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Build the next ag generation with marketing success

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Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer and BEEF magazine.
This week value of gain made big shifts, and buyers punished bawling calves.

High school football starts today in Nebraska. The head coach here told the players he expects to only play four games this season. The kids are really hanging onto that and are really hoping to get those four games in. And it’s not just football, it’s all extracurricular activities. It is really easy right now to tell who really wants to perform, and show off their talents and skills, and test their abilities.

Here’s why I think it is so important for these young people to get a chance to take the stage. At of the start of August suicide rates among teens is triple this year. I wouldn’t be surprised if this is the first time you’ve heard that, since there are so many other important topics to discuss.

A while back I wrote about the importance of banking some emotional income. It is clear that some of these young people’s emotional account balance has been overdrawn for some time. We as livestock people have the advantage of being deemed essential. The only reason auctions were shut down this year was because of poor prices, or nobody wanting to sell that week. But otherwise it’s been business as usual.

Here’s my thought, why not take your kids or grandkids to an auction and help them buy a few head of calves. Take the time to teach them proper marketing (sell-buy) so they can learn to earn some money. We’ve all seen a youngster get all excited and full of anticipation when they buy a critter, just like we’ve all seen them swell up with so much pride they pop the buttons off their shirt when they sell them. That short moment of recognition from an auctioneer and a little profit helps these young people bank some emotional income.

With that plea, I just crossed a strange bridge joining cattle marketing and mental health. But note how I said proper marketing and referred to sell-buy. If we are going to help the next generation we must teach them how to win. This week I talked to a lot of cattle buyers and none of them are feeling good right now. Every one of them was only interested in talking about what the corn looks like, COVID-19 and how much money they are losing.

If we teach these young people proper marketing so they can earn some money they will enjoy this business. That in turn will strengthen the cattle industry. There have been all kinds of programs to get young people in agriculture. Not a one teaches them how to earn money. There are only two reasons someone may sell out. First is retirement, and second is they weren’t making any money. We hear it all the time, that young people don’t want to get into ag because there’s too much hard work just to break even. Let’s teach them how to win, and make some money. That’s the only way we’ll fix this.

Shifting VOG

This week the market was mixed. With some weights going higher and some going lower it really changed price relationships and value of gain (VOG). This set up some cliffs. What that means is if one weight saw a VOG of $1.40 the next hundred pounds above it saw a VOG of 60 cents. In the heavyweight feeders we saw heavy cattle bring fewer dollars per head than a lighter animal. This was normal most of the year, but hasn’t happened for over a month now.

Flyweight cattle are popular right now. This week I saw $20 to $30 slides on them, which really erodes away at their VOG. Six- and seven-weight cattle also appear to be popular, giving their VOG a boost. So how do we have two-weights that are popular, yet one gets a boost and the other’s VOG erodes away? It’s the value of the weight in between them. The relationship between them is changing from overvalued to undervalued on heavier cattle, and the opposite is true on the flyweights. This relationship changed fast, from Monday to Thursday.

Speaking of things that changed fast was the willingness to buy bawling calves. On Monday they were $2 back on lightweights, and up to $15 back on heavier weights. By Thursday they were all $20 or more back. Feeder bulls under 600 pounds didn’t really see much discount, but over that weight it was $10 or a more. The southern markets are still undervalued.

Another thing of note is that type and condition was a big factor on price. Now that may sound like a no brainer, but just in the last couple weeks load lots were commanding more money. This week that is not so. Buyers seemed more willing to piece together loads with the right kind, rather than buy load lots that weren’t.

The opinions of this author are not necessarily those of Beef Producer or Farm Progress.

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