Margin thin on feeder cattle
By Jerry Nine
(July 17)—Most of our area received some moisture this past week with some getting not quite an inch to some getting 2 inches and to the east of us even more. It was very much needed, as a lot of the pastures were getting very brown.
This cattle market has been very puzzling to me these past few weeks. As far as feeder cattle prices, it appears the only ones that can step up to the plate and buy feeders at these levels are those who have a packinghouse or ties to one.
This leaves the smaller or independent feedlots not being able to compete. With a lot of smaller feedlots closing or with their numbers getting a lot lower, I have feared for quite some time that these smaller feedlots would some day be nonexistent. We are not there yet but we are at a very critical point. Is it a conspiracy from these big corporations to get rid of the little guy?
I do not think so. I personally do not think they are concerned or give the little guy much thought at all. In other words if you can survive—do it. If not, get out of the way. I have felt for years that it was not in our best interest to provide the packer with cattle they do not have to compete for on the open market. A lot of feedlots got to pricing their show list either 50 cents or a dollar over the top of the market for the week. This beat some by 50 cents or a dollar but gave the packer so much extra leverage he did not have to try hardly at all to buy what few cattle they needed live.
I had criticized this publicly and a few places I fed cattle at. I said, “Do you want to sell yours live?” in a bit of a sarcastic tone. But I knew the packer could not care less about my 50 or 100 head. I understand why these smaller feedlots felt backed in a corner. One problem we have is the price we get for fat cattle has nothing to do with what they can charge you for in the grocery store. I’m not sure we would not be better off selling fat cattle based on the futures market rather than a manipulated cash market. However, sometimes the futures market seems manipulated, too.
My 17-year-old son was sick for about four days laying in bed most of the time. The fifth day he finally could eat some and the sixth day he called and said, “Dad I feel good. I’m ready to go to work.” When he said that I didn’t even check and called the doctor, as I knew that kid had a fever bad. A friend of mine’s son is getting married. Another friend said to the dad there are only three things you need to do at the wedding: Show up, shut up and pay up.
Editor’s note: Jerry Nine, Woodward, Okla., is a lifetime cattleman who grew up on his family’s ranch near Laverne, Okla.