Call the Market

Today's column is dedicated to the cattlemen who have yet to sell their 2024 calf crop and are desperately wondering: What in the hell do we do?

On the one hand, you look at the market and almost can't fully comprehend just how strong the fundamentals are. The U.S. beef cow herd is at an all-time low, which has helped drive both feeder cattle and fed cattle prices to all-time highs in the 2024 calendar year. Beef prices are incredibly strong despite consumers battling inflation pressures and other economic stressors. But even so, some cattlemen are kicking themselves, as they fear they missed the feeder cattle market's peak early in July and now are scrambling to try to hurry and scrape together the best marketing strategy moving forward.

But before we dive into anything else, I want to first say you're never going to know the exact day a market is going to peak. You may be able to decipher if a top is nearing based on what the market's technical and fundamental elements present, but thinking you can pinpoint the exact day the market will reach its highest point for the year will drive you to madness.

Secondly, we as cattlemen are quite bad about feeling like we've "failed" or completely missed the mark when it comes to marketing if our calves aren't the ones that topped the market. Believe me, I get it. It's human nature to want more. But even with the market's decline since August, when in your life have you been able to sell feeder cattle at these prices?

On Tuesday afternoon, Aug. 24, 2024, the CME Feeder Cattle Index closed at $244.02. And when you look back and compare that price to years past -- it helps bring a sobering perspective.

On Sept. 25, 2023, the CME Feeder Cattle Index closed at $254.06 ($10.04 higher than Tuesday's index); on Sept. 26, 2022, the CME Feeder Cattle Index closed at $178.71 ($65.91 lower than Tuesday's index); on Sept. 24, 2021, the CME Feeder Cattle Index closed at $154.04 ($89.98 lower than Tuesday's index); and on Sept. 24, 2020, the CME Feeder Cattle Index closed at $142.59 ($101.43 lower than Tuesday's index). Even compared to the last cattle market's cycle peak, today's prices are higher than those seen in September of 2014 and 2015. On Sept. 26, 2014, the CME Feeder Cattle Index closed at $233.10 ($10.92 lower than Tuesday's index) and on Sept. 24, 2015, the CME Feeder Cattle Index closed at $194.22 ($49.80 lower than Tuesday's index).

So, while you may feel dissatisfied that you didn't jump at the market opportunity in July, don't dismiss the dollars available and on the table today. Out of the seven years compared in the numbers above, the CME Feeder Cattle Index was only higher one other time compared to what it's trading at today.

Ty Thompson, cattle sale manager at Billings Livestock Commission and auctioneer at Northern Livestock Video Auction said it best: "Markets are nothing more than an attitude." Given the uneasiness of our political landscape with the presidential election less than 50 days away, of course there's uneasiness laced through the cattle complex, the commodity markets, our economy and throughout our nation, as these two presidential candidates could not be more different from one another. And managing the marketing strategy on your calves may be one thing, but trying to outthink and articulate what the market will do ahead of a contentious and heated presidential election is another.

The point is that even though the market has softened since its summer peak in July, prices are still historically strong. And the real question I think cattlemen who have yet to market their calves really need to ask themselves is this: How much more risk and volatility am I willing to take on? There's a chance the market will turn higher and rally on its core fundamentals. There is also just as much of a chance prices could soften. So as always -- the gamble is yours for the taking.

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

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