You are currently reading: Joe’s Comments
When the markets closed last Friday, many people around the country breathed a big sigh of relief. The Dow Jones Industrial saw its biggest jump in a span of 45 minutes ever. Cattle futures also moved well to the upside. What a great way to go into the weekend.
Well, Monday morning rolled around and things got much, much different. The Fed announced they were moving interest rates to down near zero, and the Dow Jones certainly didn’t like it. The last I checked before press-time, the Dow was down nearly 3,000 points and cattle futures were down nearly the limit.
Now here is the point I want to bring up which made my blood boil on Monday morning. Everything had a substantially better feel in the markets last Friday. Then, over the weekend, I had a lot of people sending and posting photos of empty shelves at meat counters all across the country. One photo I particularly liked was the picture of a meat counter that was bare – expect for all the fake meat, all the real meat was gone.
It is very apparent meat movement has been exceptional. I know much of this is due to people “hoarding” at the retail stores, but nonetheless, meat counters are empty and people are looking to purchase more. Some of the meat companies are having trouble getting enough beef to cut up and have sent employees home.
This all should aim towards higher beef prices, right?
Well, Monday morning saw boxed beef retail cutout prices higher, so fed cattle inched up a little bit – just before plummeting to near limit down levels. I am here to tell you THIS IS NOT RIGHT.
Action much be taken and must be taken rapidly. Our family has contacted all of our Congressmen and voiced our concerns. We have been in contact often with our representatives in Washington, D.C. and I am happy to report they say their phones have been ringing off the hook with calls from ranchers and farmers. Senator Tester even had a meeting with Secretary of Agriculture Sonny Perdue and told him that what is happening to ranchers is “Just Not Right.”
Ladies and Gentlemen, I know this is an extremely busy time of the year, but if a large percentage of you would contact your representatives in Washington, D.C. and voice your displeasure with this whole situation, maybe we can get something done. If you don’t feel comfortable calling your representatives, send them an email, or have your kids or grandkids do it for you, if that is the case. But, somehow reach out to them.
Here is the letter my brother Joe sent to our Montana representatives in Washington, D.C. (Feel free to use this information to forward to all of your representatives):
Here are the real figures on what is happening in this livestock trade. The packer and retailer are putting the screws to the producer and feeder.
- This January, Feeder Cattle had a high of $145.07.
- On March 16, 2020, we had March Feeders at $108.50.
- This equals a $37.02 drop, or 26 percent.
- On January 21, 2020, Average Feeder Index was $145.46.
- On March 16, 2020, Average Feeder Index was $124.67.
- This equals a $20.79 drop, or 15 percent.
- On January 21, 2020, February Live Cattle was $126.37.
- On March 16, 2020, April Live Cattle was $92.52.
- This equals a $33.85 drop, or 27 percent.
- However, packers were bidding $105 to $110.
- On January 21, 2020 Fed Cattle were $126.50.
- On March 16, 2020, Fed Cattle were $107.50.
- This equals a $19.00 drop, or 15 percent.
- On January 6, 2020, we had a Choice cutout high of $209.65.
- On March 16, 2020, Choice cutout was at $224.36 which equaled a $16.22 UP in ONE DAY. Over the years, we typically call a real big advance in the cutout value to be $3.00 to $4.50. $16.00 up is unheard of in one day, it’s HISTORIC.
- This equals a $14.71 increase or a 7 percent INCREASE to the packer from January till today.
Back in January 2020, we were selling Fed Cattle in the $125 to $128 range. Choice cutout was $209.65 to $214.49 and the packer had large profit margins at that.
Today, our cutout was at $224.36 and they are bidding $105 to $110 on Fed Cattle.
If the price of our fed cattle was tied to the box beef price in the same manner the way our price of fuel is tied to crude oil, we as producers and feeders would not have experienced a 15 to 26 percent drop in the value of our product and in the same timeframe see the packer and retailer experience a 7 percent increase in the value of their product.
It is crystal clear to me that the producer, feeder, and consumer continue to get the boots put to them. We have to make this situation more FAIR if rural America is going to survive.