Call the Market

Cattle Market Emotion Ends With a Long Mile

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
If there's one thing that has held true for cattlemen throughout the years, it's that they're still willing to go the long mile to make sure the job gets done. (DTN file photo by Mary Kennedy)

The evolution of the cattle industry has been fast and furious, prosperous and maddening, vast in opportunity, but sometimes saddening. Regardless of how you look at the glass -- half full or half empty -- there's no denying this industry isn't for one who's lackadaisical in heart or mind. The advancements within our industry have completely changed how the industry runs and operates as a whole and have made opportunities available to cattlemen today that weren't even imaginable 30 years ago.

We have spent a lot of time chatting about fear and emotion in the marketplace. It can falsely drive a market faster than almost anything, and it's evident that the after effects of the emotional rollercoaster stick around longer than the scare. Remember the packing plant fire this past August in Kansas? The bottom fell out of the market in a matter of mere days, all while packers harvested more cattle the week after the fire than before, and both fat cattle prices and feeder cattle prices were depressed for weeks following the event.

To be quite frank, there are two things we know about the market and the role emotions play within the market: there will be more scares and trade will have to figure out how to navigate the waters in the meantime. This may seem like a pretty easy concept to understand, yet our industry is subject to emotional whims time and time again.

But how do you decipher what's real, just quick market panic, or what's something you should be terribly concerned about? All of which are such loaded questions, and as different situations arise different approaches have to be taken, but I believe two of the most important things you can do in times of distress are 1) educate yourself on the matter and 2) give it time.

For instance, let's talk about last week's unveiling of the coronavirus. Upon hearing that China had an outbreak of the virus that was spreading, and has even ended up in our own country, markets dove lower and fear broke out. But as more time goes on, and the more reading you do on the virus, you understand that world health officials are still in the infancy stages of learning about it, but have shared that you're more likely to be affected by the common everyday flu. When compared to more serious matters, the coronavirus (though it's still being studied) is not as deadly as SARS. Given that we just signed a massive trade agreement with China, which commits them to buying more ag products, everyone panicked.

We understand that emotions (unfortunately) will always have some leverage on the marketplace. Giving matters of concern time and growing your own understanding of the matter is crucial, but what if the matter at hand really is life changing or market altering?

Let me share a story with you.

In the fall of 1961, my Grandpa was a junior in high school full of ambition, a yearning for the future and a side smile that led him straight into mischief. His family ran sheep and raised cattle in southern Montana, and that fall the market nearly broke in two. Being a young 17-year-old, my grandpa knew that he had to get his pot load of yearlings sold, but couldn't afford to pay commission and merely give them away at local yards.

A neighbor down the road knew of the Rice Brothers Commission Firm and Stockyards in Sioux City, Iowa, and had just sold some cattle for prices nearly untouchable at the time in the North. After pacing the floors, knowing that bills needed to be paid and operating notes were coming due, my great-grandfather told my grandpa to call the Rice Brothers and see what they could do for a pot load of yearlings coming from Montana. Upon mustering up the courage to ring the dial to what seemed to be a last chance opportunity, the Rice Brothers told my grandpa to get those yearlings on a truck and the rest would be taken care of.

And so, my grandpa did. He loaded his yearlings on the truck, asked the driver if he could ride along, and the 17-year-old boy and his yearlings went east for higher prices.

Upon arriving in Sioux City and getting the cattle bedded down, fed and settled in, my grandpa patiently waited for the next day when his cattle would sell. The trucker tipped his hat and nodded as he pulled out of the yards and hollered how to get to the bus station where my grandpa later caught a ride home. The next day, around 10:00 a.m., his steers had sold and when he walked into get his check the Rice brothers wouldn't let him leave before they fed him a steak dinner and thanked him for entrusting them to sell his cattle. The young pup from Montana sold his yearlings, didn't lose his ass and left Iowa with a healthy check and full belly.

This may just sound like a story of the good ol' days, but it's far more than that. It's a reminder that in times of worry and uncertainty you still have to make ends meet and get business done the best you can. Getting caught in the whirlwind of panic never helps a situation and if the matter is important and needing attention, worry and distress only take time away from the subject.

We all have access to news and information at the tips of our fingers. Writers have a duty to serve their audience with news and the most accurate information. Just because a new headline surfaces about something doesn't mean the market needs to crumble. Everything in life takes time, and understanding the importance of situations that could change the market certainly takes time as well.

Since 1961 a lot has changed in life and in the markets, but if there's one thing that remains, it is that cattlemen are willing to go the long mile to make sure the job gets done.

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

(BE/CZ)

ShayLe Stewart