Just how strong is our economy? The Federal rate cuts have helped somewhat, but is that a short term or long term fix? Gas prices have also come down recently, and that definitely helps. Judging by the lines at restaurants, movie theaters and just about anything else not at home, the public sure thinks there is money to spend!

With interest rates this low, maybe it’s a good opportunity to buy some longer term assets. Cows come to mind. The calf market has stayed very strong, with many calves still bringing over $500.00 a head, stocker weights bringing over $600.00 and feeders bringing $700.00 to $800.00. If a good young cow costs $1300.00 and she has 8 calves that bring $500.00, that’s $4,000 to feed and care for the cow! If it costs a dollar a day to take care of her, that’s almost $3,000 for feed and care of the cow, leaving $1,000 to put in the bank. That’s 75% return on your original investment! Sure sounds better than 4% interest at the bank!

The grain market continues to be very volatile, and judging from the big swings in the market, no one is sure of which way it might go. Feed costs at the feedyards are near $100.00/cwt, with fat cattle trading somewhere either side of $90.00. At today’s prices, something may still have to give, and hopefully the price of fats will get back up to reflect the prices at the restaurants!

We have a great market considering everything! Calves are bringing about $100.00, with spring time just around the corner, and feeders and fats are bringing in the $90.00’s, what’s wrong with those kinds of prices? Just ten or twelve years ago, we were all hoping to get above $70.00 for anything! It may all depend on your point of view, but we really do have a good market!

END OF THE MONTH COW SALE NEXT TUESDAY, JANUARY 29!

EXECTING OVER 1000 HEAD OF CATTLE!

Fat cattle of course, are another thing! There doesn’t seem to be any rhyme or reason as to whether they bring $85.00 or $105.00! A steak still seems to cost as much or more as it did ten years ago, week in and week out, yet a fat steer might fluctuate as much as $100.00 in a week! How did we get ourselves into this situation?

Back in the nineties, there were weeks that as many as 400,000 fat cattle traded hands, today in might be 40,000. Contract, formula and packer owned cattle have changed the face of our fat market dramatically. Cattle used to trade every day of the week, with maybe a 50 cent change in price during the week. Nowadays, they might all trade during 15 minutes of one day with a $7.00 swing. There doesn’t seem to any fixed way to determine a price for the fats, it’s whatever the packer buyer thinks he can get away with.

Things sure have changed in the last 10 or 15 years. In 1996 we had five or six dollar corn and heifer calves were bringing in the forties! Today we have five dollar corn and heifer calves are still bringing in the nineties, with steer calves still bringing above $100.00! How can we think this is a bad market? Especially when we consider that gasoline is probably $2.00 or $3.00 a gallon higher and water is being sold by the bottle!

The wheat cattle run this year is definitely going to be a lot different too! How many remember those weeks in March when every sale barn had 5,000 to 20,000 head? The number of cattle being turned out on wheat seems to diminish every year for one reason or another. Our nation’s cow herd is several million head short of what it was a few years ago, with lots of heifers still going to the feedlots! Sheer numbers of people versus numbers of cattle will almost have to keep this market strong!

It sure looks like as long as we keep our markets open and our borders closed, we’ll have a great market for quite a while! The wheat and corn may or may not stay at these levels, but one thing is for sure, cattle will eat both of them! One niche in the economy that may be worth pursuing is that little niche of taking care of cattle on the wheat. It seems like we have more people retiring from the cattle business than getting into it. Maybe that leaves some great opportunities for someone!

OUR NEXT END OF THE MONTH COW SALE IS TUESDAY, JANUARY 29, 2008!

Over 300 black and bwf bred heifers and young cows are already consigned, along with more than a dozen registered low birth weight Angus heifer bulls! Please call ahead so that we might help you more! We really appreciate your business!

There continues to be several factors affecting the cattle market, the biggest of them being the cost of gain. With the weather in the feedlot areas staying wet and muddy, cattle are not gaining at all, in fact, carcass weights have dropped about twenty pounds in the last month! The cost of gain is fast approaching $1.00 a pound, and gas prices are certainly not helping.

With most everyone wanting to cut a wheat crop, the demand for wheat grazing is not anywhere near what it would normally be and outlets for lower priced stockers and feeders is limited. There appears to be plenty of feed in the country, although it is limited to a large number of hay bales, and a whole lot of unused wheat pasture! The future still looks bright on the commodity boards, with August feeders still well above $100.00. The cost of gain, though, is going to severely limit some things. It looks like everything is going to be like the dollar store, everything’s $100.00!

There will be some interesting opportunities this year. If a person doesn’t have to cut wheat, what’s wrong with buying a 700 pound steer to graze wheat? If you put two to the acre and they gain 200 pounds, that’s 400 pounds per acre, and at $100.00/cwt, that’s $400.00 per acre! Wheat at $10.00 a bushel, with a 30 bushel yield is approximately $300.00 per acre, less all the inputs. Which way is worth more? One nice thing about 2008 is that it appears like you can lock in a decent price right now for later delivery on either cattle or crops.

It’s not easy to swallow these new prices, especially when we’ve been spoiled with high prices for the last three or four years. However, it’s certainly nice to see there are plenty of takers for cattle at these levels. It’s usually better to sell a lot of a thing at a lower price than a little of a thing at a high price, supply and demand work a lot better that way!

1560 cattle sold in Enid this week. 400 to 500 lb steers up to $120.00, with 500 to 600 lb steers bringing $100.00 to $110.00. Feeder steers all bringing from $94.00 to $104.00. Heifers bringing about $95.00 give or take, whether they weigh 500 or 900 lbs. Butcher cows from $35.00 to $45.00, and bulls up to $64.00. A few bred cows bringing up to $950.00.

Our next end of the month cow sale is Tuesday, January 29, 2008!