Quality Pays Double What It Used To
Packers pay more than $3 million dollars per week to cattlemen who meet CAB standards; premiums reach record $182 million.
Is there enough high-quality beef? The market doesn’t seem to think so. A biennial survey of the four largest packers showed a dramatic increase in market rewards for the Certified Angus Beef® (CAB®) brand. Annual grid, formula and contract premiums paid on CAB carcasses in 2021 totaled $182 million, up from the 2019 record of $92 million. That’s $3.4 million per week going to producers hitting the CAB target.
The Link
Are your genetics like a Charlie Brown Christmas tree?
by Ginette Gottswiller, American Angus Association
Do you like a Charlie Brown Christmas tree? Loading down the little skinny tree lacking a good base with lights, tinsel, ornaments and other decorations doesn’t make it look that great, in my opinion. It just shows I picked the wrong tree.
It’s no different with genetics. All the programs that are out there — like natural and Global Animal Partnership — won’t make the genetics of your feeder calves better if you picked poorly from the beginning.
Holding on to Calves Through a Down Market
There are factors to consider if you want to wait for better prices.
First it was just drought. Now we have war in eastern Europe. On Feb. 15 the April contract for feeder cattle on the futures market was more than $172.55. On April 11 the same contract closed at $156.65. Live-cattle futures for April contracts are down more than $8 from their February high. Corn is up more than $1 per bushel, and wheat is up $2. The futures market jitters have given a lot of us more to worry about.
April 5, 2022 | Vol. 15 : No. 4
Embrace Market Emotions
All markets have an emotional component; use it to position yourself in the market, says CattleFax analyst.
When it comes to marketing cattle, now is the time to check your emotions at the door, make a plan and execute the plan, says Lance Zimmerman. The CattleFax analyst presented marketing tips for cow-calf producers during the American Angus Association’s Feb. 22 Angus University webinar, “Making Cents of the Market.”
Market Closeout
Reliable marketing.
The theme for this issue of the Angus Beef Bulletin EXTRA is reliable reproduction. I’m sure no one is surprised I’m not going to talk about reproduction, but I will take some time to talk about the issue of reliability. Cow-calf producers are masters of dealing with unreliability. Cattle markets and Mother Nature make us experts with dealing with uncertainty.
However, there is nothing more frustrating than putting so much effort into making a great product and feeling like you don’t have a reliable marketing program.
In the Cattle Markets
Seasonal factors.
In recent weeks, a sharp increase in fed-cattle prices early in 2022 has softened, prompting some to ask about the short-run direction for prices. Boxed-beef price, a proxy for wholesale prices, has fallen since peaking early in the year. In addition, the cost of corn has sharply and steadily increased in the past few months. These combine to negatively affect the expected profitability of finishing cattle. This has resulted in pulling some cattle forward (or quickening the market pace by feedlots). Evidence supporting this includes a slight reduction in cattle on feed for more than 120 days. Marketing sooner means more beef in the short run with downward pressure on prices, but the prospect of higher prices later in the year.
