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

Fluctuating markets favor wise marketing

Changes in value of gain this week between weight classes offered opportunities for those prepared.

It’s been said that every sale has a story. As the week went on, the story changed in the markets.

The funny thing was that theme carried through into this blog post. I had this week’s post all typed out and then I had computer issues. The problem was due to wifi since I’m on the road. I took a shot and asked a guy that looked like a geek for help. He got me up and running and politely asked what my work was. I told him this was for a cattle marketing blog. He made a comment that it’s extremely difficult to make a living with cattle. Turns out he grew up on a ranch.

That lead me to rewrite the introduction for this post. In the cattle biz we have two things going for us:

1. Cattle replicate themselves.

2. Cattle put on weight.

With the proper knowledge and skill set we can harness these two traits and use them to make a profit. The problem is, most people do not have an awareness of how to utilize the two characteristics. There are some really good schools that teach the skills and knowledge required to utilize them. I am not sure how many people are aware of them or are willing to invest in themselves to attend.

I have heard cattlemen discuss competitive advantage multiple times. The number one competitive advantage any cattle producer can possess is marketing skill. This was proven out today with the guy that helped me. He had no interest in returning to the ranch because he lacked the awareness of how to profit. People who do have this awareness oftentimes find themselves blessed in many ways in addition to monetarily.

At auctions across the country fly-weight cattle were undervalued all week. Four-weights have the highest value of gain. At the beginning of the week the value of gain was lowest between 500 and 600 pounds. Cattle weighing 700 to 900 pounds had a very respectable value of gain. Then mid-week that changed. The five- to six-weight cattle had a high value of gain, and cattle weighing over 800 pounds saw their value of gain drop off sharply. The overvalued and undervalued relationships changed during the week. The skilled marketer could easily respond to this change on the fly and capitalize.

Unweaned cattle were $12-15 back and bulls remained at $20 back once again. Southern markets are greatly undervalued compared to plains markets.

I did not see enough breeding females in the offerings to establish a price relationship curve.

 

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