From Our Side of the Fence

EMCC Owner/Partner

I guess it would be safe to say there is not going to be a water shortage in June this year. I know farmers are having a tough go planting all over the Midwest because of the excessive rainfall, however this spring I have triple stocked my pastures and fortunately this rain and the right temperatures have made the grass that they did not stomp in to the ground really grow and get ahead of them. It will have to hold out until the end of June or the first 15 days of July. That is when most of these cattle are to be shipped to feedyard. The goal is to get them into the late 2019 or early 2020 fed cattle market so that I can hopefully catch a break even. Unless something changes, we will all need to be ready for a much lower calf market this fall. There are many backgrounders like myself who after experiencing the horrific winter and a 10% death loss will not be buying calves in October and November this year. Calves in the fall look cheap, but they aren’t. This may be the year to either have your calves sold before October or plan on weaning them and probably keeping them into January or February. Once again, I will pitch fall calving as a good option in this area. A fall born calf will never hit a bad market.

So the biggest change for me recently is my old buddy Austin Epperson has graduated from college and gone back to New London. After almost 4 years, that leaves me without any farm and cattle help. Amazing what happens when a luxury like that is no longer available. Austin is easy to pick out, 6’5” with the red hair, so if you see Austin stomping around the Vandalia area tell him hello.

Everyone in agriculture has found ourselves on the front lines of a trade war with China. I predict the closer to the election the greater the noise trying to politicize this will become. Personally I have no opinion about the personality in the oval office and this has nothing to do with any political party, however as far as our nation is concerned, China is not our friend and never will be. The guy in the oval office did not start this trade war – he just happens to be the first person to fight back after decades of dismal, sometimes criminal, leadership from our permanent professional political class.

As you know I’ve been fascinated by the political turmoil in Washington, DC over the past decade. What is unfolding is a complex crime 1,000 times worse than Watergate. The criminals and traitors never thought “she” would lose, so the trail of evidence of wrongdoing is broad n deep. I’m hopeful that our two tiered justice system will soon be rectified. The Barr bill is soon to be paid.

With our abundant grass, the pound cow run has been halved and the price is responding with a slightly higher trend: Most cows priced at $.52 to $.62 and the very best, fattest cows at $.70. This may be at least a little bit aided by Japan’s opening to all U.S. beef products. Last Friday we also had pound bulls up to $1 per pound.

Like a squeaking wheel, I will remind everyone that our industry is in trouble unless we solve our packing industry problems. The packing segment is widely reported to be making $300 per head or more “in the meat.” It used to be that packers broke even or made a small margin in the meat and the bulk of packer profits were made in the non-meat products such as hides, offal, blood, and such. They process around 650,000 cattle a week (550k fed steers and heifers, maybe 100k cull cows, bulls, and dairy). That’s a drain of near $200 million per week of cattlemen’s equity that not so long ago was shared among cow/calf, backgrounders and cattle feeders. Ideally that is $100 per head margin of profit cattle producers like you and I for each of these three stages of production are no longer sharing. It is a tough situation that has gone on for too long in which the consequences are yet to be fully realized. I don’t like the way this is going, and I think it puts our whole industry in a far weakened and vulnerable position.

I hate to leave on a sour note, but I am… That’s all for this month I will see you at the auction.