In this file:

 

         Markets may be ugly, but profits are there

Even in these markets the opportunity exists to sell cattle and buy back at a profit.

 

         Winter weather (that just wonít stop) matters to cattle markets

From a market perspective, this winter has been somewhat of a double-edged sword.

 

 

Markets may be ugly, but profits are there

Even in these markets the opportunity exists to sell cattle and buy back at a profit.

 

Doug Ferguson, Beef Producer

Mar 01, 2019

 

Once when I heard Bud Williams talk about marketing he emphasized a point that itís up the person marketing their cattle to get their share. When you sell an animal the feed guy gets his share, even if all you purchased from him was mineral. The pharmaceutical company gets their share. Same with the truck driver, the stockyard, and the list goes on. So you must market your cattle in a manner that you get your share.

 

Lately there has been wailing and gnashing of teeth in the fat-cattle market. The winter has been tough. This morning a local weather station listed the statistics for February compared with the average and itís a month cattlemen will not forget. Feeders are complaining about packers making money hand over fist and making lousy offers, which they perceive as rubbing salt in the wound of poor gains and lighter weights. A small segment of cattle feeders are pushing for feeders to unify and push back against the packers. To me this goes against all common sense. Why would an industry rally against their customer? A business only exists for one reason, to provide a service. It should make a profit to be sustainable, but it will only exist if it provides a service. If that service is not needed the business will fail.

 

So how do we get our share amid all this doom and gloom? I took a fat cattle bid of $1.25, using sell/buy marketing with a cost of gain of 95 cents on steers, and $1.07 on heifers. Then I compared that to last week's weighted average for the state of Nebraska. One could easily sell fats and replace at a profit buying seven- and eight-weight steers, and seven- through nine-weight heifers. One could also pick around the edges of four-weights. Five- and six-weights are out. I just outlined what is under-valued and over-valued whether itís a fat-to-feeder trade or a feeder-to-feeder trade.

 

King Solomon said ďin all your learning, gain understanding.Ē Learning and understanding simple basic marketing principles will allow you to thrive, even in these times. Without this understanding what you donít know can kill you, as far as your business is concerned. We donít need to fight things beyond our control, just embrace what is easily available.

 

This week was similar to last week as far as what I saw in the markets...

 

more

https://www.farmprogress.com/market-news/markets-may-be-ugly-profits-are-there

 

 

Winter weather (that just wonít stop) matters to cattle markets

From a market perspective, this winter has been somewhat of a double-edged sword.

 

Nevil Speer, BEEF Magazine

Mar 06, 2019

 

Weather, weather, weather Ė itís THE story of the past several months. It doesnít matter where you go, most everyoneís tired of winter. If you havenít been fighting cold, snow and wind, youíve been fighting rain, mud and gray. All of which made February, the shortest month on the calendar, seemingly an especially long month.

 

The influence of winter has definitely been felt by the feeding sector. Many feedyards have had their fair share of tough feeding conditions. As a result, closeouts have been challenged by reduced performance during the past 30-60 days. Thatís best evidenced by the sharp decline in slaughter weights in recent weeks (Figure 1).††††

 

From a market perspective, this winter has been somewhat of a double-edged sword. On one hand, itís added some additional support underneath the market.

 

Fed prices finished January at $123-124 per cwt. From there, the market stepped up to $125 by mid-month, added another $1 the following week and finished out the last week of business with some $128-9 trade Ė that put cattle feeders ahead of last yearís mark at this time (Figure 2). But on the other hand, wide-ranging winter conditions have also hampered commerce.†

 

Meanwhile, cattle feeders continue to be challenged by several factors when it comes to marketing leverage. First, beef production and supplies remain ample. Thatís largely the result of bigger year-over-year production heading into the holidays.†

 

Weekly beef production peaked at nearly 528 million pounds (on a moving average basis) in 2018 versus 520 million pounds in 2017 (Figure 3). As a result, beef inventories in cold storage at the end of December were running ahead of both last yearís stocks and the five-year average.

 

Meanwhile, as noted above, winterís influence also slows down beef purchases from end-users Ė boxed beef sales during the five weeks between Christmas and the end of January were behind last yearís pace by just over 260 loads. That trend finally reversed during February and helped boost the market in recent weeks.

 

Second, feedyards are still front-end loaded. Decemberís 120-day plus on-feed population totaled 3.64 M head Ė the largest December mark in the series history (Figure 4). Given the pace of marketings thus far, the official January number will also likely rival the historical record.

 

Good news on the horizon ...

 

Supply situation ...

 

more, including links, table, charts [6]†

https://www.beefmagazine.com/marketing/winter-weather-just-won-t-stop-matters-cattle-markets