artwork of cowboy riding market vectorbomb-ThinkstockPhotos
Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer.

More advantages from sell-buy marketing

Lightweight calves went high this week, potentially killing their profit margins. Other classes also saw values of gain shrink.

One advantage of learning to think in sell-buy mode is that it really helps one to see the value relationships in things; not just in cattle.

Lately the hay market has some wide overvalued and undervalued relationships. For example, small squares tend to bring more due to the horse market. When I compare the price per pound for a square bale to the price per pound for a round bale the spread is wider than I’ve seen it in quite some time. This offers several opportunities. One could sell a ton of squares and buy back a ton of rounds and have money in the pocket and still the same amount of feed. Or one could unroll the round, square bale it back up and resell the squares. This would be adding value to that hay. Even with a percentage of loss it still pays well.

When we learn to think sell-buy we begin to notice these kinds of things all around us. It gives us a higher level of awareness, and ability to spot opportunities while they are currently happening. Preventing us from kicking ourselves later saying “I should’ve bought that.”

It can also prevent you from kicking yourself for buying something. This week light cattle took a $3-15 jump at some auctions. This made the value of gain we have been enjoying disappear. While some people were more than eager to plow into them at those prices, some us knew the best thing to do was go home with an empty trailer, or at least wait it out until those guys left the sale.

At some auctions the heavier feeders were a little lower, hurting the value of gain even more. The rollback between light steers and heifers remained wide this week. It also widened a bit on the heavier weights, eroding away at the value of gain I pointed out last week. Heifers still have a slight edge over steers though.

Where feeder heifers really shine is when compared to fats. With a $124 fat market the girls are the only profitable buy-back, and the profit margin is a bit thin. Auctions are starting their steer brothers way past the stop sign.

This week unweaned cattle were $5-13 back. Fleshy calves were $4-10 back. Lightweight feeder bulls were $20 back, and heavier feeder bulls were $35 back. Replacement quality heifers caught a $4-8 dollar premium.

When comparing southern markets to plains markets heifers were the only thing undervalued after figuring in freight and commission.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish