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Heifers and female cows remain hot topic at sale barn

More sales barns are moving to a summer rotation than in prior years.

Doug Ferguson

May 17, 2024

7 Min Read
More sales barns are moving to a summer rotation than in prior years.

Cattle numbers are certainly influencing markets.  I received notices this week that some sale barns are going to a summer rotation starting next week. Some of these have never done a summer rotation.

This week there were some female specials and the trend that was taking place at these sales was broken. Females that were 8 years old and over sold below their Intrinsic Value (IV).  These older mommas were straight up ignored making them a good buy. Bred heifers also sold below their IV, they sold for much less than a producer would have in them, or to put it another way they were $700 less than nine-weight feeder heifers.

All eyes remain on the females at sales

If we were to draw a bell curve and start with a five weight heifer, we would have to draw a line going down to the bred heifer. That line would then skyrocket up to the 3- and 4-year-olds where it would hold fairly steady until the vet called a cow 8 years old, where the female market fell out of bed. The market is thumbing its nose at what some people think they know about appreciation and depreciation.  This is why we must pay attention to relationships between animals to make business decisions.

The relationship signals were different between sales in Nebraska and Missouri. While pairs had a much higher selling price, the pair to bred trade was not a good trade in Nebraska. The reason being is we would end up selling more value into the market than what we would get paid for it (I compared cows of the same age). In Missouri, it was a good trade.

Muscle score

The female market has not placed to much discount on muscle score or condition the last few months.  This week it did, making fat the prettiest color of a cow that was sold.  Muscle score and condition influenced selling price by over $400 difference between a #1 and #1 & #2s.  Thin straight up #2s were several hundred dollars back from them.  I’m usually not a fan of feeding cows but when there is a $900 difference in selling price, I can quickly change my mind.  That is part of resource management, are we adding value to our feed or devaluing it?

The feeder markets

In the feeder markets the Value of Gain (VOG) is absolutely stunning, until the cattle weigh around 600 pounds.  From there it falls out of bed. Not all is lost here, it is still possible to make some trades on cattle weighing over 600 pounds, it’s just that it is highly unlikely to replace with cattle weighing under 600.  This is where producers must know Return on the Gain (ROG) calculations. This is the ratio of dollars to pounds on a trade.  While cattle weighting over 600 pounds are under-valued strictly on a VOG basis, they are also trading over and under-valued to each other.  We will never spot opportunities unless we are trained correctly to see them and unless we are looking for them.

The heavier feeders are a good buy back against fats.

Marketing schools

If you would like to learn how to make money regardless of what the market is doing, I have some schools coming up later this year.  One in August in Idaho and two in Nebraska in November and December.

Picking up where I left off from last week, addressing the over abundance of phone calls I’ve been receiving from people that went to a different marketing school on the topic of giving up on a trade and holding on to the money.  In my schools I have built in correcting problems people were taught at other schools into my curriculum. This is one of those things. 

Best day at an auction

Since I was first introduced to sell/buy marketing I was taught that “today is the best day to buy because there is always something under-valued at an auction”.   I have seen the market prove this 6 days a week for the last 20 years without missing.  If we are going to accept the money is an undervalued idea, we then do not believe the fact that there are under-valued animals to replace with. 

Undervalued animals

The only way money is the most undervalued part of the equation is because we perceive it to be because we sold the most undervalued animals in the offering.  That sounds like an easy fix, just stop selling the most undervalued animals.  Because some people have been taught this escape hatch for failure, it has become a habit, and they routinely sell undervalued animals.  I don’t think there is any way I can communicate to you all how hard it is to get someone to stop doing this once the idea has been autosuggested into their subconscious mind.  The ideas that we consume will eventually consume us.  If we are going to be in the cattle business, why not get serious about it and make the irrevocable committed decision to be excellent at it.

With sell/buy marketing our exposure to risk is the time between the sell and the buy and we can exercise some control over this.  To just stop and hold money in the middle of a trade is crazy to me.  So many people have gotten hurt doing this, especially in the last six months.  They sold cattle, then held onto the money and during that time the market went up. They simply just let their opportunity to prosper get away. 

The inventory loss

And not only that, they also took a self-inflicted inventory valuation loss.  If they sold 100 head and waited to replace, the same dollars may only buy back 85 head. If they had executed the trade correctly, they could have sold 100 head and replaced with 100 head (sell/buy is a head for head marketing method), then when the market went up they would ride it up with 100 head inflating in value. That is a hedge. A hedge against inflation. 

Remember I wrote above that it was possible to do a sell/buy trade with cattle that have a VOG below COG and make it positively cash flow. Even if the market goes down the relationships will still exist that allow us to positively cash flow.  This is being self-hedged in the cash market.  To hedge means to lay off risk. The way to do that is with solid sell/buy skills. With this there is no need to pay any attention to Chicago or waste time and money with LRP.  Marketing skill are with us for life once we learn it and it takes a one time fee to enroll in a class.


There is a lot more I could write about the failed idea of holding on to money and giving up on a trade, and I cover it at length in my schools.  It is lost on me why people spend so much time focused on deflecting depreciation and capturing capital gains yet will tell other people to hold onto the one thing that depreciates and can’t be used as a write off.  Money depreciates, only we use a different word for it, we call it inflation.

The first time I was asked about this holding onto “undervalued money” in one of my schools I went into a bit of a rant and did an impromptu example of trading. If we take a medium of exchange, money, and we go to someone else and we give that to him for a widget. Time must pass for the widget to do its thing, whether that is replicate itself or gain weight.  We then bring the widget back into the marketplace and we double our medium of exchange. This works well so we go back to the guy we got the first widget from and buy two.  Same thing happens, we double our money.  Only this time we go back to the guy we get widgets from and only buy three and we hold on to 25 percent of our money.  We double our money again on the three widgets but the money we held in our pocket did nothing. Money is meant to be circulated in order to grow.  We must be intentional with it in order to grow it.  The thing is if we are going to be in business, the most important task we have is deploying capital.

The opinions of Doug Ferguson are not necessarily those of, or Farm Progress.

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