Latest / CattleUSA Daily / 159: The Cattle Market Outlook Every Producer Needs with Samantha Cozza-Wright and Dan Gerhold

Transcript

159: The Cattle Market Outlook Every Producer Needs with Samantha Cozza-Wright and Dan Gerhold · CattleUSA Daily

• 0:03
  Welcome to the Cattle USA Daily podcast, your go to source for
• 0:07
  the latest livestock markets, industry insights and the update
• 0:10
  shaping agriculture today. I'm your host, Lauren Moylan, a
• 0:14
  passionate advocate for agriculture, here to keep you
• 0:16
  informed and connected. Now let's dive into today's
• 0:20
  episode. Welcome to another episode of
• 0:29
  the Cattle USA Daily podcast. Today we are welcoming on
• 0:32
  Samantha Koza Wright and Dan Gehrholt on it to the podcast
• 0:37
  today to talk about the cattle markets, what is going on in the
• 0:41
  world of commodities insurance, all of the things.
• 0:43
  Samantha is someone that we are welcoming on to the Cattle USA
• 0:47
  insurance team. And so we're excited to have her
• 0:49
  on today to share a little bit more about her story, what got
• 0:52
  her in to insurance and all of the things like that.
• 0:56
  And just all of us can please share our thoughts and opinions
• 0:59
  on what is happening in the world of the cattle market this
• 1:03
  week. So without further ado, let's go
• 1:05
  ahead and hop into this episode with Samantha and Dan.
• 1:07
  But before we do, if you guys could take a second to like
• 1:10
  subscribe, rate and review this podcast, we would really
• 1:13
  appreciate it. And if you're here listening to
• 1:15
  the podcast every week, turn on those notifications too.
• 1:19
  That way you get notified every single time a podcast goes live
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  and you can add it to the top of your listening list for the week
• 1:27
  or for the day. Thank you guys so much for
• 1:30
  listening to another episode. Let's go ahead and hop into this
• 1:32
  podcast with Dan and Samantha. Welcome back to another episode
• 1:37
  of the Cattle USA Daily podcast. Today we have Samantha Koza
• 1:42
  Wright joining Dan and I on the podcast today.
• 1:44
  Samantha is a new Cattle USA insurance Rep and we are excited
• 1:49
  to welcome her on to join Dan and I this week.
• 1:52
  And just to share a little bit more about Samantha's story.
• 1:56
  What brought her here where Dan and I are going to touch on the
• 1:59
  markets as always, but we wanted to bring Samantha on as well to
• 2:03
  kind of get an introduction in because she's going to be
• 2:05
  starting to cycle into some of the podcast every once in a
• 2:08
  while. So we're excited to welcome you
• 2:10
  to the team. Samantha, if you could just take
• 2:12
  it away and share a little bit more about yourself and kind of
• 2:14
  what brought you here. Yeah.
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  Thanks so much for having me. My name is Samantha Kozarite.
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  As you mentioned, we run a Cal calf operation here in Northwest
• 2:22
  Kansas. We background all of our cabs
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  and then we also have a trucking and hey operation and do quite a
• 2:28
  bit of farming on the side. So kind of what brought me to
• 2:31
  LRP is just seeing the markets and the volatility and the
• 2:35
  unpredictability. It's just something where, you
• 2:38
  know, minimizing your risk where you can.
• 2:40
  As a cattle producer myself, I would never promote something
• 2:43
  that I didn't believe 100% in, so it's just something I'm very
• 2:47
  excited to be a part of and promoting and to help producers
• 2:51
  minimize their risk. Absolutely.
• 2:53
  Well, welcome to the team, Samantha.
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  We are so excited to have you. Dan, are, are you excited to
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  have someone come on and take a little bit of the pressure off
• 3:02
  of you all the time now? Absolutely.
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  I mean, my shoulders are starting to wear out from the
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  way to the world. Yeah, yeah.
