55 Years And Counting From The Tractor Seat

By bill whitman 

 I think we all know by now that cattle have reached unheard of prices and there seems to be no end to how high they will go. This has been very good for cow/calf raisers as they are assured of a fair price for their spring and fall calves. I’ve often encouraged younger and smaller farms to add 20-30 head of cows to give them a source of revenue that can be used to help the family make it through low grain prices.

There is something that we should keep in mind. Feed yards will be operating on a much higher risk as their cost versus market is not as firmly set. When corn bounces back, (eventually), their exposure will be magnified as their margins are set against fat cattle prices. The pure volume of dollars involved will influence feeder prices… eventually.

Since most of my livestock readers are cow/calf farms, let’s focus on maintaining profitability in these operations. We need to be aware that the prices we’re receiving these days are not going to maintain the record-breaking margins we see in today’s market. I seriously doubt that we will return to sub $2.50 for 5 weight cattle but we know that these high prices are due to low corn prices and a retail demand that has yet to adjust to the new prices.

It seems reasonable to suggest that the higher prices we’re receiving allow us the opportunity to adjust our management to include backgrounding, RFID tagging, and perhaps do a little market research to ensure we are getting the best prices available. I know in our part of Indiana, there is a significant difference in local prices and a 200-mile trip to Joplin. Twenty five years ago we would never consider a five hour drive to sell our calves. Is it worth $150 a head to travel? I’m guessing that if we think about it, it may be worth getting out of our comfort zone a bit.

I know several small herd owners who do not currently vaccinate calves or castrate bull calves. For years, the excuse used is there wasn’t enough money to cover the costs. Clearly, there is enough now. I also believe that we will see sale barns and buyers being more selective in the cattle they handle, requiring backgrounding and tagging at a minimum. I’m sure there will always be buyers willing to purchase at a much-reduced price from those who still won’t vaccinate and background.

So, with many factors needing to sort themselves out, having a cow-calf herd remains a good investment with a dependable ROI. There is a concern at how the consumer market adjusts to higher prices, heck, I even stumble when walking through the grocery meat counter; but keep in mind that there are very few red meats that have the taste making it worth extra consideration. Nothing like a rib-eye in my book.

Horse Sense: If chasing your tail is all you accomplish today, it’s likely you won’t get far.

IndianaAg@bluemarble.net