OldDog/NewTricks
Well-known member
Market Review - From <[email protected]>
Getting good information on the market, so you can make good business decisions when it comes time to market your cattle, helps to maximize time to your income for the year. I have been asked to speak on Animal ID at a lot of cattlemen's association meetings for the last two years. The one thing I rarely hear discussed is the market and how the members use the market information to their best advantage.
This report has attempted to do just that and we plan to put more emphasis on that part of our business in the future. So here goes:
Remember last fall we talked about corn and how short supplies were? We anticipated higher corn prices and lower feeder cattle prices and that is just what we got! The anticipation of a large number of ethanol plants coming on line in 2007 would increase corn usage. The short carry over supply at years end would indicate a higher market as we move into the 4th quarter of last year. So the funds jumped into the market and corn shot straight up. Where do we go from here?
While high priced corn was our enemy last fall it should be long term friendly to the market. Fewer cattle placed on feed and feeding those cattle to lighter processing weights sets the stage for smaller supplies at the super market.
Demand is another key ingredient in this new cycle we are entering. As we move into spring, demand usually picks up. We are on the verge of some very expansive exports that could also fuel the market. The one important lesson to put in your marketing plan for 2007 is; do not forward-contract in an up market! Do not let anyone talk you into video sales, internet or other forms of forward-contracts. Wait to sell your cattle on the day they are ready even if you don't sell at a livestock market, wait until the cattle are ready to sell.
This year is shaping up to be a full market well into the summer and that is good news to everyone in this business.
Don't be surprised if fat cattle sell for over $1.00 in the next 30-45 days.
This week's sale was still light; with 276 head, the market is steady to higher. Grass cattle could move higher with more rain but everyone I know is holding their breath. So where do we go from here? First, corn is an important part of our market analysis. I feel because the market was fueled by fund buying the farmers will plant corn wall to wall this year, and because in the ethanol process the bulk of the corn still remains as cattle feed. We can expect the corn market to drop back to the $3.00 level.
Drought in the mid-west could change the picture drastically; however it won't affect our market this spring.
The prospects for lower priced corn, lighter carcass weights on fat cattle and increased demand as we move towards summer makes the market a pretty bright picture in my estimation.
We have reported cattle that are aged, sourced, and EID tagged will sell for between $5.00 - $12.00/cwt more than cattle that are not. That statement has prompt some questions I will attempt to answer.
First, what do we mean by age, source and EID? In order to qualify your cattle under our new marketing program, an agent from 101 Livestock will register you into our program. This involves being able to document when your first calf was born, the physical location of the ranch, and the calves must have electronic EID tags in their ears. These programs require choice cattle from English background. They can show some exotic influence but plainer cattle with lots of ear or Holstein crosses do not fit. Basically, all producers need to do is put the electronic tag in your calves ear costing you $2.25 and we keep all the records and transfer age and source to the buyers under our new QSA program. Now, lets' talk dollars and cents. If you are selling quality cattle weighing 700#'s that are registered under our program, the premiums we have seen for those cattle were at least $5.00/cwt or $35.00/head. Some cattle that have been in the program for a couple of years and preformed well for the buyers brought as much as $12.00/cst premium. Most of these cattle registered for age and source are headed to the export market. Exports have been and will continue to be one of the most lucrative markets we are making available to our customers through our new QSA program. The best part of our program is you don't need to have 400 head to qualify. Smaller producers can take advantage of our export market as long as you are registered under our QSA program. We have the computer technology, electronic readers, and staff to make this program available to all producers with quality cattle. If you have any questions about our programs, don't hesitate to call us any time.
101 Livestock Market is pleased to announce Tina Baxley as our new customer representative on the Central Coast . Tina will also be providing a receiving station at her ranch in San Miguel. Tina will be working closely with our office and Mike Johnson in arranging transportation for your cattle on a weekly basis. Advanced notice on the cattle you plan to ship will help us keep shipping expense down for everyone. Tina will also be registering customers under our new QSA program for 2007. Tina is a hard worker who understands livestock marketing, producer needs, and the value of being on the leading edge of new markets. We are proud to have Tina on our team and we will be working close together to keep you abreast of the market and provide quality service to everyone!