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  I think she's going to be a great addition.
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  She can handle everything I can. Thank you.
• 3:13
  Well, perfect. Yeah.
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  Dan, I need Samantha. Like Samantha, one of your jobs
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  working with Dan is also going to be to check his ego every
• 3:24
  once in a while, and he's not carrying the weight of the world
• 3:27
  on his shoulders. Some of the other guys informed
• 3:29
  me on that last week. Well, good.
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  I'm glad you feel well well prepared for all of that as
• 3:34
  well. Well.
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  Dan, I'm excited to have someone else on here that can make in
• 3:39
  front of you with me and it is going to be great.
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  It's. Going to be great, very
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  exciting, very. Exciting AG team.
• 3:45
  Yeah, Keep me up. Go ahead.
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  Put me down. You bet.
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  Oh. Geez, hey, these Kansas girls,
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  we, we got to stick together. What?
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  What can I say for sure? For sure.
• 3:57
  All right. Question Are we Kansas and K
• 4:00
  State or who are we rooting for between both of you here?
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  You know, I'm not a big Kansas fan.
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  A lot of my family was born and raised in Colorado.
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  I'm a I'm a Broncos fan. Yeah.
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  I think that I'm going to need a minute Kids under Kansas
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  people's skin a little. Bit you do live in western
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  Kansas, so I do understand a little bit.
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  Yeah, close. Because you are probably closer
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  to Colorado than you are like Kansas City, but.
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  Yeah, yeah. Don't really keep up with the
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  Broncos as much as we used to, but definitely I.
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  Wonder why they kind of suck right now.
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  Not doing very good, but more so on the college football side of
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  things looking like in Colorado State.
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  Colorado University. Did I just like stir the pot?
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  I think that was his idea. Yeah, I think that was He's
• 4:50
  trying to pit US against each other.
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  OK, all right, Go walk. I'm.
• 4:55
  Going to need a minute to recover from that.
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  It's OK, It's OK. I I forgive you in advance.
• 5:02
  It's all right. We can have different.
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  Are you a Chiefs fan, though? That's what we really need to
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  address. Yes.
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  OK, I'm I'm totally on the other side.
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  Yes, K State football and Chiefs football all the way.
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  It can be right there we're. Doing too hot right now so we're
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  just not going to talk about that we're going to remember
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  that there is still opportunity for growth in all aspects.
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  I did we were funny story we were going to church on Sunday
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  and driving along. I was driving.
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  Our path to church goes by the stadium.
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  Well, Sunday morning they do film on Sunday mornings.
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  Well, we were going to the 8:00 AM service, so we were driving
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  by about 7:30. And so the boys were walking in,
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  and I didn't roll my window down, but I did yell.
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  Maybe you should go in there and learn how to play football.
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  I can get. Behind that, as we were driving
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  by, my husband kind of was like, we're on our way to church, take
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  it down, it's like. I can repent my sins when I get.
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  There exactly. Yes, quite fun.
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  I have nothing to this. I have nothing which is opened
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  up a can of worms. You did.
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  You did open up the can of worms.
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  You absolutely did well, another can of worms that we can open
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  up. Dan, what are the markets doing?
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  What is going on in that world right now?
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  Markets are, I guess you'd call a little bit bipolar, chopping
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  back and forth, beating everybody up.
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  Volatility is full, Max. Other than yesterday's quiet day
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  down a buck, it's been up to 3-4, down 568, up to 3-4, down
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  568. Especially in the theaters,
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  that's been pretty brutal. Managed money's exiting those
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  positions, which is not a surprise given Corns looks like
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  it's made-up bottom for the year and and on its way higher.
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  So feed your cattle set back. I have to wonder watching this
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  action. Yet part of this is because the
• 7:01
  cattle on feed this Friday. And if we look at the numbers
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  blindly, you know, it looks like a pretty bearish report having
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  the estimates say we we'll place more cattle than what we killed.
