Call the Market
The Competition Is Getting Thick
If you've lived long enough to have a yearning for the cattle business, there's a strong probability that you've been in a situation where you've been backed into a corner with no easy way out.
Maybe it was a contract you knew you weren't going to be able to honor or maybe it was an operating note whose interest and deadline snuck up on you.
If you're able to look back on that situation, you're also able to say that you made it through, despite the odds.
If you fancy yourself with this line of business, you know that life isn't fair. There's no doubt that we are all dealt a different deck of cards, understanding that is the easy part. Knowing how and when to play them is the hard part, especially in years like this.
Over the last two weeks, I've heard from several producers and, truthfully, their spirit seems broken. This last week I took the time through my Cattle Market News Video (available on the DTN/PF Facebook Page here: https://www.facebook.com/…) to remind cattlemen that their assets always are and always will be assets.
Some of the greatest advice I ever received was from a feeder I spoke with after the packing plant fire in Holcomb, Kansas. He said, "Cattlemen have a rotten tendency that, when times get tough, they stop looking at their cattle like assets and start looking at them like liabilities."
What a profound statement; he's completely right.
If there's been one thing COVID-19 has taught us, it's that we can change, we can pivot, and we can persevere. I'd be a blatant liar if I told you I didn't have a down day over the last nine months trying to absorb all the changing facets this year has thrown at us; but it's through these challenging times our will is tested. We can stand up or we can lay down, but the middle ground is growing more and more sparse.
Marketing cattle isn't as easy as it once was and showing your accountant a green summary come tax season isn't as likely as it once was, but just because it isn't as easy doesn't mean it's not doable.
Relying on marketing strategies that have worked in years past may not be enough to sustain in today's dynamic market. Like we discussed before, you still have your cattle, which means you still have your asset -- you just have to give that asset the right arena to perform for you.
For example, let's talk about the current feeder cattle market and its development. Over the last two months, the market performed far better than most of us assumed it would. And even though the market's not quite ready to absorb the fall run, we are slowly seeing more bawling calves trot across the scales at sale barns. If you've had the time to watch some of the sales, or at least look at after-sale reports, you'll notice a stark difference. Yearlings are becoming hard to come by and are selling with stellar demand. Even though in years past it has worked and so many producers still market this way, bawling calves are being sold at a sharp discount as feeders aren't interested in absorbing their risk. Bawling calves are more likely to lose weight before they start gaining and they run a greater risk of getting sick.
There's nothing "wrong" with selling bawling calves, but if you're not liking the price you're receiving it would be a phenomenal time to sit down and potentially rethink your marketing strategy for next year.
As our world, our country and our markets try to find some new sense of normal, it's easy to get frustrated and to get down on life. But let me assure you we are truly blessed and I don't think there's any better way to live.
I recently stumbled upon a video produced by the Angus Association on Patrick Goggins, which showcased his life and the empire he made. The video quoted him saying, "Don't be afraid of competition. If there is no competition, then you are not in a good business." The challenges we are facing could be looked at like competition. I believe in you, I believe in your ability to triumph through these challenging times and I believe you'll beat out the competition.
Watch the video of Patrick Goggins here, you won't regret it: https://youtu.be/…
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
(c) Copyright 2020 DTN, LLC. All rights reserved.