From Our Side of the Fence

EMCC Owner/Partner

Welcome to April. Spring is obviously here and therefore so is planting season. Spring is always an optimistic time for anyone involved in agriculture and this year I believe there may be reason to be optimistic for those of us in the cattle business.

Finally… it seems that fed cattle supplies and beef demand are balanced. Beginning with the Tyson slaughter plant fire, then the Covid debacle, our beef production chain has been off balance for almost two years. Remembering a little over a year ago right before the China virus struck this country, the big story beginning to circulate in our industry was that of a potential worldwide meat shortage. Nothing has happened to alleviate this possibility so I’m becoming cautiously optimistic that demand will carry beef AND cattle prices higher.

Just as the last two years have been a continuous stream of detrimental events, I believe the tide has turned and because of several things converging simultaneously we may be entering a very profitable time for all commodity groups.

The bottleneck in the beef industry – caused by the excessively greedy packing industry – although not broken, is being loosened by new investments into smaller regional beef packing plants and expanding local locker volumes all over the country. The bulk of these investments will show fruition approximately mid 2022.

Also… I have seen estimates that in this country alone there is $1 trillion of pent up unspent disposable income ready to be unleashed into the economy of the United States. With the entire world recovering simultaneously, we will potentially see a boom in consumer spending like never before. One of the largest beneficiaries of this spending tsunami will be domestic restaurants at the same time the demand for American beef exports will also be stellar.

Looking forward, the deferred feeder and fed futures are both running higher than today’s markets. Expectations of higher prices can often become a self-fulfilling prophesy. It is our turn. Cattle markets locally have continued to walk higher, only taking a break after a probably flawed USDA acreage report last week temporarily sent grain futures soaring. Expectations of many Main Street and Wall Street investors generally is much higher commodity prices due to inflation, resulting from massive increases worldwide in money supply (printing money to pay bills).

Fat cattle have broken out of a very long stagnant $114 market rallying to confirmed sales of $119 and rumored sales of $121. Feeder cattle are still good property on sale day. Quality is king and the best 7 weight steers brought up against $1.60 with 5 weight grass steers bringing $150-$180 with some much higher. Pound cows and bulls in Bowling Green now sees cows from $58 to $68 with the best to the high $70s low $80s.

One item of note is that in March and April we sell a great deal of thin cows, which although healthy they are just too weak to make it through the sale, shipping and harvest process. We have at least seven pound cow buyers every Friday so if a cow only brings $.10, that is all she is worth that day. I would also say in many instances that is actually MORE than she was worth. If these cows go down, they are not only a loss for the first cost, often the disposal costs of over $100 are also incurred.

As I look around, there are a lot of things going on in this country I do not understand and generally do not agree with. I will say however that not because of government intervention into the economy, but most often in spite of it, when I look, I see a great deal of opportunity in the future. Technology being developed now in the right hands can transform the lives of millions in a very positive way, not only in this country but worldwide.

One example is the “vaccines” used against the China Virus that utilized a new technology called mRNA. Basically, these vaccines send instructions to our body’s cells instructing them what harmful viruses/cells to destroy. I have read speculation that this same technology could potentially be used to defend our bodies against other diseases including cancer.

Other developments include drone delivery of parts, a robotic evolution that has unlimited Ag applications, enhanced telemedicine for rural residents, energy revolution to renewables will open opportunities for land owners to grow crops alongside wind turbines and solar energy projects.

So, I need to take a minute to set the record straight. Through the grapevine, I’ve heard that some people that have read this column have concluded that I’m a Republican because of my support of conservative candidates with conservative American values.

That actually is not true. Unfortunately, some of my Democrat friends have been offended by my political views and for that offense I apologize. Although my voting record nationally would lean strongly Republican, but locally, I support many conservative Democrats and Libertarian candidates.

As I have come to believe America’s struggle has nothing to do with being Republican or Democrat, nor race or ethnicity or even socioeconomic status. Our struggle as Americans is to determine what kind of future we will have and what legacy we leave our children and grandchildren. The struggle is between nationalists who love their God and their countries and globalists who love and worship money and power. If you must label me, then stamp me with the label “American” because I love this country and all the people in it way more than any political party.

The Latin phrases “e pluribus unum” (one of many) and “carpe diem” (seize the day) have become popularized, but we as Americans at this time in history need to add another Latin phrase to the American lexicon. The Latin phrase “Cui Bono” (“key bono”) means “who benefits”. So as new government policies all over the world are unleashed weekly, cui bono is a question that should be asked loudly and often.

I believe that’s all for this month – I hope I will see all of you at the sale.