Livestock: What’s Your Plan in Uncertain Times?
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Folks, I wish I could wave a magic wand and tell you exactly how the markets and livestock industry are going to respond to COVID-19. Truth of the matter is, its new to everyone. To tell you that by “x” date everything will be back to normal and markets will have leveled would be a lie, and I try not to do that. However, there are a few things developing that I think we need to pay attention to.
First off, if have visited the grocery store lately you will notice that ground beef is an extremely hot commodity right now. Demand is high and supply is not necessarily meeting it. Our thoughts should be, how do we capitalize on one of the few positive trends in any market right now?
The largest percent of ground beef is coming from older cull cows and bulls. We have watched a significant increase in cull cow and cull bull prices at the local market over the last couple of weeks, while also seeing a decrease in young 6-8 weight calves. Historically in a cow/calf operation the money to be made is by preconditioning calves and selling them at the 600-800-pound range. While I still think steers should be sold right now at that range, we may want to take a step back and see if selling feeder heifers right now is the smartest decision. If cull cows are one of our highest revenue items being sold, it may make more sense to keep more replacements heifers than usual and then work on culling older/lower performing mature cows that should have probably left a while ago. Not only do I think this mindset would allow us to capitalize on a high market, but also help improve on quality, and decrease the age, of our cow herd.
The other piece of advice I have for these times is to simply stay the course. I understand that these are trying and uncertain times, but this too shall pass. Eventually COVID-19 will be over and we will try to establish “normal” again. The population is still going to demand protein, and I think more than ever it will be crucial to still supply a product. If you have plans to spread fertilizer, spread it. If you have plans to create a more intense rotational grazing system, do it. If you have plans to renovate a pasture, plant it. If we study any trend through any market, whether that be wall street stock or livestock, staying constant has always paid off in the long haul. COVID-19 will come to an end and having a sustainable program through it will pay off.
Stay safe and keep up the good work, and if anyone has any questions or thoughts on ideas through this time, please reach out to me.