Pricing your Cattle
The Cattle Markets are struggling…
The current markets for all classes of cattle are struggling. The cattle industry is nearing the end of a 6 year expansion in which many operations increased their numbers and don’t have room for additional cattle. Operations that expanded during the “irrational exuberance” of 2014 and 2015 paid up to $3,000.00+ per head for bred heifers and young cows and their financial statements have taken a hit with cattle losing 40+ percent of their value since then. Even if they have room for more cattle, they lack the ability to borrow the money to buy them. Additionally, many operations cannot generate a reasonable profit at current calf prices and have no incentive to expand, even if they could. Compounding the problem, today’s larger cow herd and the resulting increased production of beef coincides with record production of both pork and chicken, forcing beef to compete with large supplies of lower priced alternatives.
Since the market highs of 2014 & 2015, the following scenarios have occurred time and time again:
Cattle are listed for sale at prices so high that sellers receive no response whatsoever.
Cattle are priced above current market values and sellers turn down reasonable offers from buyers originating from The Cattle Range.
In both scenarios, many sellers are eventually forced to haul their cattle to a local sale where they bring substantially less than priced on The Cattle Range or reasonable offers received and turned down. Adding to their losses, sellers are out freight, yardage, and sales commission.
Regardless of how cattle are marketed, it's unlikely they'll bring more than their current market value.
Tools to assist in pricing cattle:
Regarding pricing bulls, the market is saturated with supply exceeding demand... Production Sale results for reputation breeding programs are running up to 35% lower than the average for the 3 previous years.