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  So that's obviously the first Big Bear sign.
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  And we did have one less marketing day.
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  So that's a factor and gets us more back to, you know,
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  placements pretty par with marketing.
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  So inevitably, you know, August isn't a time frame where you're
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  going to massively increase the number of cattle on feed.
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  But here, you know, you get past September, you start getting
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  towards that fall cap run that's going to change things.
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  So we'll see what happens. I know a lot of guys, they
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  shipped their cattle, they sold their cattle early because they
• 7:42
  didn't want to miss the markets. That that could be a factor as
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  we come in, you know, post harvest farmers are climbing out
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  of the combine and want to do something with their cheek corn.
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  So that might be a factor. But overall it appears like on
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  this Friday's cattle on feed, it was a big factor in the last,
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  you know, 2-3 weeks of downtrend.
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  How we trade after this report is it's going to kind of decide
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  our faith if we just started a long term bear trend or if we're
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  actually going to continue this bowl rebound and go set in your
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  eyes. Excuse me, overall beef is
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  sliding too pretty seasonal. As we mentioned, it's you know,
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  hamburger helper and tater tot casserole season.
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  It's not rib eyes and and sirloins.
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  It's it's just let's get the kids to school when we get home.
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  Let's get their homework done, cook a cheap easy supper and
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  move on with life. So we don't have a lot to look
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  forward to until we get all the way to Christmas.
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  When it comes to beef demand, some of those wholesalers, some
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  retailers starting to buy those rib rolls we need for Christmas
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  demand. So that that's beginning a
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  little bit, you know, pretty normal starts about this time of
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  year as we see the price of soft.
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  And so hopefully that that Christmas demand is truly there
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  at these higher prices so that we can maintain this thing.
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  And then as we get past Christmas and New Year's, we
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  start looking forward to grilling season.
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  So overall, it's it's a pretty seasonal dip.
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  Typically this dip takes place between September 1st, you know,
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  Labor Day all the way to the first part of the October.
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  So the big question now that we've taken quite a bit off box
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  beef prices and we're got that choice back in the three
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  hundreds is can we rebound or can we hold three 85390, which
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  would be a normal percentage wise seasonal dip.
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  So if we can't hold 385 to 390, we might be in some trouble
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  because that's showing a shift in consumers.
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  So we don't want to see a step below 380 especially that might
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  make a longer term projection change from, you know, a
• 9:44
  Christmas rally to now all of a sudden we're looking for just
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  maintaining 353-6370. You know, what does that look
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  like? Beef has been talked about a lot
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  from President Trump. Quick one liners, pretty much it
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  never news outlet is talking about it.
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  So that's not supportive for beef crises.
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  But like I said, it's it's not typical.
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  Typically a strong month for demand.
• 10:11
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  Love Texas? Yeah.
• 10:41
  I'm ready for beef to be out of the news cycle a little bit.
• 10:44
  It's one of those situations where we like good news.
• 10:49
  But I think I would just like to stay out of it all together
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  because I think when you start talking about beef, when you
• 10:55
  start talking about cattle on these national news markets, it
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  it's just a cycle, right? Because they start talking about
• 11:03
  beef prices, they open that can of worms and then now everyone's
• 11:07
  talking about it and then they can't stop talking about it
• 11:11
  until the quote UN quote problem gets solved for their consumers
• 11:16
  that are listening. Because now people care and
• 11:18
  people notice a little bit more, which I mean, rightfully so.
• 11:22
  We've seen some pretty drastic changes as far as prices on the
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  counter going recently and consumers are concerned.
• 11:28
  But at the same time, I'm like, just get us out of the news.
• 11:31
  Can can we cancel, cancel that edition, please?
• 11:34
  Thank you. I agree, Lauren, Speculation is
• 11:37
  really playing kind of a tug of rope on this market.
