Beef - whats going on?

As stated in my about me here in my about me, I do farm part time. I have a small cow / calf herd, have since the early 1980’s with a few years while building my house without.

So the cattle market is of particular interest to me.

I like working with my cattle. It gets me out of the house, does not let me set in a recliner and take my health and put it down the drain. It requires me to do something everyday, no matter how I feel I always feel better after doing chores. I have watched too many retire and in 3-5 years they can barely get out of their chair.

The older you get the more important it is to get up and MOVE, physically and mentally you have to have a reason to get up in the morning a reason you like, a reason the requires YOU. Farming and ranching is one such endeavor.

Auction ring

While my day job keeps me out of the auction barn - that’s a good thing otherwise I could waste a lot of time and money as I love the action at auction barns. I do go from time to time.

Last summer my son and I went to one together for the first time in 20 years. He was around 7 last time we went. It gave us a chance to eat a good auction barn hamburger after unloading our sale cows, and a father son time that we both learned something and hopefully he will remember and pass on to his children.

Once done eating we went to the barn to watch the auction. If you have never been to one it is a experience like no other. The auctioneers chant - oh its not one of those ones you see on tv that is honestly painful to watch. It fast, furious and until you get into his rhythm you really have to pay attention. Then you have the whole disconnect between lbs and hundred weights and the sell price. $3.25 $3.25 is the chant but when the board shows the sell price it in hundred weights or fractions there of. The board will show say a 527 lb animal sold for $3.25 no instructions tell you to take the 3.25 x527. So you have to keep that in mind, doing the math as quickly as the auctioneer is chanting. It may be confusing and overwhelming until you figure it out or have someone explain it to you.

When I first started buying stockers within a few months I could look at the animal in the ring and guess the weight with in 25-40 lbs. You just get a feel and an eye for it.

One of the more memorable auction barns that is no longer around is the Omaha Stockyards. It was an amazing place, acres and acres of pens as far as you could see. Trucks and trailers lined up loading and unloading. The Omaha yards were on a rail head so cattle from all over the country would come in by rail.

I was more of a bottom feeder at the Omaha yards. They would bring 40 head into the ring and invariably the buyers would boot one or two out because they did not conform to their standards. Those throw outs could be bought for .50 on the dollar or less some times. I would take those cattle and feed them out and either sell them private contract as sides of freezer beef or run them back to the stock yards as fats. It was very profitable. They were not sickly they were either born at the end of calving season or just smaller in general. Either way the other big buyers did not want them.

The Omaha yards closed decades ago, I was really sorry to see such a storied past just disappear. My grandfathers, dad and his brother sold cattle at the Omaha yards in the hay days of the 1950’s. I even used their brokers when selling cattle in Omaha.

Omaha Stockyards

I also attend two other smaller stock yards / auction barns. Wahoo and West Point Nebraska., mostly Wahoo because its closer. West Point is a larger barn and it moves at lightning speed vs Wahoo being smaller and the auction moves slower.

One no longer has to go to the barn to bid or see the auction.

https://www.dvauction.com/

has auction barns from around the country broadcast live. While not nearly as exciting or informative as going to the barn it does work for today’s busy lifestyle. I always enjoy going to the barn and talking to the old timers - guess at 64 I’Mone of them guys now. You get to talk to others, get their perspective and input on not only the cattle, the markets but the politics and various other farming related topics.

I usually listen to the Wahoo auction on Fridays - my work hearing protection hooks up via bluetooth to my phone.

Now to get to my original intent for this stack: What’s going on with the beef market?

Couple of things.

Drought:

In my area we are heading into year 5 of a drought. It has NEVER been this dry here in my lifetime. Pastures have been short I started feeding hay the 1st of August and feed some in July to let my pastures get a rest. Hay is crazy at 150 to 200 per 1500 lb round bale. So its virtually impossible - even at these prices to make money.

The weather in general: We had a cold snap with snow in late January 2024. Wind chills -40 and greater for a couple of days. Keep in mind I’m not complaining, I like cold so no problem for me. My son and I spent 4-6 hours outside getting equipment started - diesels do not like these cold temps the fuel just does not flow well - moving hay and snow. Who needs those headaches? Most would rather set inside and do anything but go outside - If you have stock that is not an option.

