Thoughts from
Justin’s Side of the Fence
by Justin Angell

I’ve spent most of my life being an agent selling cattle for customers and, just the way I’m wired, a lot of the joy in my life comes from the success of those people I’m working for. With that in mind, I’d like to share some recent highlights.
We gathered a new customer at F&T who sold 50 yearlings two months ago. I saw him recently at the High Noon Cow Sale and he told me for the first time in his life he was able to take that calf crop check to the bank and pay his operating note to zero.
Another of our customers sold cattle and I texted him pictures of the prices off the sold board in the auction arena. Mistakenly, I got a text from him immediately that was supposed to go to his wife. That text said “the calves did really, really good, when we go shopping we will be able to buy everything we wanted.”
The best news is after decades of being pounded by the environment, the government, the markets, etc., with a few short periods of relief, it finally appears this may be a sustained rally instead of a spike up immediately followed by a spike down.
I know our expenses are high, but feed is as cheap as it ever was. No matter what segment of the cattle industry you’re in, the net profit per pound of gain has never been greater. I can’t emphasize this enough. The net value of the gain has never been greater and now is the time to press the advantage making our cattle bigger. Now is the time to capture extra money from this opportunity and prudently use it for debt reduction, retooling, and in some cases herd expansion.
As an example, if you are going to own and keep a cow, selling a lightweight calf less than 400 pounds seems like a missed opportunity to me. Sure a 300 pound steer might bring near five dollars a pound or around $1500 per head. If you keep that same calf four more months he could bring over $2000 without a lot more input other than time.
Although I am extremely comfortable with the cattle market staying at this elevated price range, I believe for most of us, some type of risk management is crucial. As the events in the Middle East this week have reminded us, Black Swans are still possible. No more Debbie Downer talk here; you get the point.
As we head into the summer doldrums, calves are in the four dollar per pound range, yearlings in the three dollar per pound range, while good bred cows, bred heifers, and pairs are either side of $4000. Using the cattle cycle as my guide, in theory, we have not seen the high yet.
If you wanna produce beef, you’ve got to buy cattle. Unfortunately, if a consumer wants to produce supper, they’ve got options. The principle of substitution states that at some price consumers will substitute one expensive item for a similar cheaper one.
Someone in my past wisely explained to me that as a beef producer, we don’t need to worry about that because there’s nothing similar to beef. We have a very loyal customer base, if family budgets get tight (like they are now) a family will refrain from taking a vacation before they refrain from buying beef to grill. Interestingly, economic activity statistics has shown us that this year travel in the United States has declined, while beef consumption has not.
As far as I can tell, all lights are green and “full speed ahead.” Anybody still in our cattle business deserves all the good things this high market brings.
On a personal note, my health is finally rapidly improving and for the first time in years I feel great and I’m getting stronger. Kelly didn’t understand it, but I told her I felt like a calf being turned out of the sick pen on spring grass.
I think that’ll be all for this month. Come see me, on Tuesday, at the auction!