October Cattle Feeding Projections
October sure seems to be agreeable with the rollercoaster that 2020 has us on. From a nice fall to winter in the heartland, many of us are still trying to either finish up harvest or need to get bedding bales off the field yet. Looking at the weather forecast it seems like once we get past the next ten days the more agreeable fall weather will return.
Hopefully coming into the next month we can say the same thing with the cattle markets. I know it is repeatedly stated, but this is an era of volatility we have never witnessed before. For every day we see the live board surge, the next two days take it back. Between trying to understand what the live board is telling us to do and what the packers are bidding, it seems there is no cognitive agreement between the two. We continue to see larger carcasses which continues to put pressure on price. Unless we come up with more shackle space or reduce inventory numbers, we will continue in this pattern.
Its hard to look at this month’s projections and not discuss politics. A seeming surge in export of crops has put increased pressure on cattle cost of gains (COG), moving some up over $1.00/lb. It seems everyone is speculating on what will be coming ahead in terms of U.S. leadership and foreign business relationships. Looking at the futures market, our typical spring rally hasn’t occurred based on the boards trade and may be slow to come pending the election outcome and inventory of heavy cattle still coming to market. If you like to speculate and bet on the uptick, looking at your break-evens will allow you to determine if you will have sold your feed through the cattle at a breakeven or for profit. Based on the number of cattle still moving, it seems many are waiting on this spring rally. Depending on which party takes over administration, we may be in for a rocky start if protein consumption does become a topic in Congress.
It’s important to remember in this time to continue to do the best you can and control the aspects of your operation that you can. From family relationships, to finishing harvest with a positive attitude, to starting cattle with attention to detail; all of this will help keep you in a forward moving, positive direction. Within the next month a lot of uncertainties will shake out. Here’s to a healthy finish to 2020’s harvest and healthy calves coming into the feed yard.