This was an interesting week. I wish I had a dime for every time the word “wow” went through my mind. The guys that were busy eating popcorn in the past are now bidding like crazy. Some markets were sharply higher across all weights and classes, while others were mixed.
There has been a lot of information in the news lately. There is swine fever in China and now we are getting estimates of how many cattle were lost in Nebraska and South Dakota due to the storm. This kind of news leads one to think there will be a protein shortage in the future and brings out the bullishness in buyers.
The value of gain once again drops off sharply on cattle weighing over 650 pounds. In a recent post I mentioned how one could use geographical spreads to buy heaver cattle for less dollars per head. This week you could do it in the same sale barn if you sold six-weights. If you were to factor in a geographical spread you could easily get paid over $50 head to take home over 75 pounds! Four-weights continue to be undervalued, with the highest value of gain by far.
Even though fats lost $3 this week, opportunity to profit is still present in the market. With the heavier feeders being undervalued to both fats and stockers, it’s a ripe opportunity to buy back.
Most people do not like this kind of market volatility, but to the skilled cattle marketer this kind of environment is friendly. We can’t control trade, weather or market direction. We can control when to stop bidding on cattle. Twice this week I was at sales that were selling too high, so I ate popcorn and went home with an empty trailer. Sometimes that’s the smartest thing one can do. But by being patient, and ending up in the right place I was able to put together a nice group.
I saw quite a few fancy replacement heifers in the offerings this week, and they fetched a $10 premium.