Latest / CattleUSA Daily / 145: This Week's Cattle Market Update with John Campbell

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145: This Week's Cattle Market Update with John Campbell · CattleUSA Daily

0:03
Welcome to the Cattle USA Daily podcast.
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Your go to source for the latest.
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Livestock markets, industry insights, and the update shaping
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agriculture today. I'm your host, Lauren Moylan, a
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passionate advocate for agriculture, here to keep you
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informed and connected. Now let's dive into today's
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episode. John, welcome back to the
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podcast. Let's recap the market in La
0:29
Junta this week. How did the sale go on Tuesday?
0:33
Give me the update. You know, it went really good.
0:36
We're, you know, seasonally still pretty, pretty short.
0:39
But, you know, we continue to see these huge moves in, in all
0:44
classes of cattle, $1.00 to $5 moves are being replaced by 10
0:50
to $2530 moves. And part of that is the market,
0:56
but it's also directly proportional to the value of the
1:01
animal. You know, a dollar 100 is still
1:04
a dollar 100. It's still $7.00 a head.
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But, you know, two or three years ago the animals were
1:11
$1300. Now they're worth $3000.
1:15
What's $7.00 a head in terms of a percentage of the total value
1:20
of the animal When you, you take a 7 weight steer up a dollar 100
1:25
very insignificant. So I, I guess what I'm trying to
1:29
communicate, you're going to continue to see these big
1:33
10/20/30 dollar moves One Direction or the other.
1:37
Because as a percentage total value of the animal, 7080 bucks
1:43
now has the same percentage in that value as 7 or $8 did when
1:49
the animals only worth is 1/3 as much.
1:51
So kind of a little X explanation of of of why we're
1:57
seeing these big moves, not only in the cash, but you see it in
2:00
the commodities too 'cause we're just such high, high levels.
2:05
But starting to see a few yearlings show up here in La
2:10
Hana. You know, we had some 6 weight
2:14
efforts this week bring 378. Their Big Sisters weighed 7 and
2:19
1/4 and bring like 362. The steer side of things, some
2:26
wean black steers weighing on top of 6 bring 439, seven
2:31
weights north of $4.00. I I saw in Dodge City, I was
2:36
there yesterday they had 6 weight empers and seven weight
2:40
steers both bring an excess of $4.00 a pound and that's kind of
2:45
a milestone. You, I mean people that are in
2:47
the business. Well, I wonder if, you know, the
2:49
fats will get the $3 or I wonder if the feeders will get the
2:53
$4.00. Well, we're knocking right on
2:56
that door. They had some 860.
2:58
Well, we had some 860 LB stairs bring 364.
3:03
I, I, I mean, you're just seeing the higher highs all the time.
3:08
I thought our cows yesterday were steady ahead of Labor Day.
3:12
They're going to have a hard time getting these cows killed
3:15
to get the product out before the last big hurrah as far as
3:20
Labor Day goes. But typically if you'll trade
3:23
your cows a week or 10 days ahead, your cold cows ahead of a
3:27
major holiday, 4th of July, Labor Day, Father's Day, Easter,
3:33
Easter, usually afterwards, because you know, the Catholics,
3:37
us Catholics, we don't need to meet on Friday.
3:39
So, and, and all those things sound kind of corny, but the cow
3:43
market is about as seasonal of anything that we deal with
3:47
because you're going direct to the Packer and he's dealing
3:51
direct. Then it's a shorter step to the
3:54
consumer. And so a lot of times after
3:57
Labor Day, it goes back down. The kids are back in school,
4:00
everybody's, you know, covered the BBQ grill up, they park the
4:04
camper. It's over the cookout time, the
4:07
this and that. But numbers are so short and the
4:10
man is so great for what we've got.
4:12
It'll probably continue on about like the fat cattle, you know,
4:16
10 years out of 10. The fats are lower in August.
4:19
They just always have been. Every spring calf is in August
4:24
that was born in the spring. Well, you know that has not held
4:28
Drew the last couple years. August has been the high.
4:31
So you can throw a lot of that out the door.
