With Added Income From Stronger Feeder Cattle Sales in Upcoming Years?
This past weekend, my husband, son and I went to help my parents precondition their calves before they ship them next month. Their summer ground runs along the foothills of the Beartooth Mountains in south-central Montana, and when I picture what Heaven may possibly look like, I'm convinced that's it. From the luscious hay meadows in the bottoms that are lined with flowing creeks, to the soft, rolling, golden hills that are backed with snowcapped mountains, cattle excel in that country, and it makes for a cowman's paradise.
There's something nostalgic about this time of year for all cattlemen as they prepare the final working days for one year's calf crop, only to turn around and begin the cycle all over again for next year's calves. And when looking to what next year's market may possess, cattlemen are elated that the market's changing tide is finally going to favor their position. With the second-fewest beef cows in the country in the last 50 years, there's no denying that feeder cattle prices are going to be higher. The real question is: How high is the high going to be?
But as a livestock market analyst and as a producer who's soberly aware that the cattle market is cyclical, we would be doing ourselves a disservice if we weren't starting to think about what the backside of this high may bring. And when I look at the sheep market this year compared to last, I pray to God that our fate isn't the same.
So, I ask you: What are you going to do with the added income you receive over the next two, to potentially three years?
Every ranch is different and managing cash flow and overhead expenses is no easy feat. But when looking ahead at how we'll try to manage the next downturn in the market, I know that servicing debt in a depressed market is like trying to swim upstream. So, personally, that's where our focus will be. I'd love to hear what strategies you all intend to utilize over the next two to three years to better situate your operation so you can withstand the next market downturn. Because, as we vividly remember, the span between 2014 and now has been no easy trail, and the market has lost too many good producers because of its hardships. So, I beg you to dig into your finances and uncover as many blind spots as possible, so the hardship of the market doesn't surprise you with them.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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