NOTE FROM JACE:
It doesn’t matter if the markets are trending up or trending down, the market still has peaks and valleys… whether it goes uphill or downhill. Right now, I’m really not sure that it’s headed up or down, but I can tell you this… the peaks and valleys that we are going through right now are in a big valley. I will try to explain why… We are just a “blip” on the map. Most ranchers are home working and don’t get the chance to go outside of their little circles. I’ll try to explain what I believe is going on outside of our little circle with what’s going on with the market. This is a typical January as far as people holding their cattle over into the new year. Some of it’s for tax purposes, some of it is to get the cattle weaned, and some of it is due to the holidays. But, what’s not typical for January is our weather. Example: if there are 100 feed yards in America, 70 of them will not take cattle due to their pens being under water, muddy, and/or snow, all weather related. That means the other 30 have to take the cattle being sold. Now they have run out of pens. Where are the cattle going? Where do we put them? I’ve had some order buyers tell me that if the cattle were free, they still couldn’t take them! This was the market for this week. We had customers selling their cattle and their 475lb steer calves brought $10.00 per head less than their 575lb steers. The 650lb steers brought the same dollars per head as their 575lb steers. Dollars and cents, this makes absolutely no SENSE. Farmers & ranchers can turn out their lite calves. But the heavier cattle have no homes. With the storm coming through this week, some buyers say they (again) won’t be able to buy the cattle they need. What is the solution? Some drier weather and some patience on the seller’s side. My prediction over the next couple of weeks: we could see fat cattle bring $1.28 to $1.32. We could see feeder cattle bring less per 100 than the fat cattle. I’m still getting asked if I believe the government shut down is affecting the market. My answer is still absolutely not. The only federally employed government workers in the agricultural industry is the meat inspectors. The meat is still getting federally inspected. As I said, the fat cattle prices are climbing. If the shut down was affecting the market we would be seeing a decline in the fat cattle prices. The other affect is that the federal workers on furlough may not be able to afford the better cuts of meat. The one thing that the weather has helped is increasing the butcher cow market. It’s because the ranchers are not bringing their butcher cows in due to the muddy pastures which causes a reduction in the availability. To date we have sold so many there are now less available to sell. So, hang in there, be patient. I see better days coming in the near future. Time will tell.
See you Wednesday, at the sale!
NOTE FROM JACE:
Dear Mr. President,
I’m writing this on the behalf of myself, my family, the majority of my customers at La Junta Livestock, and cow/calf ranchers throughout the United States. The steak that you are beginning to eat, started with one of us farmer/ranchers in America. (unless its imported beef…) I would like to tell you how it gets from us to you and how this can stimulate the market in all the red states and some of the blue states. (This is where a majority of the farmers & ranchers live and work their farms and ranches.) Let’s start at the very beginning… We have a cow and a bull raise a calf in the spring, which is sold in the fall weighing from 500 to 600 lbs. This sounds pretty simple and easy so far, but a lot of us are 2nd, 3rd & 4th generation farmers & ranchers. We have spent years and years being stewards of the land and collecting the best genetics and proper vaccinations to raise the cattle to sell in the fall to wheat farmers or feedlots. Our whole year could be determined by the weather (rain, drought, snow, etc.). If these calves do go to the wheat, they start at the 500 to 600 lbs and grow to 800 to 900 lbs before they go to your public feedlots. They are then revaccinated, placed in pens, and fed American raised corn and hay. When they reach an estimated weight of 1300 to1400 lbs, they will be purchased by an American packing house which is owned by Americans, Brazilians, and Chinese. Then the livestock is butchered/ processed and sold to grocery stores, retailers, restaurants or exported. That’s the path of the beef itself. Now let’s follow the dollar… It takes an estimated $500.00 to $600.00 per cow to raise the calf due to land payments, land taxes, water, interest, hay and feed for the winter, leased pasture, bull purchase, etc. We are one of the few businesses in America that buy retail and sell wholesale. This year’s calf crop is probably (estimated) at between $650.00 and $750.00 per calf at market value when it is sold to the wheat farmers. The wheat farmers have an estimated $300.00 to $400.00 expense in trucking, equipment, medicine, pasture, hired help, interest, and death loss, etc. Next it goes to the feedlot at an estimated value of $1000.00 to $1300.00. The feedlot then feeds that animal to a value of $1400.00 to $1700.00 with an expense of $400.00 to $600.00 (corn, hay, silage, medicine, death loss, interest, trucking charges, yardage, etc.). The Corporate packinghouses are listed on the NY stock exchange and that information/pricing is available to the public. Mostly what I heard this year was that the packing houses were netting $300.00 to $500.00 per head. Mr. President, You ran your campaign on fair trade with foreign countries. This industry’s money is not staying in America. If the cow/calf farmer/rancher, the wheat farmer, and the feedlot all made a mere $100.00 to $200.00 more per head, then this would stimulate our own communities and our own economy. People would buy more vehicles, more tractors, more products, etc… and FOR PETE’S SAKE, if there just happened to be ANY left over, we might even be able to take time off and go on a vacation! At the end of the day, the money manufactured by the farmer and rancher product is leaving the country. Mr. President, if you have any idea on how to make our livelihood better and balanced, PLEASE let me know!
La Junta Livestock Commission Inc.
President & General Manager
The only locally owned and operated Livestock auction
Proud American wanting fair trade in the Livestock industry
(IF I were to write a letter to the President, it might sound like this… I’d be interested to hear if you have additional insights concerning the livestock market that you would also like to share with our President. (keeping the conversation light and clean of course… J))