4:33
But full circle, the cow deal does go fairly cyclical and
4:39
normally we put the highs in in the cows.
4:42
We had some 2 year old and they were Brangasi type Peppers which
4:46
were a little north for Brangas, but they brought 35 1/2.
4:50
And we sold some older cows that had like 250 weight calves bring
4:56
$4200 a pair and the cows were old.
4:59
So it, it is paying, I would tell producers I've had to talk
5:03
people into pregnancy testing their old cows.
5:07
Typically when the fall comes, you know, you, you preg your
5:11
cows because you got them gathered because you're shipping
5:13
the cabs, you're splitting the cabs off.
5:15
And you know, some I, I don't like that cow.
5:18
Send or send this cow or send that gal if you know there's a
5:21
chance they might be bred. It is paying to spend the 5
5:26
bucks or 7 bucks a head or whatever it cost wherever you go
5:29
to pregnancy test. The old cows, even some of these
5:32
great big cows, as high as the cow market is, there's still 100
5:37
or two there for the producer this time of year in the fall to
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preg test those cows. So much feed, as we talked about
5:45
last week, Warren, that these guys are going to have to find a
5:49
way to merchandise this feed and a lot of them opt to buy an old
5:53
bread cow. So they're already, they're
5:55
already buying them. Awesome, awesome.
5:57
Well, what else stood out to you from other markets around the
6:00
area just kind of from this week in general?
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Well, I mentioned a little bit about being in Dodge City
6:06
yesterday. They had some milestones on some
6:09
prices there. We also had a Internet video
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auction, the High Plains Internet video auction through
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winter livestock through Cattle USA and some outstanding prices.
6:20
Really a lot of optimism and these would be Lauren fall
6:24
delivery cabs that you know are not going to come for another
6:28
3-4 months, 22 to four months and five weight steers.
6:33
And these would be cattle mostly coming right off the cow kind of
6:36
from 447 up to as much as 487. So you're putting the freight,
6:43
you're putting a lot of other expenses on those cattle for the
6:47
the end buyer ever gets them. I, I, I thought those were
6:50
outstanding prices for the Cavs being contracted heffers kind of
6:55
420 to 462 1/2. You get into the six weights,
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why you know, we had 6 weight steers from 388 up to as much as
7:05
442 1/2 when 6. And that's not you know we're
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we're just getting that for a lean one here today.
7:13
That's a calf, A ballin cap off the cow coming in the fall.
7:18
So everybody's really optimistic the little that like a six way
7:21
dipper 3689-UP to as much as 4/18 for a six way dipper, which
7:30
today would be a pretty darn good price for A at the auction
7:34
for a four way steer. So what what that's telling you
7:38
is that probably better things to come.
7:41
You know, those people are optimistic on out the next 9000
7:46
days. We had a pretty long string of
7:48
appers. We were selling a load at a
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time. Most of those appers, they were
7:52
big appers. Wait north of 11 cabin in the
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spring bring 37 thirty $800 a piece.
8:01
They may still be the best value.
8:03
They sound high, but not when you're getting 2750 for your
8:08
£600 steer cap, but 1000 bucks with him and by the factory and
8:14
you sell that cap. You know you got a winter bill
8:17
and 1000 bucks in your bread heifer if it all goes according
8:21
to oil and she holds your hold your value.
8:24
So anyway, that's kind of what going on around in our world,
8:28
Mark, marketwise. Awesome, awesome.
8:30
Well, shifting gears a little bit, we had the catalog numbers
8:34
released last week. What are some key takeaways that
8:37
you have from those? Anything that you kind of want
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to touch on with all of that report?
8:42
You know, I thought the mark, the numbers were still pretty
8:47
bullish. I'm not an analyst, but I think
8:51
the big take away that I got from it is you know we had a 94%
8:56
placement figure and that's a 6% decline.
9:01
But Lauren 90% of that 6% decline across the United States
9:07
come out of the state of Texas. So Texas for 90% nationwide of
9:15
that 6% decline, they were down 95,000 cattle lot of that's the
9:20
Mexican trade. Now how much and you can break
9:23
it down, break it down, break it down.