• 11:40
  Yeah, it definitely is. What are our thoughts on the
• 11:42
  feeder cattle market right now? I was talking to some people
• 11:45
  last week and I feel like we're finally starting to kind of see
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  the trickling effects of the southern border being closed,
• 11:51
  which we knew was coming, right? We've been seeing the effects
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  for a few months now, but I feel like we're really starting to
• 11:56
  kind of see it numbers being lower, prices being higher.
• 11:59
  What are our thoughts on that? Yeah, I'm in volume barns with
• 12:03
  reports of the indexes, it's once again drastically lower.
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  So and a lot of times you're Mexicans don't go through those
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  sale barns. But anyways, nonetheless, the
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  numbers aren't there. We're proving that in and that's
• 12:16
  getting reflected in your Catalan feed reports too.
• 12:19
  So, you know, in the last week, I've seen prices soften just a
• 12:23
  touch. I mean, they're not falling out
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  of bed. Certain weight classes are
• 12:26
  dropping harder than other weight classes.
• 12:27
  You know, your big, big 910 weights here, they're strong.
• 12:31
  They're steam ahead, guys want to hit that winter time market,
• 12:35
  you know, burn off some corn quick this winter and and move
• 12:39
  on. As far as the light cabs,
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  they're starting to soften a little bit.
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  You know, supplies are more readily available.
• 12:46
  You know, it's BBQ season, it's every sale barns, you know,
• 12:49
  appreciation dinner. So that always comes with a few
• 12:52
  extra head. But overall, when we look at the
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  supply, like you mentioned, Mexico still shut off.
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  Other people here domestically have sold their Cabs early.
• 13:01
  You know, the, the supply is not growing.
• 13:03
  You know, there's just no wall of cattle coming.
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  So I don't, you know, I, I talked to a guy last night and
• 13:09
  his question is when, when do feeders take the big hit?
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  My opinion is feeders are going to stay high until we see fat
• 13:18
  cattle. I apologize.
• 13:20
  Feeders are going to stay high until we see these speed yards
• 13:22
  start losing money. Well, right now you've got a lot
• 13:25
  of cattle that are getting sold with 220 break evens.
• 13:28
  We're selling 2:35 to 2:45. You know, in the last two months
• 13:31
  they're just making a killing. So if those guys are profitable,
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  they're going to keep turning around and buying back figures
• 13:37
  no matter what they cost. If they start losing money on
• 13:40
  this next turn, the breaks even at 24245 to there's some that
• 13:44
  touched 250. Those are the ones you know that
• 13:47
  following turn could get get hammered on the feeder cattle
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  side. Yeah, definitely.
• 13:51
  I agree with that sentiment 100%.
• 13:54
  It's a volatile time in the cattle industry.
• 13:57
  And like you said, I think the best way to describe the markets
• 14:00
  right now is bipolar. I couldn't have come up with a
• 14:03
  better single word to describe what we're seeing right now
• 14:07
  because we were coming on last week and it hadn't been a good
• 14:10
  couple weeks since you and I had last talked to Dan.
• 14:13
  And now we're coming on again and it's like, well, it's a
• 14:16
  freaking roller coaster over here. 5 steps forward, forward,
• 14:19
  10 steps back type of situation. And then we just, we don't
• 14:23
  really know what the next day is going to bring as far as the
• 14:26
  volatility goes and as far as manage money and people pulling
• 14:29
  out and putting in and all of the things like it's just, it's
• 14:32
  all over the place. And I think it just goes back to
• 14:36
  the time that we've talked, the thing that we've talked about a
• 14:38
  million Times Now of the markets volatile and unfortunately we
• 14:43
  don't have that crystal ball that says, hey, this is what we
• 14:46
  can expect over the next few months.
• 14:48
  But as we've kind of gone over the past three weeks, Dan, what
• 14:52
  are your thoughts going out and finishing up the rest of
• 14:54
  September? I think produces need to look at
• 14:57
  feet needs. You know, harvest is starting a
• 14:59
  bit early up here in the Corn Belt and yields are not what
• 15:03
  everybody thought they were from driving down the road.
