The Market Report

       March 12, 2019   

 

 

The sales have been small, therefore trying to get a handle on the real market isn’t always easy this time of year. However having said that, the smaller sales have provided some outstanding prices. Some of the prices are reflected by quality, some from demand, and of course the shorter supply has also played a big part in those prices. 

The floor under feeder cattle has been the fat cattle market. We might have seen feeder cattle a lot higher this time of year if the weather in some of the major feeding states wasn’t so bad. Mud and cold would best explain the feed lot conditions this winter. We have talked about the fat cattle market in past reports and how cattle coming to market from those lots are lighter, don’t yield as well, and cost more to feed. If we look back, the forecast for this time of year was for fat cattle to over supply the market and prices would surely drop. We have expected the winter fat cattle to be lighter because of the weather and sure enough they are. That means less meat from the same numbers or even more cattle because they are about ten pounds lighter per head. If we look at the futures, they predict we are going to be lower as we move into summer. Here again we think the reduction in fat cattle weights and the death loss could create a more friendly market than the futures would indicate. We think we can maintain these prices right into summer. That might help determine just where the market for the fall calves could be headed this spring.

Today as in the past we have been working on special markets and making them available to anyone who wants to access them. In the past the requirements to qualify for some of these new markets has been a moving target. This year is no acceptation. In order to qualify for the natural program this year your cattle will need to be aged, sourced, EID identified, and approved by a third party. We think this effort is sure worth the time spent and here’s the reason. The consumer continues to place a lot of value on the term “natural”. In the case of beef it means no synthetic hormones and no antibiotics were given to the cattle. In the last two years the packer has been selling these cattle for big premiums and his demand is going straight up. He in turn is passing some of his rewards down to the feeder to the tune of $210/head and that works out to about $15.00/cwt on a fat steer. Subsequently, the feeder is also willing to pass some of his bonus money down to the producer in order to get them to keep their cattle natural. 


Here’s an example of what happened last year on one lot of naturals. Keep in mind we sold several lots into this program but this lot was fed separately hence we have records on them all the way to the processing floor. First, these cattle sold for about $5.00/cwt over the market. Second, they were 2-V cattle and got a $2.00/cwt premium after the sale. Those premiums added up to $42.00/head right here before the cattle left our market. This particular lot was one load of heifers weighing a little over 600 pounds and were processed last week. While we don’t have all the records in, we do know they brought $143 fat in a market where the average fat cattle are bringing $128. That’s a huge premium at the end and that’s why the feeder was willing to share some of his $210/head in bonus money right here at sale time to the tune of $42.00/head. What was also off the charts was the heifers end weight was 1321 pounds and they graded 47% prime 53% choice. The preliminary figures show they could have had less days on feed and that might have made them feed cheaper but we don’t have the feed cost yet. Last but not least the heifers were all sired by Topline Leachman high $ PROFIT BULLS. We have and continue to talk about these bulls for the past eight years and the real value in the word $ PROFIT.  When you balance all the EPD’s in a computer and spit out a real $ value for the bull you’re about to buy you can predict what the calves will do and know you’re on the right track before you even get him home.  The kicker here is cow size. We think these heifers could have been marketed at 1250 pounds when most want to make them weigh 1400 plus pounds. The cow size in this heard is coming down and their offspring are finishing at lighter weights and still off the charts for quality.

We take no credit for producing the most worldwide futuristic bulls on the market. That’s right Lee Leachman, Zech Browning, and Mike Browning have been and continue to be the producers of these amazing bulls. Lee is one of the principal creators of the word $ PROFIT and the complicated formula that spits out the real value on the bull you buy. Bull selection by $ PROFIT is by far the most advanced, most efficient, bull selection tool ever in bull buying. A bull is going to be in your herd for four to five years and it’s only smart to know just what he’s worth to you. In today’s production cycle its thirty months out before you know how any other bull you buy is going to produce. It’s going to be three years before you know if it was a mistake to buy a bull that has no $ PROFIT number.  When you buy a Topline Leachman bull with a $ PROFIT number you know immediately how he is going to produce. They will produce calves that eat less and gain more. They will produce heifers that help to bring down cow size and produce calves with the best carcass and weaning weights on the market.


So the final story is this. We are more than a place to sell cattle, pigs, sheep, and goats. We study new and developing markets in an effort to add value to the cattle you produce beyond the normal market. It’s an extra service we provide at no charge. Now we developed a way for those that do all of the vaccinations to get their money back in our new 2-V program. We also have researched the bulls we sell and they are the very leaders in moving your cattle herd to the leading edge of efficiency and quality production. Everyone I know wants to know as much as they can about the cattle they produce. We get asked continually, “how did my cattle preform?” As these new feeding programs develop the consumer is demanding more information and were prepared to share it with them.


Have a great week,

Jim Warren         

831-320-3698

 

 

On Tuesday March 19th, we will have one hundred 450 pound steers/heifers that will be thin fleshed, weaned, double vaccinated and sired by Topline Leachman bulls for sale.