Jim Waren
http://www.101livestock.com
Getting good information on the market, so you can make good business decisions when it comes time to market your cattle, helps to maximize time to your income for the year. I have been asked to speak on Animal ID at a lot of cattlemen's association meetings for the last two years. The one thing I rarely hear discussed is the market and how the members use the market information to their best advantage.
This report has attempted to do just that and we plan to put more emphasis on that part of our business in the future. So here goes:
Remember last fall we talked about corn and how short supplies were? We anticipated higher corn prices and lower feeder cattle prices and that is just what we got! The anticipation of a large number of ethanol plants coming on line in 2007 would increase corn usage. The short carry over supply at years end would indicate a higher market as we move into the 4th quarter of last year. So the funds jumped into the market and corn shot straight up. Where do we go from here?
While high priced corn was our enemy last fall it should be long term friendly to the market. Fewer cattle placed on feed and feeding those cattle to lighter processing weights sets the stage for smaller supplies at the super market.
Demand is another key ingredient in this new cycle we are entering. As we move into spring, demand usually picks up. We are on the verge of some very expansive exports that could also fuel the market. The one important lesson to put in your marketing plan for 2007 is; do not forward-contract in an up market! Do not let anyone talk you into video sales, internet or other forms of forward-contracts. Wait to sell your cattle on the day they are ready even if you don't sell at a livestock market, wait until the cattle are ready to sell.
This year is shaping up to be a full market well into the summer and that is good news to everyone in this business.
Don't be surprised if fat cattle sell for over $1.00 in the next 30-45 days.
This week's sale was still light; with 276 head, the market is steady to higher. Grass cattle could move higher with more rain but everyone I know is holding their breath. So where do we go from here? First, corn is an important part of our market analysis. I feel because the market was fueled by fund buying the farmers will plant corn wall to wall this year, and because in the ethanol process the bulk of the corn still remains as cattle feed. We can expect the corn market to drop back to the $3.00 level.
Drought in the mid-west could change the picture drastically; however it won't affect our market this spring.
The prospects for lower priced corn, lighter carcass weights on fat cattle and increased demand as we move towards summer makes the market a pretty bright picture in my estimation.
We have reported cattle that are aged, sourced, and EID tagged will sell for between $5.00 - $12.00/cwt more than cattle that are not. That statement has prompt some questions I will attempt to answer.
First, what do we mean by age, source and EID? In order to qualify your cattle under our new marketing program, an agent from 101 Livestock will register you into our program. This involves being able to document when your first calf was born, the physical location of the ranch, and the calves must have electronic EID tags in their ears. These programs require choice cattle from English background. They can show some exotic influence but plainer cattle with lots of ear or Holstein crosses do not fit. Basically, all producers need to do is put the electronic tag in your calves ear costing you $2.25 and we keep all the records and transfer age and source to the buyers under our new QSA program. Now, lets' talk dollars and cents. If you are selling quality cattle weighing 700#'s that are registered under our program, the premiums we have seen for those cattle were at least $5.00/cwt or $35.00/head. Some cattle that have been in the program for a couple of years and preformed well for the buyers brought as much as $12.00/cst premium. Most of these cattle registered for age and source are headed to the export market. Exports have been and will continue to be one of the most lucrative markets we are making available to our customers through our new QSA program. The best part of our program is you don't need to have 400 head to qualify. Smaller producers can take advantage of our export market as long as you are registered under our QSA program. We have the computer technology, electronic readers, and staff to make this program available to all producers with quality cattle. If you have any questions about our programs, don't hesitate to call us any time.
101 Livestock Market is pleased to announce Tina Baxley as our new customer representative on the Central Coast . Tina will also be providing a receiving station at her ranch in San Miguel. Tina will be working closely with our office and Mike Johnson in arranging transportation for your cattle on a weekly basis. Advanced notice on the cattle you plan to ship will help us keep shipping expense down for everyone. Tina will also be registering customers under our new QSA program for 2007. Tina is a hard worker who understands livestock marketing, producer needs, and the value of being on the leading edge of new markets. We are proud to have Tina on our team and we will be working close together to keep you abreast of the market and provide quality service to everyone!
Jim Waren
http://www.101livestock.com
