December 7, 2021 | Vol. 14 : No. 11
He shared the bad news first, and it’s all about the higher cost of doing business. According to CattleFax Market Analyst Patrick Linnell, the United States is transitioning into “a prolonged period of inflation.” Interest rates will climb higher, at least by the second half of next year. Energy prices are likely to remain high. Prices for corn and other grains are high. Because of drought, hay prices are high.
We are always in search of the perfect cow that will earn us the most profit. The problem is not everyone agrees on what is better.
Seedstock producers are always willing to sell us a better bull. The real question is: Is he better for you?
Commercial cattlemen are striving to produce a better calf. The dilemma is we tend to look at “better” from our perspective, but better is ultimately defined by the buyer.
Some people say the cattle marketing system is broken. Not Derrell Peel. The Oklahoma State University Extension livestock marketing specialist talked about cattle and beef markets during the Range Beef Cow Symposium hosted Nov. 16-17 in Rapid City, S.D. Peel admitted that the beef supply chain has suffered through the cumulative effects of multiple “black swan” events — events that were unexpected and could not have been predicted. Through it all, he insisted, the markets worked.
Growth happens in small increments. When it comes to measuring success for Certified Angus Beef, it’s measured 1 pound (lb.) at a time. The second-highest sales year on record, global sales totaled 1.215 billion lb. to end fiscal year 2021. Up 3.4%, or 40 million lb., from 2020, this is the sixth consecutive year the brand surpassed 1 billion lb. of sales across 54 countries.
Great partnerships don’t just happen. They take some work and effort. Just like working cattle, it takes time to know who can sort, who’s on the gate and who can write down the data best. Working together and helping each other is not just the cowboy way, it’s the farmer and rancher way from coast to coast. Working together to market your feeder calves for the most money on sale day is the AngusLinkSM way.
The CME futures market appears to be providing some incentives for producers to deliver cattle at later dates. While the incentives to retain cattle and put on additional weight appear to be present this year in some locations, producers must calculate their operation's value and cost of gain to determine if it is a correct decision. Using some form of risk management could be appropriate given the assumptions about volatility and price certainty.
