What can be said of the cattle market today? Some say it’s the best it has ever been. Others might be anticipating a drop, as what goes up must come down. Whatever the case, one thing remains constant – there are still cattle that need to be taken care of, and there are still ranchers that need to make a living.
So is it worth it to spend time pining over market trends? Well, it can definitely aid the operation, but one must be cautious to not base all management decisions solely on the current market.
“I’ve noticed it before, not just in this cycle,” says Kenny Burdine, extension professor in livestock economics at the University of Kentucky. “There is a tendency with some producers, when prices are high, to almost become satisfied and to be less focused on adding value when they feel like they are getting a pretty good price for their calves.”
“For example, someone might say something like ‘Bulls are bringing such good prices, I don’t think I am going to castrate’ or ‘With green calf prices this high, I am not going to wean my calves prior to sale,’” says Burdine in a previous article.
It is clear to see that as of right now, it is a producer’s market, with Superior Livestock Auction reporting a record high for feeder steers at the first of their summer video auctions (the Corn Belt Classic) with prices $8 to $15 higher across all weights. According to Joe Lichtie, vice president of Superior Livestock Auction, calves on cows were also at an increase in regions 1 and 2, bringing in $50 to $70 higher compared to the same time last year.
We can relish that fact for a moment, as those prices don’t come often. But with that it’s important to note that maintaining simple and proven operational protocols, such as castration, weaning, vaccination programs and striving for quality genetics can be essential in both good and bad market conditions.
“I encourage folks to continue to add value and try to sell the kind of cattle that the market wants, regardless of what the overall market prices are,” Burdine says.
Adding value can look different for each operation, depending on location and purpose. Ranchers should evaluate what they can and can’t afford with the resources they have. To help with this, Megan Van Emon, an associate professor and extension beef cattle specialist at Montana State University, gave some ideas and advice when it comes to adding value to the calf crop.
- Backgrounding calves
- Wean at least 45 to 60 days ahead of sale time
- Get calves bunk broke and water trough broke
- Take advantage of different markets
- Non-hormone treated programs
- NHTC-certified
- Grass-finished or grass-fed
- Consider creep-feeding if feasible
- Focus on nutrition and practices that add pounds
- Keep calves as healthy as possible
“The big one is just keeping those calves healthy,” Van Emon says. “Things that these ranchers are doing already can really help boost some income towards fall.”
Other considerations to add value and interest buyers are to provide information on the genetics of the herd, vaccination programs used and whether they are associated with a beef organization or certified program.
“Make sure they understand what you are selling and just build a reputation through your cattle and yourself,” says Lichtie, adding his advice on what producers can do. “Those are important pieces to get repeat customers.”
Due to elements such as COVID-19 and drought leading to herd liquidation, there are considerably fewer cattle in the market today. It seems the trend will continue as ranchers retain more heifers to rebuild herds, thus creating more competition and higher prices.
It can be tempting with the current market conditions and future outlook to put less into calves as fall approaches. In the short-term perspective, it can look cost-effective. However, as those in the industry know, cattle are a long-term investment. Both Burdine and Van Emon point out that someone in the supply chain is going to add value and accept that risk; they are also going to gain the premiums for doing so. If producers settle for short-term rewards, there can be missed benefits that could have contributed to long-term goals. Putting in the work to receive more profit can assist in other needs, such as investing in equipment, pasture and more cattle.
By planning for winter feeding early, managing overhead costs and continuing to do the “little things,” Burdine says it can help producers be in a good spot in the current market, while also keeping in mind future obstacles and opportunities.
“We should have some good years ahead here in the cow-calf sector,” Burdine says. “We just want to make the most of those.”