Just some random pictures of farm work feeding cattle

Our younger people have been well trained to stay in with weather like that. If their is even talk of a sciff of snow they were told not to go to school. When I was growing up it was just another school day - get up and get ready and walk.

Age:

Many of us ranchers are getting up in the years. Many of us are in our mid to late 60’s and 70’s. While I am fortunately a young 64 it does take its toll on many. These are 1500 lb animals or more, they must be handled - through chutes, headgates etcetera. That means getting in the pens with them - they can turn on a dime and you have to be quick to get out of the way. Well if you’re not in your 60’s you have no idea how not quick you are vs those cattle. This spring my son and I were loading cattle, one cow decided she did not like the idea of a trailer so back in to the gate pushing me backwards until I got my footing and then she decided up over the gate was a better idea. Well she came down on the gate, tipped it over onto my son - fortunately he was not hurt, we run her back around the chutes and this time she loaded up. That gate however is in a pile of iron.
Is it any wonder younger people do not want to do this? Who wants to be permanently maimed or worse for the few sheckles take home after all this? Young people just are not taking us older guys places. Their are far easier ways to make money - real money not just a few bucks.

Start up:

The cost are huge. Around here you can run a pair ( cow and calf) on 3 acres, at 15,000 per acre to buy land it does not take a mathematics major to see the cost can be pretty steep

Then buying the herd. Pairs run $3000-$5000.

So if you’re starting it would take 80 acres to run 25 pairs. 80x$15000 = $1,200,000 Cattle 25 pairs - @ $3000 = $75,000 so around $1,275,000 and that does not include any fencing or chutes if that has to be done. You will need a tractor and loader so another $5000 to $10,000 if you buy a open station older tractor. If you want a newer one with a cab and all the bells and whistles ( those are nice but come at a cost) you’re looking at $20,000. - $60,000+. So what 20 year old has 1.3 million plus or is able to get loans of this magnitude? and if they do are the interested in the risk involved? the long days and nights 24/7/365?

None of the above includes property taxes, truck, trailer, housing for you and your family or other day to day expenses.

Putting it all together:

Many of us older guys are just selling out - whole herd liquidation. At these prices you have to consider it. How much more chance of injury are you willing to take at this age? With the drought it makes a difficult decision easier - you either sell or buy expensive hay.

The result?

the smallest cattle herd since the early 1960’s or late 1950’s.

Who knows when the government again pulls the rug out from under us by letting foreign cattle in. A recent decision by the Biden administration was going to let Paraguan beef into the USA. Paraguay has a foot and mouth disease problem. Never mind that though, who cares if that comes to the USA? I mean why not destroy our herd further and force even more ranchers out? at 0.05 % of US beef imports it may seem like without the hoof and mouth issue its such a small amount what difference can it make? Well if we study markets we know that if their is a shortage of say gasoline by lets just say 1% what happens to the price? In the market if their are bidders who ever need that last gallon is willing to pay a hefty price for that last gallon. If their is a over supply what happens to the price. Well it it sets around sooner or later the guy with that extra gallon is going to unload it. All markets work the same. Fortunately Congress stepped in and banned these imports. Still their are other countries importing beef, for the most part that is grind - hamburger - product. Few countries can produce the steaks of quality we can here in the states.

At the same time many of these countries allow feed and drugs that are not allowed here. Do you now what you are eating?

In closing I keep up with the cattle market even though I’m not a huge operator. AS you will see if you read my stack I like details and information. Below is a link I listen to daily Its short but Corbitt packs a punch of information in the 10-15 minutes of his podcast. See link below.

https://www.nationalbeefwire.com/channels/3-feeder-flash

Today’s FeederFlash 03/27/2024 lays out very clearly the cattle market. This stack was written last night and I left it overnight to proof it. So this FeederFlash pretty much confirms the above.

PS: If you ever get a chance go to a auction barn, you can roam the alleys if you wish, I usually do - but if you’re not familiar with cattle I would not do that as injury is always a possibility and getting in with a bull could result in a very bad day for you - no worries for him though. Go have lunch at the cafe if they have one, its all about the atmosphere and a new experience.

I also cover some other problems being created by the BIG 4 packers and their cohorts in government here.

Thank you for reading

Martin