From Our Side of the Fence

EMCC Owner/Partner

As I write this I have just received a very interesting phone call from a customer, who has been a very reliable source of information. This customer had received a phone call from their loan officer notifying them that they have placed them on the “distressed borrowers list”. This list, and the paperwork that goes with it, has the feeling of something being resurrected from the 1980’s farm crisis era.

Let’s think about this a bit and think through to the conclusion of this action. I believe a major agriculture lender, if not several, is positioning itself to call the notes or not renew operating notes for their “distressed borrowers”. I could speculate extensively but for now I’ll leave it as a news scoop.

The cattle business, as well as agriculture in general, has had some very tough years recently. If you borrow and you’re in the cattle business, regardless of your net worth (my customer’s net worth is easily over a million dollars), expect extra scrutiny and maybe even a call from your lender.

Moving on... I had the chance to drive out to San Diego over the summer break. What are three things that they have that we don’t?

1) Lots of electric cars, specifically Teslas (or would that be Tesli for the plural?);
2) Very big good but crowded roads and;
3) Short paper straws. Does anyone remember rushing to drink the carton of milk in kindergarten out of a paper straw before it got too soggy and limp? I have a feeling the short paper straws of our past are also in our future.

So let’s look at the latest Trump escapade. While he has the progressives and the globalists distracted with trolling tweets and the Mueller circus, his people quietly literally began “draining the DC swamp”. How? The USDA announced that they will be moving two of USDA research agencies to Kansas City. Also the Bureau of Land Management (BLM) is moving their office from Washington, D.C. to Denver. It is my belief that around 85% of the federal land they administer is west of the Mississippi River. What a novel approach to government, putting the office where their work is, and incidentally where the people are – and not 1,000 miles away.

Interestingly 2/3 of the researchers with USDA say they are not going Kansas City. Personally I think that’s for the better. Anyone who would prefer living in Washington, D.C. over Kansas City probably needs to stay in Washington, D.C.
We don’t need those kind of people here and sounds like some big time employment opportunities for some local residents to me.

I cannot mention Washington, D.C. without mentioning the Mueller hearings on the Mueller report. The bottom line is Mr. Mueller I believe was installed as a figurehead to give legitimacy to all of the angry Democrats, progressives, Hillary supporters, and Never Trumpers who did search for two years for something, anything, to indict President Trump. Hopefully now the Russian collusion narrative will finally be dead.

Also a sparsely covered story which I cannot impress on readers the importance of enough is the arrest of Jeffrey Epstein. Basically he is a child pedophile sex trafficker that has operated with impunity for many years. He is reported to be a billionaire, however no one can figure out how he is ever made any money. The on-the-street conclusion is he made his money through extortion of wealthy people and politicians all over the world by trapping them and filming them with underage women and boys. This allegation was bolstered this weekend by the discovery that someone at Morgan Stanley had granted Epstein access to all the company’s IPOs.

By the way, main stream media’s use of the phrase “under age women” is a politically correct way of saying “children”.
Epstein was arrested in 2006, but given a sweetheart plea deal by prosecutors in Florida after they received a tremendous amount of pressure from Washington, D.C. Ironically the head of the FBI at the time was none other than Robert Mueller. Epstein’s lawyers had argued that he be released to serve his time awaiting trial at his Manhattan mansion, however fortunately the judge determined he was a flight risk due to his excessive wealth and has him incarcerated.

For protection, he is segregated away from the general prison population being assigned a former police officer, Nicholas Tartaglione, as a cell mate. Tartaglione was previously an Orange County police officer who was arrested in 2016 on suspicion of killing four drug dealers in a drug deal gone bad and then burying them in his backyard.

In this morning’s news, it was reported that Jeffrey Epstein was found semiconscious on the floor of the cell rolled up in a fetal position with severe bruising on his neck. When asked, the former police officer said he didn’t see anything, but never touched him and he suggested it was some type of attempted suicide. You cannot make this stuff up.

The reality (alleged) of Jeffrey Epstein is he trafficked girls/children to the very wealthy and the politically connected, including Prince Andrew of England and Bill Clinton. Some alleged accounts state that these girls were brutalized to the point of near death occasionally and there is also so far unsubstantiated allegations that some of these children may have been victims of some type of Satanic rituals. For those who absolutely hate Trump, I would ask what is so bad about an administration that puts pedophiles and billionaires in jail when they have operated with impunity for decades under both Democratic and Republican administrations.

It will be interesting and disturbing (is he is one of many) to see how deep this rabbit hole goes. The swamp is being drained.

Beyond Meat stock price marches higher yet again. 775% higher than the IPO. According to a Zero Hedge article, the market cap of Beyond Beef now stands at $14 BILLION – nearly has high as ConAgri and American Airlines, the world’s largest airline.

Annual Revenue Perspective
CAG (Conagra Brands Inc)-$9,500,000,000
AAL(American Airlines)-$44,000,000,000
BYND (Beyond Meat)-$88,000,000

There are all kinds of ways you can justify this, but generally speaking, the IPO price is closer to actual valuation of the company. In other words, somebody blew it or there is something going on beyond any logical reason or a short squeeze.
Another sparsely covered related story this past month is the swine fever epidemic affecting China and spreading across the globe. You would think governments and the people they control were trying to keep that a secret. Perhaps to prevent a panic, but perhaps for some other reason. It’s the biggest food story of my life and it is a secret. A well fed population never revolts.

Let’s talk cattle. We sold 123 high quality fed cattle Friday and our market once again was steady at $112-$116. This compares to $1 lower in the west with the bulk of their trade at $112 -$113.

The cattle on feed report was neutral to slightly bullish. The cattle inventory report shows a slight decrease in expected 2019 calf crop. A smaller 2019 calf crop and an increase in the percentage of heifers on feed are telling us as the cycle turns and global demand for our product increases. As hard as it may sound to hear, after last winter and really the last two years of environmental challenge, now in the least is not time to quit and may be the perfect time to expand.

Increased heifers on feed; time to expand? As always this time of year, western yearlings are coming to market. There is an underlying cautious optimism permeating the feedlot sector causing the feeder markets to be pushed higher.

We are gathering consignments for our late summer and fall program calf and yearling sales. Yearling specials in Bowling Green will be the second and fourth Friday from now till Thanksgiving.

Our next special in Boonville will be August 6, which will include 400 head of the McBee Roundup. I always enjoy the McBee Roundup sale as it’s nice to see so many people working together to add value and to continue to improve their offerings.
I would also like to highlight our after Labor Day sale on September 3 in Boonville. We are expecting 1,200 cattle with excellent quality from start to finish, including several consignments over a hundred head. If you have cattle to sell and are interested please give us a call, and if you have neighbors, do not keep us a secret.

Another date of importance is August 12, the next USDA crop report. Generally the USDA statisticians do a good job of not rocking the boat, but this year is so unusual I predict they will overreact when they see the prevented plantings – the report could be a doozie. The real market report won’t happen until the fall when we find out if we have a widespread early frost. Wouldn’t that capsize the boat.

Time to go feed calves, so that will be all for this month; see you at the auction.