9:24
There's other cattle in Texas, but what I gathered out of the
9:29
feed report is man, oh man, I feel for an independent feeder
9:36
in the state of Texas because you know, it's what's he going
9:41
to do it is he going to come north And as he comes N the
9:46
cattle get, I mean, it's just a fact of life.
9:49
The cattle get better and the cattle get higher.
9:52
And so he's going to pay the freight going back S with higher
9:57
price count. I I mean, it's pretty tough to
9:59
go to Burwell, Nebraska and take those Iwegians out with the bib
10:03
overalls and no underwear on, you know, them seven £800
10:08
steers. And then you're going to put the
10:10
freight on him and take him back to Texas.
10:13
And then the saddest thing in the world, then you have to take
10:17
the southern discount of $10 a hundred when he's fat.
10:21
And that's all because they've entered this contract with, with
10:25
the devil. Excuse me?
10:27
That's the only way that that's the only place they got to sell
10:29
it. So I feel for those guys.
10:32
And have they made their own bed?
10:34
Yeah, to some degree. But in the same sense, you know,
10:37
the lack of competition in the Fed cattle sector has forced
10:41
them to enter into a contract with the Packer in order to get
10:45
their products sold. Well, hell for I don't know how
10:49
long, there's a $10 discount you can look at.
10:53
Don't, don't take my word for it.
10:55
Go to the USDA, go talk to anybody.
10:57
If they're worth 245 in the North, they're worth 235 in the
11:01
South. Well, that's pretty significant
11:03
on a 1500 pounder. If my mass writes 150 bucks a
11:07
head and then you're going to pay more for them in the North,
11:11
put the freight on them and then take 10 bucks, 100 less for
11:14
them. That guy is in a dilemma, but he
11:18
loses his ability to market his cattle and you know, he just has
11:23
to take what's offered. But after going through the
11:26
Holcomb fire or COVID and I know several people in Lana, Colorado
11:32
that it sold to the same guy for twenty 30-40 years and they
11:36
wouldn't take him at any price. So it's easy to say, well, don't
11:40
make a contract, don't make a deal with the Packer and da, da,
11:43
da, da, da, da, da, da, da. And, and we, we all know
11:47
competition is a great thing. It's a great thing in my
11:50
business. We need more competition.
11:52
I don't want to be the only guy on the block because it raises
11:56
my level of, of I have to be more competitive.
12:00
I have to keep my prices low. I have to do a better job.
12:02
I have to provide more services for my customer because they
12:06
don't have to go very far and somebody else will do that for
12:09
them. That doesn't exist in the
12:11
packing dynamics. So if you want to stay in
12:14
business, you got to make a deal with them or you can't sell your
12:18
fat cattle. And, and that's the hard truth
12:20
of it. So you have less and less, less
12:23
competition on that end of it. And you know, I, I think these
12:28
Packers will get to a point where they'll say, well, we're
12:31
just out of cattle. We're going to shut our kill
12:34
down. We're either going to close the
12:36
planet XYZ or this one or that one, or we're going to go to a
12:40
three day week or da da, da, da, da.
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We just can't get the product. And then the product they get,
12:46
they have the ability to freeze that meat.
12:50
You go by Dodge City, KS, there is a freezer plant there that's
12:54
bigger than the Astrodome and they can freeze this meat.
12:58
Well, then it becomes a storable, non perishable item.
13:02
Well, we can't do that with cattle.
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And so then we're going to go hand them out and we're just
13:07
going to feed the retailer just a little, just a little, just a
13:10
little. And that's going to raise the
13:12
retail price of meat and and then they can dump it.
13:16
But oh, they'll kill their own cattle.
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I don't know. It hasn't just happened, but
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that's the direction we're going into.
13:22
But they're not going to, they're not going to remain
13:24
unprofitable for very long. They'll do something to juice
13:28
the price of the meet up to where they can make it work.
