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Just a scoop full(Sept. 10)--It is frustrating for the fat cattle market to be struggling to get over a dollar a pound. Particularly at times when we are shorter than usual of numbers available of fat cattle. The packers have done an excellent job in managing those numbers available to keep a lid on the price of fat cattle. It has also been an easy year for the packers to do this, as for a long time the farther out months of fat cattle were a lot higher than the present. Thus, the packer could easily gather all the contracts they wanted. When corn was making its big rally, it was also taking fat cattle with it on the futures. I remember at one point seeing one fat cattle month at $117 per cwt. I had thought for a week or two that there was no way we could ever sell fat cattle that high. At that point, for the spring months, we still had several predicting that we would hit $120 per cwt. I called early one morning to sell several contracts of fat cattle. But, being one day too late, fat cattle had fallen to $114. I made two mistakes that day. The first mistake was not selling them and the second mistake was asking the futures broker what he thought. That is a lot like asking a sale barn owner what he thinks. You would be far better off simply flipping a coin or just simply doing the opposite. I guess it doesn't make much difference. I hope that is not the last big mistake that I ever make. Because that would simply be saying that my days on this earth are numbered and very short. I asked a feedlot manager what most cattle were doing as far as making or losing money. He said it varies all the way from making a $100 per head to losing a $100 per head. And the cost of gains were from 78 cents per pound to $1.10 per pound. A good thin steer that was feeding very well with a big fat heifer last year and the year before might be on the upper end. After looking at my closeouts--I guess I didn't have any good thin steers. Editor's Note: Jerry Nine, Woodward, Okla., is a lifetime cattleman who grew up on his family's ranch near Laverne, Okla. 9/22/08 Date: 9/17/08
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