Is a Break in the Cattle Market Coming Soon?

[Logan52]

I know it is popular to say cattle are only now bringing what they are worth, after years of having the typical cattleman being unrewarded for their effort.
But history shows us over and over that the type of market we are seeing now is usually the prelude to a major break.

The bourbon distilling industry has been growing like mad in central Kentucky but is now facing a number of headwinds that threaten late arrivals to the party.

My fear is that those holding expensive inventory when the market does break, and it will, face a very difficult situation if they are at all overextended.

Will the changes we have been seeing prompt the end of an era for the moderate sized cattle producer? Or is it full speed ahead in a glorious sunrise of profit?

 

[GoWyo]

I know it is popular to say cattle are only now bringing what they are worth, after years of having the typical cattleman being unrewarded for their effort.
But history shows us over and over that the type of market we are seeing now is usually the prelude to a major break.

The bourbon distilling industry has been growing like mad in central Kentucky but is now facing a number of headwinds that threaten late arrivals to the party.

My fear is that those holding expensive inventory when the market does break, and it will, face a very difficult situation if they are at all overextended.

Will the changes we have been seeing prompt the end of an era for the moderate sized cattle producer? Or is it full speed ahead in a glorious sunrise of profit?

The market will break over when it has more supply of cattle than demand. Many folks who are in a position to build numbers of females also remember 2015 very clearly. The other thing is half the country in the range cattle areas are in a long running drought. That is not conducive to rebuilding cow numbers. To me, if you have grass or other feed then run cows, but I wouldn't go into debt to buy cows and risk getting pinched by a market disruption at the time a loan payment is due.

 

[daneg]

Won't be long now, with politicians fooling with tariffs, the media screaming of cows catching bird flu and the consumer struggling with increasing cost of everything.

 

[kenny thomas]

Some months the futures price on feeders was down over $4 yesterday and down over $7 already today. Pretty good sign it might be going down.

 

[Dave]

Some months the futures price on feeders was down over $4 yesterday and down over $7 already today. Pretty good sign it might be going down.

Or it could be a sign that the shiny shoes boys are playing with the market the same as the stock market is doing. Live trade hasn't been following the futures market for a while.
I looked at the results from Superior's sale yesterday. It doesn't look like the buyers there got the memo.

 

[Rafter S]

I had been planning to buy a few stocker calves in a week or so, turn them out on good grass, and sell them this fall. It wouldn't be with borrowed money, but I'm still thinking I'll probably wait a little longer to see how things shake out.

 

[chevytaHOE5674]

If I could accurately predict the markets I'd be rich. Haha

 

[Dave]

If I could accurately predict the markets I'd be rich. Haha

I have a friend whose Dad was worth some serious money. He liked to play around with the stock market. Sept 9,2001 he shorted the market. Then 9/11 happened. Stock market dropped like a rock. He made $250,000. Sometimes it is better to be lucky than good.

 

[gman4691]

I know it is popular to say cattle are only now bringing what they are worth, after years of having the typical cattleman being unrewarded for their effort.
But history shows us over and over that the type of market we are seeing now is usually the prelude to a major break.

The bourbon distilling industry has been growing like mad in central Kentucky but is now facing a number of headwinds that threaten late arrivals to the party.

My fear is that those holding expensive inventory when the market does break, and it will, face a very difficult situation if they are at all overextended.

Will the changes we have been seeing prompt the end of an era for the moderate sized cattle producer? Or is it full speed ahead in a glorious sunrise of profit?

It should also be noted that fewer and fewer people are turning to agricultural pursuits. I once read the small operators (fewer than 50 head) produce a significant percentage of the beef on the shelves.

 

[SBMF 2015]

The small to mid sized cow guys will survive. It's the stockers and the feed lots that will loose their butts.
It's all fun and games until you have to fill the lots again.
The cow guy's own the factory. Take your profits. Maintain your herd size, replace your old cows. Maybe purchase a small expansion. Something that your profit can cover. No borrowed money that will have to be repaid.