13:31
And I feel the independent feeder, if he hasn't made a deal
13:35
with them, he's going to be on the short end of the stick cuz
13:38
he'll, they'll kill their own cattle before which, you know, I
13:43
mean, they're, they're allowed to do it.
13:44
That, that, that's a law. But our, our antitrust laws and
13:47
the things that have gone on, I've never been enforced.
13:50
So they, they haven't been able to break these guys up.
13:52
And now they're so big. You know, I, I think the
13:57
government's almost afraid to, because they handle the food
14:00
supply for, for the world. You're, you're down to four or
14:04
five guys doing it, you know, but in the meantime there the,
14:07
the millionaires are, are, are getting taken out and the
14:10
billionaires are running the deal now.
14:13
Fascinating, absolutely fascinating.
14:15
And it's one of those things like I, I knew the impact on
14:18
taxes was going to be significant on the feeder cattle
14:22
report, but that is massive that the 90% of the 6% was Texas.
14:29
It's interesting. It's interesting.
14:31
So yeah, pretty, pretty wild times we live in.
14:36
But but it's just discouraging. You can kind of, and it hasn't
14:39
just happened. It's been over 20 years.
14:41
But man, oh man, it it is a tough, tough environment to
14:47
exist in. You know, I have my hats off to
14:49
those feeders. We're fortunate as calves and as
14:53
Stocker op operators and even your land operators.
14:56
We've got enough competition in our business to keep it healthy.
15:00
Yeah. You touched on earlier when we
15:02
were just discussing prior to that, like you've been around
15:06
the block a few times. This isn't necessarily like the
15:09
first time the cattle market has looked like this or done things
15:13
like this. Do you want to kind of expand on
15:15
that a little bit and just historically speaking, your
15:18
viewpoint on what's going on right now?
15:20
You know, I think fundamentally we're pretty sound this time.
15:24
I think the numbers are such. But you know, you, you've got
15:28
the Mexican deal shut down, you've got the tariffs on the
15:32
Brazilian tariffs, the Canadian tariffs, a lot of this and, and,
15:35
and it, it, it's all kind of come together.
15:38
And then of course, our short, short, short supply of, of, of
15:42
cattle and cheap feed source. It's kept this thing pretty
15:47
elevated. And I think it will, and I'm
15:49
optimistic right on out. I think the thing will be all
15:52
right. But at the top of the pyramid,
15:54
it's such a delicate balance that anything goes out of kilter
16:00
and it immediately slam dunks the market.
16:04
You know, I mean, let you know some kid in Missouri gets a, you
16:08
know, mosquito bite. And I think he's got a screw
16:10
worm in his head. And, well, hell, they take the
16:12
market $9 a hundred and then find out, well, no, it really
16:16
wasn't that. He's just, you know, his folks
16:19
didn't dip him before that. He went to school, you know, so
16:22
he's OK now. So then over the next, But in
16:25
the meantime, by hell, you know, that was 234 bucks on your fat
16:29
cattle. So you know, you just pooped off
16:34
80 bucks. If you had to sell that week
16:36
because you're in a contract and you take the market the week
16:40
before you, you, you have, I guess you could pass and, and
16:45
hope it goes higher, but ultimately you're going to take
16:48
what they give you. So those kind of moves and those
16:52
things like that have a man, they just have, they have such
16:55
a, such a huge impact and, and, and we're at such levels that
16:59
everybody is nervous, you know, and, and, and any little thing
17:04
there. And, and it's sad to say, like
17:06
we talked earlier, man, oh man, it's not too cheap.
17:09
The cattle are not too cheap. The price of beef is not too
17:13
cheap. Steve Stratford made an
17:15
excellent example of what your latte cost, what your Cheerios
17:19
cost and what a box of rubber bands cost.
17:23
You don't mind giving it for all that, but Oh my God, meat go to
17:27
$6 a ham, a pound for a hamburger.
17:31
But hell, go to Sonic. Sometimes you can't get out of
17:34
there for less than 18 bucks. Well, hell, you can buy, you can
17:37
build 3 hamburgers for what one of those cost of the drive in
17:41
and I'm not putting them down, but just the comparison I'm
17:43
making it. It's really not too cheap.
