Sale Barn Study

contributed article by Kirk Lynch Lynch Livestock Inc. and Humeston Livestock Exchange, Humeston, Iowa

The whirlwind of the cattle business has continued since the last time that I talked to The Stockman readers. The old saying “what doesn’t kill you makes you stronger!” does NOT apply to what we have been through in the last year. It seems that whenever we have any sort of positive momentum, we get punched in the gut and kicked while we are down. If it isn’t one thing, it is another: from a fire at a packing plant to COVID-19 hitting, and plants shutting down due to the virus causing a backlog in cattle. Now with that said, I am very cautiously optimistic that we are about to see some brighter times ahead!

On the fat cattle side of things, we are backlogged on big and overfat cattle and not very current on our inventory, which has caused the market to be very stagnant in May, June, and so far in July. The shutdown in the plants could not have happened at a worse time as we backlogged more cattle going into the months where we tend to have our highest inventories with new crop calves coming to town. Demand has been pretty good considering the circumstances, and we have started working through some of the backed-up cattle. I have seen a little uptick in the market in the second week of July that may indicate that we have possibly seen the bottom of the market. I am optimistic about this but cautious as well; we still have a fair amount of cattle that we need to get through. I think if we can get to Labor Day, things will turn in favor of the cattle feeders. That is a big “if”, as we live in a world that is as volatile as it has been in a long time, and one thing can turn the market upside down for several weeks.

Now to the bright spots in the cattle market! The feeder market has been strong. In some cases, better than it was a year ago. Yesterday I saw a big set of steer calves that I bought a year ago, bring $18 more a hundred than they did last year. The 500-800-pound cattle are bringing good money, and I think this will continue through the summer months and hopefully into fall. This is another great sign that we are (hopefully) about to turn the corner. I see a premium given to calves that are value-added i.e., Naturals, NHTC, etc.

The Holstein fat market has been very strong and has recovered very well. In the last couple of weeks, we have seen the top dairy cattle average within a few dollars of the beef fats. The market bull and cull cow markets have been very strong, considering we are in the time of the year when there is a hole in numbers for that market. This should con- tinue until fall, and these strong markets should help the fats from bottoming out anymore than it has.

As far as breeding stock, that market has been strong as well. While there was a little drag in March and April, the breeding bull market sure picked up in May and June. I know several seedstock breeders that sold only a handful of bulls during the first two months of COVID but then sold out within a week or two in May and June. The same can be said for bred cows/heifers and pairs as there continues to be sol- id demand for breeding stock.

Well, I hope everyone is having a great summer, and if there is anything the guys at the barn or I can do for you, just give us a call. This article will make it a full year that I have been writing for The Stockman. I sure do enjoy the conversations that I have had from writing this article over the past year and look forward too many more with you over the next year!