ShayLe Stewart grew up on a diverse cow-calf operation in southern Montana, and as she told WLJ, “was blessed because my love, passion and understanding of the ag industry really seeded its roots there.” After graduating, ShayLe interned for the U.S. Cattlemen’s Association (USCA), which she says was one of the most pivotal moments in her career.
While at USCA, ShayLe began to track the cattle markets and had the opportunity to be mentored by some very insightful and knowledgeable gentlemen and women in the industry. ShayLe began writing a “tip sheet,” hoping to share insight into cattle markets with producers.
“The funny thing about the cattle market is that even though every single person who has cattle is tied to the market to one degree or another, there are very few that are actually comfortable speaking it or breaking down its terms and its mechanics and how it works,” ShayLe said.
“So that was my goal, that was my mission right when I started, to really understand that’s where my calling was in the cattle market. My hope was to bring a greater understanding to cattle producers to take the taboo out of the marketplace so they could be more empowered, and they could be more profitable.”
ShayLe always had a passion for public speaking, and with the prompting to share her information, ShayLe started the Cattle Market News Facebook page. Today, the page has nearly 21,000 followers, and she does a weekly market recap. ShayLe said it has been “nothing shy of a blessing from God.” The page led her to the position at DTN as the livestock analyst in September 2019, where she writes midday and closing livestock market comments, a column and blogs.
In addition to DTN, ShayLe and her husband, Jimmy, run a Sim-Angus operation in Cody, WY, called Big Country Genetics.
“I focus on profitability when I’m on the job, but then it’s fun for me because I’m not just a day trader, I’m not just a market analyst that clocks in from eight to five, I live it every single day,” ShayLe said.
“There are the moments that you’re sitting behind the computer and then there are the moments when you’re pushing the pen to paper and you’re making analytical business decisions on the ranch. So that’s been really fun for Jimmy and me to make changes in our operation to talk about and to really decide how we’re going to establish our legacy in moving forward.”
Big Country Genetics is a 200-head, pulmonary arterial pressure-tested operation focusing on maternal heterosis that also offers a three-year foot, leg and breeding guarantee. ShayLe said people are astonished that the business can offer a three-year guarantee, to which she replies, “How can you not offer that guarantee if you are truly after profitability in this industry? It’s pitiful that most of the seedstock industry can’t assure their customers that the bulls they buy will last three short years.” As ShayLe and Jimmy are a startup operation, they’ve been forced to focus on profitability.
ShayLe said the SimAngus breeding program is the work of Jimmy, and that is his passion and legacy. Part of the legacy is to not only breed for carcass quality, but also for the maternal side of the coin.
“Jimmy and I are extremely focused on refining the maternal side of our operation. Over the last two to potentially three decades, our industry has completely focused on growth traits—which are important—but in the process, we’ve forgotten that we can’t only seek to sell reputable calves, we must also have a profitable and sustainable cowherd,” ShayLe said.
“So that’s why we chose SimAngus, because we’re taking the important growth traits of the breed, while being determined with the cross to bring back profitability on the cow-side.”
ShayLe said with the SimAngus cross, they want to make the females sustainable and the heifers become mature females into their teen years and thrive in any environment, whether it is the lush grass of Montana, the desolate countryside of antelope in Wyoming or the fescue of the South. ShayLe said this involves females with moderate milk and growth, pushing their cows to graze more than be fed because “a day grazed is a dollar saved,” and they are right at 11 months with their herd and grazing.
Markets
With the prospect of returning to an El Niño or a typical weather pattern, ShayLe said it will affect the cattle market.
“There are two things that are essential for the cow herd to grow and rebuild,” ShayLe said. “Number one is profitability, which we have not had in our marketplace for a number of years. And number two is green grass. So while we expect 2023, 2024 and even potentially 2025 to be strong years in the marketplace, that really depends on profitability and green grass. And so like so many ranchers will tell you, you can’t count on rain until it’s in your rain gauge.”
ShayLe said the Cattle Inventory report by USDA showing fewer cattle compared to last year changes the supply and demand economics in favor of producers and feedlots.
“That finally gives cow-calf producers and feedlots the opportunity to gain leverage in the marketplace, which we’re already beginning to see,” ShayLe said. “So I’m very thankful that we’re at this point in time. I think that there’s an immense opportunity in the marketplace right now because the market is slowly building, and the writing is on the wall; the big question is just when.”
That time will come later, probably in April, ShayLe said, when feedlots will have fewer cattle to market. Until that time, the packers are “trying to put the brakes” on the cash cattle market and maintain their margins, “Because as soon as we get into the second half of 2023, they know that this market is going to be a runaway freight train with the market’s prices favoring feedlots and cow-calf producers.”
ShayLe cautions that higher cattle prices do not guarantee profitability. She mentioned several factors, such as low hay supplies, high corn prices, transportation costs, inflation and higher interest rates as raising input costs. Still, producers need to control some of those costs.
ShayLe recommends a couple of different strategies. One is to look at the feeder cattle price spread between the May 2023 and August 2023 contracts, which indicates a tighter cattle supply in the latter half of the year. ShayLe said if feed is not an issue, she encourages producers to look at the futures market to anticipate what cattle prices will be.
The second strategy is to look at the economics of the cull cow market, as it has a tremendous influence on the market and contributes 10%-30% of an operator’s income. ShayLe said producers market a large number of open cows in October, which may be a time to get creative and rebreed their cows and sell them as bred females, as there will be people looking to rebuild their inventories.
ShayLe said that bred female prices have yet to reach prices as high as she expected and theorizes it is mainly due to two years of drought and the availability of grass to feed them. This may be an excellent time to purchase bred females before the price jumps in the coming months. “Overheads are something that we have to be so conscientious about and especially when they’re depreciating overheads and getting the animal bought at the right time,” ShayLe said. “My grandpa always used the saying, ‘You make the money the day you buy, not the day you sell.’ So be conscientious of that.”
ShayLe is confident of the industry’s future, favoring producers for the next couple of years, but noted that the industry is cyclical.
“What are you going to do with that added income that is going to help you in the low years, because it’s not a matter of if they come, it’s a matter of when they come,” ShayLe said. “They are guaranteed to come, the market will get softer again, the white horse is going to ride away and we will see low prices again. How long does this good run last?
“As producers get excited about the upcoming opportunity, they also have to be conscientiously thinking about how they’re going to enter the next season, and better set themselves up to endure that time of low prices in the marketplace.” — Charles Wallace, WLJ editor