17:46
And now in competitive protein there we've got a little problem
17:49
with the porks and the and the chickens, but I don't think
17:53
you'll destroy the Publix demand for beef as long as the money
17:59
holds out. What are your thoughts on that
18:01
competitive protein aspect? I want to go into that a little
18:03
bit more on kind of the concept that if beef continues to rise,
18:07
people are going to turn to other protein options.
18:10
They're going to pick up more chicken, they're going to pick
18:12
up more pork, things like that. We've kind of in the beef
18:15
industry, lived on the mound. The flavor is still king.
18:19
Beef are going to like people are going to come to beef
18:21
because it's beef and be willing to pay for that.
18:25
But I want to hear kind of your thoughts on that aspect.
18:28
Well, and, and I kind of think so, you know, a guy put it in
18:31
perspective to me. He said, John, name one thing
18:35
that you go to buy that isn't high.
18:39
Then I said what? Because I think, Oh my God,
18:41
these, these people, hell, 80% of them live from one check to
18:45
the next and they're just barely making it.
18:47
And the credit card debt is a whatever, an all time high X
18:52
amount of people have their credit card maxed out.
18:54
And I think where, where are they going to give and take at?
18:58
But, and that does concern me, but you know, everything, I, I
19:02
think they're almost numb to the fact that everything we're doing
19:06
is high. You know, I mean, light bulbs
19:08
are high, pencils are high, Beef's just part of the deal.
19:11
And, and it's high too. But yes, you have some, you have
19:15
some alternative sources of protein there that are.
19:18
I have a friend that's in the restaurant business and he said,
19:22
John, what I'm liking is he said, I get that pork chop about
19:26
that thick and he said I'll cut it down the middle and butterfly
19:30
it. And he said on the plate, he
19:32
said, I got a dollar in that pork chop.
19:36
And he said I'm liking the margin on that pretty good,
19:40
knocking it out at 151822 bucks a plate versus he said I got a
19:45
$20 steak and hell, you know what I mean there.
19:48
There's just not the margin in that unless I reprint the menu
19:52
every week. I got to sell it for 2426.
19:56
I mean, he, he's going to make money.
19:58
But so I, I think that it is a concern.
20:01
You know, you're going down the Walmart meat aisle and a rib eye
20:06
that big cost 28 bucks and right beside it, you can buy a full
20:10
rack of pork ribs as long as you're lagging.
20:13
It cost 10 bucks. So those, those are, those are
20:16
things I, I just for now, it seems like there's enough money
20:21
out there and people are willing to compromise because we're
20:25
still in a society that we want that instant gratification.
20:29
And man, we like that hamburger and we like that meat and we're
20:32
going to buy it. And now honey, incidentally,
20:35
we're not going to be able to pay the light bill this week.
20:37
You know, we're going to build a campfire, but by God, throw her
20:41
in there. Throw, throw her in.
20:42
I'm going to have that rib eye. So, you know, I, I don't think
20:46
that's very sound reasoning. But you know, even my wife and
20:49
I, we and we eat meat every day. She goes, I'm not giving 28
20:53
bucks for that steak, you know, and I said, yes, you are and you
20:57
throw it in there, you know, but so anyway, I, I don't know, I
21:01
don't know, but it, it, and that's the $100 million
21:04
question, Lauren, you know, when does that intersect?
21:08
Where beef price and you know, demand finally hit the hit the
21:14
intersection to where whoa and and and I think that you don't
21:19
have to get out very much and that's the conversation
21:22
everybody's having and you know, do I know what the answer is?
21:25
No, I don't. I just keep buying it and keep
21:29
eating it, you know what I mean? But, you know, producers are,
21:32
are having a good run right now, but by God, they've burned it
21:35
and they deserve it. You know what I mean?
21:37
It, it, it, it, it is not the life of Riley out there being in
21:42
the stalker, the cow cap business, you know, yeah,
21:46
there's really, really good operators.
21:48
Like, there isn't everything that are really, really
21:50
successful. But this is a shot in the arm
21:53
for everybody. And by God, they need it.
