We are in the heart of the summer and things sure are heating up and, in the case of the cattle market, staying hot! Most national news has been covering the extreme heat being experienced over a broad area of the U.S., and if you are in those areas dealing with those challenges, I hope Mother Nature provides relief soon.
If you are involved in the cattle industry the extremely hot yearling and calf markets are a major point of discussion. Last week saw a record sale for Northern Livestock Video Auction (NLVA) in Billings, MT, for number of cattle marketed and also for prices. With 160,000 head of cattle and 18,500 head of lambs to market, this year’s “Summertime Classic” stretched to four days for the first time in NLVA history.
The record number of cattle sold was met with record demand from buyers. The auctioneers had to work some new increments into their chants this year with many lots of steers bringing over $300/cwt and even some lightweight calves selling north of $400/cwt! One highlight from the sale was a set of 350-pound steer calves out of central Montana that brought $408/cwt! The heart of the sale saw many heavy fiveweight and sixweight steers sell for October delivery. The 550-600-lb. steers fetched prices between $280-303/cwt with an average price of near $290/cwt.
Cattle in that weight range with “all the bells and whistles,”—meaning they are handled right, have all their shots and are enrolled in a value-added program—saw prices near $310/cwt! Moving up a weight class, the 600-650-lb. steers saw prices between $275-292/cwt with an average price of $284/cwt. Adding the “bells and whistles” to this weight range saw prices from $286-306 with an average price of $295/cwt. Depending on your situation, enrolling your cattle in a verification program and going through the extra effort could result in a $10/cwt premium on your calves when time comes to market them.
Looking at ways to add value to your calves at marketing time, here are a few observations from the sale. The No. 1 criterion looked at by buyers is reputation. Cattle that are represented correctly, from a longtime ranch with proven consistent performance saw strong demand and many repeat buyers.
Another factor that played into premiums is the use of quality genetics in your program. Advertising the bull battery and the criteria you use to select your bulls is important information for your buyers. If you select bulls with superior carcass qualities, growth, feed efficiency or whatever your criteria are, make sure you let your buyers know about the genetic advancements you are making in your herd.
The last factor I observed that could be the difference in a dime when it comes time to market your calves is a solid vaccinations program, and in particular, fall shots. I know that there are situations where getting a second round of shots in your calves is simply not feasible, but if this is something that you can practically implement into your herd, this can result in a $10/cwt premium over calves that only have their spring shots.
I know there has been a lot of talk about herd rebuilding. I think we are still a few years away from seeing that come to fruition; however, we did see some high-quality replacement quality females marketed this last week. One set of Red Angus replacement heifers outsold their steer mates by $22/cwt, no doubt going to be bred and create replacement heifers. There were substantially fewer heifer calves offered in this sale when compared to steers.
It was shared that there were 88,000 head of steer calves offered at the Summertime Classic versus 24,000 head of heifer calves. Like I said, I still think we are a ways out from seeing our national cowherd recover from the 3% decline from last year and being at near record levels for the smallest cowherds, but it does appear that heifers are being held back to be considered for replacements in herds.
Though these prices are historic, they are a long time coming for many ranchers. The cost of inputs and land have been so far out of line compared to the calf prices, we needed this adjustment to keep the cow-calf sector encouraged to keep producing the exceptional product that is in high demand world-wide: U.S. beef.
Also, please keep in mind your tax situation as we get closer to the end of the year. Many ranches are going to be faced with some new challenges when it comes time to file taxes for 2023, so just be aware of that and maybe meet with your accountant early to make plans. I believe we can carry this momentum into 2024 when it comes time to market calves. Hopefully at these levels we can encourage herd expansion and the next generation to jump in and keep raising cattle. — DEVIN MURNIN
