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Hay shortage may be holding a lid on cattle buying, while grass fever isn't quite contagious yet.

March 8, 2019

2 Min Read

“It’s come to that?” That’s what a customer said to me this week when I priced some hay to him.

Hay auctions are hot right now. We thought they were high a few weeks ago but we were not prepared for what we saw this week. I talked with a few people I know who have some lightweight cattle in some custom yards, and of course we discussed cost of gain (COG). They shared with me the COG is getting high because of the extra bedding expense, and bedding is super expensive to buy right now. All the focus seems to be on the hay market because I didn’t hear one peep about what the corn market did this week, although I’m sure it was a topic amongst the corn farmers.

Five- and six-weight cattle have a lot of fans. This week the greatest value of gain was from 400 to 500 pounds in steers and heifers and in eight- to nine-weight steers.

I admit I am having trouble calling any kind of market direction this week. I’d go to one sale and think some weights of cattle were really over-valued to another weight class, only to go to another sale the next day and see the opposite trend between the same weight classes. It just depends on who shows up from one day the next. This kind of volatility may drive some people nuts, but to a skilled marketer it means opportunity to profit.

Most of the time when we discuss the value relationships it pertains to weight classes, but in this case one geographic area is over-valued compared with another area. By keeping an eye on the weight relationships and the relationships between areas I have been able to buy heavier cattle for less dollars per head than the ones I sold. To state it another way, the market has been paying me to take weight home.

I think the coming weeks should be interesting. Some would-be grass calf buyers seem content to just watch the sales and eat popcorn. I’m sure as we get closer to grass time and the weather begins to improve they will no longer be spectators and the dynamics will change.

On the breeding side of things we continue to see more culling. Demand and prices were steady. Pairs with 200-pound calves are only bringing slightly more than bred cows. OCV heifers are only slightly above feeder heifer price.

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