21:56
They they, they, they need it, which we're saying, well, yeah,
21:59
we can all agree on that. But how do we justify the trip?
22:03
You know, So I don't know what, what, what that'll be, but.
22:06
All great points. All great points.
22:07
What other key takeaways do you have that you would like to
22:10
leave with the audience this week?
22:12
Anything else that we kind of need to hit on John or anything
22:14
that we else you want to touch on?
22:16
I think if, if you haven't got one of these in the mail, you,
22:19
you still have a couple days through the 15th to get your
22:22
share of the $84 million from the judgment, antitrust judgment
22:30
against JBS. Not because they're guilty, but
22:34
it just gives them a chance to give back to the producers,
22:37
probably take the money and now I guess you can buy stock.
22:41
So you're not only fighting the big 4, but you got to fight the
22:44
public money as well because now they're, they're traded on the,
22:48
the stock market. It kind of reminds me, I don't
22:50
know where if you're, if you're not old enough to see the movie
22:53
The Jerk, it was Steve Martin. I think I've actually, no, I
22:58
think I've actually seen that before with my dad.
23:00
OK, all right. But anyway, I think I know what
23:02
you're talking about. There's a party in the movie
23:03
where Steve Martin is writing a check to everybody for $3.80
23:09
fourths because he invented the optigrab that made everybody
23:13
that bought a cross eyed. Anyway, I'm just hoping nobody
23:16
else files. It'll just be me and I'll
23:19
probably get $3.84 a head but I'm hoping I get nobody else
23:23
applies and I get the whole 84,000,000.
23:25
Hey, there you go. That's one way to win the
23:27
lottery. Well, yeah, right, right, right.
23:29
So I would say on a lighter point in closing, I appreciate
23:35
everybody that's watching the the podcast, but if you've
23:38
noticed during the podcast, there's several interruptions.
23:42
So I'll bullshit for about 3 minutes and then hear something
23:46
comes on and I I want to know. I appreciate all the calls, but
23:51
I do not have the solution for stuck poop.
23:56
The ad that comes on and I, I know big pharma is out to get me
24:00
and wants me to take the ad down, but I I'm not the stuck
24:04
poop guy and and also I'm not the guy that you call about
24:09
seamless gutters in Thatcher, Colorado.
24:12
I, I, I have, I have no idea how to handle your problem there.
24:16
And finally, I really would like to thank all the ladies at the
24:21
Sunnyside Nursing Home, the Bridge Club.
24:23
But I am returning your down payment checks for your
24:27
Brazilian butt lift procedure because I've gotten several of
24:30
those too. So any day you got to take those
24:33
ads in between Lauren and I's conversation, we don't get to
24:37
pick and choose splashes that up there.
24:40
But I do appreciate, I know we're getting some positive
24:43
feedback over the gutter system and the stock poop deal.
24:48
So thanks. Thanks for your calls that way,
24:50
but really don't don't send any more checks.
24:53
John is tapped out, John. John is tapped out.
24:55
Unfortunately, you cannot go to Lehonta Livestock Auction to get
24:59
your Brazilian butt lifts. Maybe that's something you can
25:03
add on to your services in the future, John, but not today.
25:06
Right, right. We're looking into it and and I
25:10
appreciate everybody making the connection, you know, with our
25:13
AT. Wonderful, wonderful.
25:17
Well, John, as always, thank you so much for your time today.
25:22
And coming on sharing a little bit more about the markets to
25:25
all of our listeners out there, Yes, do not call John.
25:28
If you need a Brazilian butt lift, call your local plastic
25:31
surgeon because unfortunately that is that is not on us.
25:35
And we also don't don't install gutters.
25:37
You can maybe if you offer John enough money, get him to climb
25:41
on your roof and clean out your gutters.
25:43
But you didn't hear that from me.
25:44
So keep calling John if you really if you really want to.
25:47
But anywho, to all of our listeners, thank you so much for
25:50
listening to another podcast. We will see you all tomorrow on
25:54
another one. Have a good one y'all.