From Our Side of the Fence

EMCC Owner/Partner

Let’s talk cattle and the near future. I believe the cattle industry has reached a tipping point and it’s now time to act. In late August, Corbitt Wall pointed out that 19 of the last 20 Cattle on Feed reports have had larger placements than the previous year. After last week’s CoF placement figure at a whopping 107.3% over last year, it is 20 outta 21.
Corbitt believes and I concur that continued higher placements is because few replacement heifers are being kept. This is backed up by sound slaughter numbers that say year over year heifer slaughter is up 8.6% but the big figure is this year’s heifer slaughter is 17% higher than the three year average.
When we turn to cow slaughter, it is 11.6% higher than last year (many being short bred) and again a whopping 24.2% higher than the 3 year average. Another very positive development is beef exports have increased 20% over last year, now at 20,000 metric tons per week.
So what do these numbers mean? The industry is well into an inventory contraction – this should mean cattle markets will move higher next spring for yearlings and fall calves for grazing. Assuming no black swan events and the sky doesn’t fall, shrinking supply and a simultaneous increase in demand means only one thing; it’s time to go go go.
I know feed is short for many of you, but I believe now is the time to stretch your inventory whether that is bred females or backgrounding calves. It is “only” 180 days to 2019 grass. With a normal open winter, our fall grazing will get most of us to at least mid-December. From there, it is only 110 days and, depending on weather, hay will probably be cheaper in February than it is right now.
If you take a chance and increase your inventory and the weather moves against you, plan B in a rapidly appreciating market is to just buy feed. Plan C is to load ‘em up and sell ‘em. Bottom line – the only mistake is a decline in inventory.
Harvest across the country is gearing up and the consensus is that no matter where the field is or what the expected yield, the actual yields are almost all coming in higher, or at the least, higher than anticipated. The yearling feedlot ready cattle have responded accordingly over the past few months, jumping higher to the current practical price range of $1.40-$1.70.
I hate to admit it, but a few months ago I predicted 600 lb steers would bring $2.00 per pound this fall. I’m still thinking it might happen, but we need to fix our fed cattle industry before that 10% increase to $2 becomes a stable price as it should be. As long as the cattle feeders (and other people taking all the risk and doing all the work) share of profits is less than the packers (little to no risk as they own them for only a week), we will never truly see the prosperity we deserve.
I guess the longer we go, the bigger a proponent I am of Country of Origin labeling for all beef products. I cannot definitively guarantee this would change our world overnight, but at this point it doesn’t matter because I am definitely ready to try something different.
Something very different in our beef packing and retailing segment may be happening right in front of us, but that can wait till next month.
I can’t let this, the month before the biggest election in recent history, pass without making a political statement. I’ve always had an interest in history and politics, so for me these are breathtaking times. I’m literally watching our politics change our history (for the better).
I hate greed, corruption and injustice and I’ve had to watch and endure all of that by both political parties for over 10 years. The 2016 presidential election was an epic event in which a true populist outsider rallied the people of this country by the millions to win the biggest upset in political or sports history since the Olympic hockey team beat the Russians in 1980. I cannot stress enough the importance of the November mid-term election.
While we are living a safe distance away, there is an epic battle occurring right now between people of good character and the greedy, corrupted people where in some cases the struggle boils down to good vs evil. For the first time in my lifetime, although we cast our votes for a person, we actually have the ability to elect justice and reform. I want to see all democratic and republican criminals and outright traitors arrested and brought to justice.
If Democrats take the house or the senate nationally, there will never be the transparency justice requires. As much as I hate to admit it, it has become clear that here in Missouri we are part of the problem because our own Senator Claire has become more of a tool of the Washington, D.C. establishment than a representative of her constituents. I always kind of liked Ms Claire, but somehow she has been turned away from we the people and been sucked into the D.C. Swamp.
I don’t know a lot about Hawley, but it doesn’t matter at this point cuz I’m definitely ready to try something different.
I won’t take Advocate space to spell out what I believe is going on, but I spend a lot of time reading and some time researching. Trust me that there is a lot of good happening behind the scenes and under the radar that needs to be fostered and maintained.
My brother says that I am a little too conspiracy theory sometimes….but check out the YouTube video from “The Praying Medic” titled Q for Beginners Part 1 Who is Q? If it arouses your interest like it did me, see where else that video might lead you. If the white hat wearing cowboys do well and enter 2019 with a mandate from the voters, we will be shocked at what information is declassified and who’s wearing black hats.
After being deceived for decades, for many people the difference between the conspiracy of lies and real truth will be too much for them to emotionally and mentally accept. For many folks I believe an old Jack Nicholson movie quote says it best... “You can’t handle the truth!”
Who wouldn’t want to know why JFK was killed and who did it? I suspect if they really knew, a lot of people.
That’s all for this month. Mark your calendar on Tuesday, November 6th, and commit yourself to voting in the midterm elections. Till then I’ll see you at the sale.