 

[M. Johnson]

I read the following on BeefMagazine.com under the article "2024 in the rearview mirror"

"By late spring the U.S. beef herd was predicted to be the smallest since 1961. Weather problems and surging costs forced farmers and ranchers to send more females to slaughter. The higher prices paid for cull cows helped fuel liquidation. The shortage of beef cattle has gotten so acute that some dairy producers are breeding hybrid dairy-beef calves to sell into the low-inventory meat market."

Maybe the market is as high as it is right now simply due to supply and demand. But who knows how long it will keep up

 

[Dave]

The small to mid sized cow guys will survive. It's the stockers and the feed lots that will loose their butts.
It's all fun and games until you have to fill the lots again.
The cow guy's own the factory. Take your profits. Maintain your herd size, replace your old cows. Maybe purchase a small expansion. Something that your profit can cover. No borrowed money that will have to be repaid.

I can't imagine any stockers of any size don't have LRP on their calves. All the feedlots around here have a hedging expert on staff. Either way they have themselves insured against the sudden downturn which will happen eventually. I knew people who lost their shirt in '96 and in 2015. Anyone who has been in this business very long will have watched that happen and have their rear end covered.

 

[mwj]

LRP and hedges help stop the huge losses but do not insure a profit. If it drops fast it could get ugly for some that thought they were covered.

 

[shaz]

I don't think we need to worry about the supply side - consumer demand may be an issue sooner or later

 

[Stocker Steve]

Record cow prices here at a bred sale on Saturday. No top yet.

Cattle traders are buying some open cows to rebreed.

 

[dorite007]

with all that's going on in the market rite now only the rich people will be able to buy and sell at will, others will have to either keep and sell only the old ones and the bull calves , they will have to keep there producers to keep up there herd

 

[crossbreed]

I can't imagine any stockers of any size don't have LRP on their calves. All the feedlots around here have a hedging expert on staff. Either way they have themselves insured against the sudden downturn which will happen eventually. I knew people who lost their shirt in '96 and in 2015. Anyone who has been in this business very long will have watched that happen and have their rear end covered.

Have a friend who previously ran around 250 yead of momma cows. He got into the stocker market and eventually sold all the cow/calf pairs. Right now, he's sitting on a lot of land that he could not fill with stockers at the current prices. He comes from old money that says you don't operate on banks money with cattle when the market is this high. Says he's going to harvest the wheat pastures and hope that prices fall to the point he's comfortable buying again.

 

[greybeard]

From what I see on consumer side, there is no slowdown in demand. I see empty spaces in the beef section but it's because packages are grabbed and sold almost as soon as they hit the meat cases.

I DO see some interesting ways beef are packaged now tho. Roasts are all trimmed a lot and on the smallish side. All roasts. Top Sirloin hard to find here. Chuck/7 bone steaks are very rare. Every thing beef is small now But, if the ground beef chubs get any bigger, they'll be carrying them out to the parking lot with a forklift. Saw some in HEB last week that said 15 lbs, as big as a saucer and long as my arm.

 

[mwj]

From what I see on consumer side, there is no slowdown in demand. I see empty spaces in the beef section but it's because packages are grabbed and sold almost as soon as they hit the meat cases.

I DO see some interesting ways beef are packaged now tho. Roasts are all trimmed a lot and on the smallish side. All roasts. Top Sirloin hard to find here. Chuck/7 bone steaks are very rare. Every thing beef is small now But, if the ground beef chubs get any bigger, they'll be carrying them out to the parking lot with a forklift. Saw some in HEB last week that said 15 lbs, as big as a saucer and long as my arm.

I love a bone in chuck roast . The ''flatiron'' steak did away with that. They de-bone the chuck and remove that muscle group leaving a very different roast.

Sticker shock has a lot to do with package size.When the price starts with a 2or3 they look at pork or poultry.

 

[coachg]

Took a little hit Friday our stockyards are telling us . Of course we are hauling our calves this week .