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Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer.

Cattle markets continue strange behaviors

This week cow prices varied greatly, value of gain jumped around, geography mattered a lot, and rain boosted forage production for some folks.

We have already seen some strange things this year, and this week did not disappoint if you like strange, unexplainable things. I’m still talking about the markets here and not the other stuff going on in the world.

With all the chaos in the world right now it’s nice to know there is one thing we can control, our decision to sell and buy.

We have gotten some rains in my local area. This has helped give a little boost to the local markets for turn-out ready cattle. Pairs in my area were extremely overvalued here this week, compared to bred cows. The strange thing is that as the female sale went along, the prices paid were up and down. For example, pairs that had the same size cows and came off the same farm could have a $500 difference in sale price. The difference between the pairs was the size of the calf. The cheaper pairs had a calf at side that was 250 pounds heavier.

Getting back to the bred cows and comparing them to the pairs, it was clear that there wasn’t really anyone in the seats that day who wanted to calve out cows. Except one guy; he got some good buys and I’m sure will capture some big appreciation value if he resells them as fall pairs later this year.

In the feeder markets the value of gain (VOG) yo-yo continued this week. The VOG remains profitable on cattle up to the 600-pound range, then from there it varies. To do a good job marketing we need to be paying attention to price slides and VOG to be sure we are not giving away our feed and time by putting weight on cattle. Some weights of cattle have 2-cent slide and some are around 15 cents. Some of the heavy feeders are bringing nearly the same bid price as fat cattle. This makes them a good buy for replacing fats, even though they took a little off the fat market this week.

The geographical spreads expanded this week. The money saved on the buy will make it well worth paying a little in freight to get them home. One thing I don’t think I’ve mentioned on this blog is the importance of a network. With spreads like we saw this week it’s so important to have that network of people to call and see what the market is doing in different areas. This network can help make you some good money.

This week unweaned cattle were $6-12 back, feeder bulls were $20 back, replacement quality heifers caught a $10 dollar premium. Also this week I saw a good amount of non-hormone-treated cattle sell and they caught a $5-10 premium.

The last couple weeks I’ve mentioned managing grass and investing in our knowledge base. The recent rains in my area have definitely made differing management styles pop. Some people are now seeing their pastures really come on with an abundance of grass, while others are seeing their pastures decline. Buying or renting a pasture is a big investment. Soit leaves me scratching my head over why people don’t take better care of it. With the guidance of some grazing gurus, some people have doubled their carrying capacity. To put it in their words it’s like doubling the size of your ranch on the same acres.

There are many positives to this kind of outcome, but my focus here is on marketing and taking care of the inventory triangle of livestock, feed and money. If you could double your carrying capacity what would that do to your cost to keep on a cow? Or on the cost of gain on stockers? Securing a feed base like this puts such a strong foundation on that inventory triangle. I write on in this blog all the time about adding value to cattle. Better grazing management can add some value to the ranch.

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

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