The culmination of several factors continues to push this market higher, but as mentioned in my previous column, two USDA reports only helped the contract situation for these cattle. Couple this with an increasingly tight supply—cattle are continuing to climb higher. It brings a few points to the surface for those still marketing their cattle this summer with a recap of what we saw this past week.
The most important point I can make is to keep your doors open when it comes to marketing your cattle. Marketing is such a dynamic world. There are so many available options in which a producer can choose to go that the water becomes muddy. The best way it’s been explained to me is to place yourself in the seat of your buyer and objectively ask yourself if you would buy your own cattle.
Diving slightly deeper with this idea is to think about how many programs are out there marketing the end product to consumers. Aside from the many directions the Big Four packers take their product, there are countless programs which market cattle based on genetic parameters, management protocols and so on. From those harvesting less than 10 head a week to those who market hundreds, it’s all those packers that are building the story and selling product to the consumer.
The unspoken problem this creates is when they are buying cattle, they’ve got to narrow their search and find cattle that fit their criteria and fit their marketing narrative. They are essentially adding filters to their search to narrow the pool in which they will bid on. As a producer, your goal should be to keep your cattle from being filtered out. When your cattle stay on their shopping list, you keep an interested buyer through the point of sale. Each buyer is a doorway for your cattle. Don’t close the door on someone needing your cattle. Management, verifications, genetics, value-added programs and so on create opportunities to build more relationships with potential buyers. The more doors open, the more eyes, the more value.
From a buyer’s perspective just think about what this image looks like. A set of cattle available for sale that has every available program with excellent management gives an essence of quality control. There are so many stories out there of shipping nightmares that a buyer can rest assured the shipment will go along without any problems, take those cattle on without any setbacks and they’ll fit right into their marketing strategy.
Speaking on prices specifically, a trend to take note of is the spreads that we are starting to see. Higher markets clearly give a bigger window for cattle to separate themselves. We saw more than $40/cwt differences within similar weight classes with comparable cattle. A high mark we saw was a set of reputation California steers weighing 790 pounds brought $2.90/cwt, while yearling cattle across Midwest states weighing north of 950 lbs. were bringing $2.20-2.60/cwt. What a huge value these cattle saw! But cattle similar to this were liable to bring far less. It’s nothing new for us to see, but it’s something to think about for those with inventory left to sell.
We are also seeing the huge spread from steers to heifers. Throughout the week, this gap seemed to widen. There will be ranchers that will see a $30/cwt or higher difference between their lots. As the cattle climb into higher levels, this gap will continue to separate further. As more and more cattle are sold and pen space becomes tighter with the fall run, look for buyers to become choosier, which will drive that spread even farther.
It’s been an expected fantastic run of sales so far this summer and with several more major sales coming up in the next few weeks, it will be a summer for all of us to remember! For those with cattle to sell, I adamantly encourage you all to look into value-added programs and weaning calves before shipping. It truly does make a major difference and every dollar is going to count. — LOGAN IPSEN
