At some point climbing up a mountain the air gets a little thinner and it gets a little more difficult to go as fast. The cattle market seems to be in that category at the moment. It has climbed fast and far, but maybe we have reached a plateau where someone needs to catch their breath!
Looking at the market on a yearly basis, it doesn’t look quite so daunting, but if a person looks at it from a distance, say the last 15 years or so, the up in the market is amazing! It’s kind of like looking at the mountains from the plains thinking that they are pretty high, and then looking at the plains from the mountains and realizing how high they actually are!
Most everything has a different look to it depending on a persons perspective. The cattle market may look high to some folks, but to others it may not be high enough. $4.00 gasoline looks very high to people who were around when it was 27 cents, but younger folks don’t think much about it since they have not seen it any cheaper. The world population sure looks too high if you live in Tokyo, but it might look different if you live in Antarctica.
The cattle population in the United States is at a 60 year low, but other places in the world seem to have an abundance of them. American agriculture has the best production in the world, but it takes a little time and help from Mother Nature to get there. Beef production has hit highs with less actual cattle, but calf production can only go so fast. With the water and grass situation, it will certainly take a little time for any sizable herd buildup to happen.
The opportunities in the next couple of years will of course depend on moisture. Hay is very scarce, or at least very high priced, and many pastures need time as well as moisture to get back into production. Supply and demand seem to be working quite well, and the prices for cattle look very good. Are we ready for $100.00 butcher cows?
At the moment everything seems to be going in the same direction -- up! Land, input costs, cattle, feed, demand, IPO’s, even money seems to be getting a little more expensive! After the initial shock, maybe these high prices will be something we just have to get used to. After all, doesn’t $2.00 gas sound cheap now?
There are still going to be lots of chances to get into the cattle market over the next few weeks, months and years ahead! Beef still comes from cattle and calves still come from cows! Take advantage of the opportunities ahead of us!
Get in the action! Buy and Sell at the auction! Raise some beef!