• 15:05
  Potential was pretty big starting out.
• 15:08
  The common theme here from what I'm hearing is a lot of 20 to
• 15:12
  4050 bushel back from last year. Some guys are, you know,
• 15:16
  depending on fungicide. We had a big problem with
• 15:18
  Southern rust up here. There's a common theme is, you
• 15:22
  know, guys who didn't spray fungicide or 40 to 50 bushel
• 15:26
  under APH. It's pretty ugly.
• 15:28
  But as a whole, most people did, I would say.
• 15:30
  And you're still not going to create this massive crop we had
• 15:33
  last year. Last week's grain report show
• 15:37
  the USDA actually reducing the yield, which in my opinion was a
• 15:41
  bit early. So we're probably going to see
• 15:43
  even a larger reduction later on this year end of January.
• 15:48
  We also saw them increase the acres.
• 15:51
  Long story short, they're they're going to play with the
• 15:53
  numbers, but at the end of the day, farmers aren't going to be
• 15:58
  that willing to sell bushels until they can figure out their
• 16:01
  crop, what their crop insurance is paying or they they've got to
• 16:04
  try like heck to be profitable with this crop, even though it's
• 16:07
  a short crop and price of the depressed.
• 16:09
  So if if it is a short crop for some, you know, will they have
• 16:14
  the storage? Are they going to shut the door,
• 16:16
  lock the bin and walk away until we get to December, January.
• 16:20
  I think we need to be proactively managing our feed
• 16:24
  rest. Do I think corns going north of
• 16:25
  $5 personally, no, I don't think that.
• 16:29
  But could you see that move to 45470?
• 16:32
  Absolutely. So depending on your feed needs
• 16:35
  here in the next several months, I'd be looking at getting some
• 16:38
  book. Yeah, definitely.
• 16:39
  And like you were just talking about the fact too, that corn is
• 16:42
  kind of hit its bottom. So be watching it and get it.
• 16:45
  Get it now. Don't don't wait until you
• 16:48
  finally need it and corn is rising back up again.
• 16:52
  Any other closing thoughts from either of you as we round out
• 16:55
  the podcast today? Anything else that we didn't hit
• 16:58
  on as far as the markets go or just the industry in general?
• 17:01
  No, I think we're good. Yeah.
• 17:04
  Awesome, awesome. Well, Samantha, Dan, as always,
• 17:07
  thank you so much for your time. To all of our listeners out
• 17:10
  there, we talked about the volatility at the hot and cold,
• 17:14
  the bipolarness of the markets this week.
• 17:17
  Make sure that you go check out those show notes down below and
• 17:20
  get a hold of our Cattle USA insurance team.
• 17:22
  They will be able to give you the most updated LRP rates and
• 17:26
  just chat with you with what works best for your operation.
• 17:29
  Because the reality of it is, is every operation is different and
• 17:32
  everything is going to look different for everyone that
• 17:34
  gives them a call. So it never hurts to just give
• 17:37
  them a call, get your answers, get your questions answered and
• 17:41
  all of the things like that. So check out those show notes,
• 17:43
  follow that link and get a hold of our team to help with the
• 17:46
  volatility of this crazy cattle industry that we are a part of
• 17:50
  right now. Both of you, thank you for your
• 17:52
  time today. Coming on Samantha, we are well.
• 17:54
  We are excited to welcome you to the team.
• 17:57
  Dan, thank you for your knowledge as always and for
• 17:59
  starting the pot a little bit. Now Samantha and I have
• 18:02
  something interesting to talk about.
• 18:03
  So much appreciation, appreciate it.
• 18:05
  To all of our listeners out there.
• 18:07
  We will see you all tomorrow on another episode.
• 18:09
  Have a good one y'all.