August 17, 2009

“Sires Are Only Half”

                How many times have you bought a son of a bull you really liked and ended up canning him as a two or three year old because he grew up into Holstein/Rhinoceros cross?  How many times have you seen the offspring of a great racehorse that couldn’t out run my 35 year old kids horse?  Hobbled?  Experienced horse and cattle breeders will tell you that sires are only half.

                Cattle market watchers, soothsayers, economists, and gypsy fortune tellers have been telling us for months, if not years by now, that we are due for a big bull run due to a consistently shrinking calf crop.  Anybody who has had cattle on feed in 2009 knows that prediction has yet to materialize.  Why?

                Because markets, like offspring, are created by two parents, a supply sire, and a demand dam.  If you look at the sire of our offspring we call market, you would think market should shape up to be a pretty impressive individual.  Smallest calf crop in 50 years,  monthly adjusted fed cattle supply well below the 5 year average, and the smallest fed slaughter levels seen in 15 years, to name a few. 

               However, a glance at the bottom of the pedigree should give everyone a sick feeling in the pit of their stomach.  Studies show demand off between 8 and 10 percent in 2009.  That is decimating to any industry.   Theories as to why this has occurred are as numerous as the opinions on each theory.  The one that gets the most ink is that it’s just a function of the overall economy.  People aren’t traveling as much, not eating out as much, the restaurant trade is so slack that the retailers have all the margin.  That’s probably has some truth to that line of thought; let’s hope so.  If a year from now the DOW is back up to 12,000, unemployment is under 7%, and the economy seems to be back chugging along, we better see a bigger appetite from beef buyers.  I’m not going to launch a big debate on the checkoff in this article, but my point is that all markets must have a strong demand pull through to offer any chance of profit for producers.  If you support the checkoff, do so strongly, get involved.  If you don’t, I challenge you to be more than a nay sayer.  Either work in a constructive manner to change it in a positive direction, or have a better idea to promote our product.  Remember the buggy whip or the manual typewriter:  it doesn’t matter how tight the supply is, with no demand, you can’t sell ‘em!!

 We are busy getting ready for the fall run.   The pasture pens on the east side of the Miles City feedlot are being expanded to give us greater capacity to feed back to grass cattle or replacement heifers.   All these pens are 20+ acres, with big hills, concrete bunks and pads, and super drainage.  They will keep your calves clean, green, healthy and in just the right shape to turn out in 2010.  Fall placements are filling up fast; don’t wait too long to reserve pen space!

Happy Feeding!

 Eric Moore