Call the Market

It's one heck of a predicament to be in to need a snowstorm that's so challenging and unforgiving that calves will be lost from piercing winds and blinding, cold, wet snow -- all for the hope that the ground will soak up the storm moisture and tame the country's drought.

"Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times," wrote author G. Michael Hopf. When we evaluate the cattle market, or the cattle industry as a whole, or even our country, I think it's safe to say hard times are upon us, and we will see strong men and women made from these days.

The problem with cultivating strong men and women is that it comes at an expensive cost. During the past three years, cattlemen prayed for better prices and saw no mercy. Cattlemen prayed for moisture and saw higher temperatures. And now, cattlemen pray for the strength to get through this week's storm and for the trouble to be worth their time and energy.

Around most operations, dinner conversations have been grim. How much fertilizer can we afford to put on? Did you see the bank's note about an increase on our interest rate for our operating loan? Were you able to find any more hay to buy? Did the co-op let you contract any more fuel? And the list goes on, and on, and on.

The list of reasons why we should shake our head at this line of work and question our sanity rises beyond belief, but cattlemen have been up since the break of dawn to fight the day's weather and know we desperately need this moisture. In these trying times, it's easy to become overwhelmed and struggle mentally. But I'm here to encourage you, and to remind you that your work isn't going unnoticed and that in time, the market will indeed pay producers the earnings they deserve.

First, DTN's Ag Meteorologist John Baranick said that "North Dakota is looking like it will get the worst of the week's weather and could get as much as 12 to 24 inches of snow. Northern Wyoming, Montana, the northern part of South Dakota and Northern Minnesota are more likely to get 6 to 12 inches, but eastern Montana could be well over a foot." Some areas may get even more than 2 feet.

You can see his latest blog about the storm this week -- and what is coming next week -- at https://www.dtnpf.com/….

The snow started Tuesday morning and could last all through Thursday. It also coincides with strong wind gusts of up to 50 miles per hour, which are creating blizzard conditions.

"On Thursday, winds could ramp up to 50 to 65 mph. The heavy snow will translate to 1 to 2 inches of liquid, which should help put a dent in the drought. Following the actual storm, cold temperatures in the following week will make for a slow melting process," he said.

One to 2 inches of true moisture is an absolute blessing and will undoubtedly help alleviate some of the drought's pressure.

Second, while on-feed numbers are high now, they won't be forever. Once last year's calf-fed fats get worked through, the market is sitting in a ripe position for calf prices to be stellar. With how aggressive the nation's cowherd liquation has been, those who have calves to sell are undeniably going to reap higher prices this fall. As of April 12, the October feeder cattle contract sat at $179.92, and the November feeder cattle contract sat at $181.02.

Regardless of how you choose to look at the market's outlook, weathering this week's storm to gain 1 to 2 inches of true moisture and to see higher feeder cattle demand in the latter half of 2022 is something we all can keep in mind while battling the wind and snow. I tip my hat to each and every one of you out there battling the market's cards. Whether it's drought, cash flow insufficiencies, or the squeeze from higher fuel prices, know that you are the men and women who will create good times once again through your commitment to this industry, and precious way of life.

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

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