These prices are GREAT, but for how long?
Updated: Aug 21
NOT TO BE A DEBBIE DOWNER (with apologies to all the actual Debbies out there)
BUT..... as the chart shows the last time we had a major herd reduction the high prices didn't last. So, 2011 was followed by sweet prices - for a couple of years.
This isn't then in many ways: It's entirely possible that this continues for a while. That was a "fairly localized" drought that really hit Texas and decimated the cow herd. This drought was spread over a much larger area and so the impacts were even more severe.
We're still a ways out, but there are indications that heifer retention is up slightly this month(1) and there will come a time when either demand drops or the #cowcalf sector expands enough that supply will be abundant again. At that point you'll be anxious for every penny of #cattlepremiums you can get. There is a lot of proof that in down markets the demand for "program cattle" gives you an edge and can buffer the effect of generally lower prices.
Speaking of premiums.....did you see that Oregon sale where the Moore ranch got $4.00 per pound for their #PVP cattle? So, those mid-four weights brought something in the order of $1,800. We posted about them a week ago. You can check that out here for more detail and a link to both the market report and the lot details. #ValueAddedPremiums
The keys are good markets for sure, but it's the Value Added Program premiums that pushed them to the top. Several of our clients in the west have been watching markets this past week in anticipation of listing their calves and they've reported that calves with NHTC and Legacy Natural certifications are bringing $100 - $150/head more than similar, non-certified calves.
SO, get it in gear! You're probably doing almost, if not all, of the things you have to do in order to get that extra hundred bucks per head! If you wonder what you do need to do, click here to walk through the basic requirements in about one minute. If you'd like to get a personalized analysis of the costs and benefits would be specifically for your outfit then click here or give us a call at 720-836-1618. We don't bite...
(1) Derrell Peel in Drovers