Saturday, June 02, 2018

Guebert: Tanning cowboys' hides

Forty years ago, Waylon and Willie asked the nation’s mamas not to “let your babies grow up to be cowboys” because “they’ll never stay home and they’re always alone, even with someone they love.” That sage advice is even more true after a spring cattle market that’s been too wild to forget and too brutal to want to remember. In late February, August live cattle futures closed near $116 per hundredweight (cwt.). By April 3, however, prices fell to $99.60. Prices did rebound to $104 on April 27 but cracked again, to $98.25, on May 18. The roller coaster ride made cattle growers rightfully sick. The hoped-for sale price for a 1,325-pound slaughter steer went from $1,537 in late February to $1,300 in mid-May. That $237 per-animal difference, according to Iowa State University break-even calculations, cost feeders all their profit and then some. For example, cattle growers with 500 head of cattle saw their inventory devalue by $118,500 in less than 90 days this spring. A feeder with 5,000 head on feed witnessed a $1.185 million drop in value while a 50,000-cow commercial feedlot saw $11.85 million evaporate. The mid-May price slump was just “paralyzing to the industry,” longtime cattle market analyst Walt Hackney told Iowa Public Television’s Market to Market audience May 18...MORE

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