Latest / CattleUSA Daily / 194: Government Pressure, Market Chaos, and the Small Producer’s Fight with John Campbell

Transcript

194: Government Pressure, Market Chaos, and the Small Producer’s Fight with John Campbell · CattleUSA Daily

• 0:00
  In today's episode with John Campbell, we are breaking down
• 0:03
  the cattle market, the whiplash that has happened this week.
• 0:06
  And then John shares some personal anecdotes about just
• 0:09
  what is happening in the world of the cattle market right now,
• 0:12
  what is affecting these cattle markets.
• 0:14
  And then a personal story about an experience that he had at his
• 0:17
  auction this past week as well that I know is going to relate
• 0:20
  to a lot of you producers out there.
• 0:22
  Before we jump into this podcast episode, if you're watching on
• 0:24
  YouTube, please take a second to like and subscribe to this
• 0:28
  podcast. We would really appreciate it
• 0:29
  here with team. If you're listening on any of
• 0:31
  our podcasting platforms, make sure that you take a second to
• 0:34
  make sure you're following the show and go right and review it.
• 0:37
  We would really appreciate that here at the team as well.
• 0:39
  And without further ado, let's go ahead and hear from John.
• 0:46
  Welcome to the Cattle USA Daily Podcast, your go to source for
• 0:49
  the latest livestock markets, industry insights and the
• 0:52
  updates shaping agriculture today.
• 0:54
  I'm your host Lauren Moylan, a passionate advocate for
• 0:57
  agriculture, here to keep you informed and connected.
• 1:00
  Now let's dive into today's episode.
• 1:09
  John, welcome back to the podcast.
• 1:12
  We are both in new locations today.
• 1:15
  I am camped out in a hotel room. You're in your vehicle, got a
• 1:20
  spotlight shining on you. We're not going to.
• 1:23
  We don't have to tell the audience how we got to the
• 1:25
  lighting situation that we're in.
• 1:27
  But hey, we're here. We're going to have a great
• 1:30
  podcast. How?
• 1:31
  How are you? Bad.
• 1:33
  Terrific. I am along the side of the road
• 1:36
  at Lookout Mountain on I-70 headed to Meeker Co, which is
• 1:44
  about 250 miles yet to go from where I'm at, so I'm about
• 1:49
  halfway. Hey, there you go.
• 1:52
  That's that's something to look forward to.
• 1:54
  At least we're on positive. We're on the up and up.
• 1:57
  We love it. We love it.
• 1:59
  Well, what what happened in Lahana this week?
• 2:01
  John? Give us the Brundown.
• 2:03
  Well, 47184 cattle here on Monday and and as typical why we
• 2:11
  we only we drew the right straw this time.
• 2:14
  Nearly got back to where we were before all the bad news here in
• 2:20
  La Jolla. The lightweight steer cabs, $5
• 2:23
  up to 570. We had three weights on up to
• 2:26
  620. I thought we put, you know, 15
• 2:30
  to 25 bucks back on the heavy steer cabs from 395 up to five O
• 2:37
  6 and Heffers. Man, oh man, the little
• 2:40
  lightweights. I'd say we got it all put back
• 2:43
  on 4 to $5 in spots. They were 50 bucks higher than
• 2:49
  they were the week before with a heavyweight Heifer calves 10 to
• 2:54
  15 higher 380 to 4:15. We did have some 4 weight
• 2:58
  heifers on up to 466. A few representative sales that
• 3:04
  were out there Monday. Here's some 310 LB steers at
• 3:08
  six, 24150 LB black steers at 521 weighing 4 1/2.
• 3:14
  Their Big Brothers weighed 515 at 4:55.
• 3:19
  Over on the Heffer side, why some 375 LB effers?
• 3:24
  They brought $5 a pound and again I told you about those 410
• 3:29
  LB black effers at 466 and we had some 5 weight effers on up
• 3:34
  north of $4 this week at four O 7 1/2.
• 3:40
  You get into the kind of stalker heifers.
• 3:42
  Those 556 weight heifers I bought 12 to $20 higher, 345 up
• 3:50
  to 351. Those big 650 weight on up cabs
• 3:56
  4 to 8 higher on the heifers, 310 up to 325.
• 4:02
  And you know, here's some 550 weight heifers at 3:00, 81 we
• 4:07
  had 6 weight heifers on up to 360 and some big 7 weight heifer
• 4:13
  cabs to 315. The same held true in the steer
• 4:17
  side. You know 1015 better.
• 4:20
  Some 550 weight steers back up to 426.
• 4:24
  We were back to selling the front end of the six weight
• 4:27
  steers north again of $4.00, four to 4:15 and some big 7
• 4:33
  weight steers on up to 350. So Monday.
• 4:38
  Why? You know, you'd have thought
• 4:41
  happy days are here again. You would have thought it this
• 4:44
  week. It has been a whiplash of the
• 4:47
  past couple weeks, that is for darn sure.
• 4:50
  So it's a trend we're seeing across the board, across all the
• 4:52
  winter livestock sale barns. What are what are we seeing in
• 4:56
  Pratt and Dodge and everywhere else right now too?
• 4:59
  Right, exactly. Like I said, it lasted through
• 5:02
  Monday and then Tuesday, Wednesday, why?
• 5:05
  We were back to the same deal and we played take away with
• 5:09
  Wednesday being back down the limit and Dodge City with 3000
• 5:14
  cattle. Then they called their deal 5 to
• 5:17
  20 lower, you know just two days after ours but two big down days
• 5:22
  again in the board their best 4 weight calves bring like 488
• 5:28
  when we were selling 4 weight steers up to 521 and Dodge had a
• 5:33
  decent volume, you know over 3000 cattle 5 weights to 465 in
• 5:39
  Dodge City. And you know their best 6 weight
• 5:42
  cattle brought 369 which two days earlier, not that we did
• 5:47
  anything special, but you know, we could get past $4.00 a pound
• 5:52
  and big 7 weight steers in Dodge up to 357.
• 5:57
  Over on the heifer side they had four weight heifers.
• 6:00
  Four O 5 was as high as they got 5 weights to 89 and six weights
• 6:06
  up to 336. Now Riverton was on Tuesday so
• 6:11
  they didn't have to hit the bad news of Wednesday.
• 6:15
  Markets just off a little bit on Tuesday and and you know
• 6:20
  Riverton with 34100 cattle still had an outstanding sale. 4
• 6:25
  weights at 597, 5 weights AT5O2 and six weights on up to 419,
• 6:33
  which would have resembled our market, you know, called called
• 6:37
  their Hefford cabs 35 to 65 higher.
• 6:41
  This is the government guy that's calling it.
• 6:45
  Just how you know how great things were Monday, Tuesday, and
• 6:49
  then just to fall off a Cliff the end of the week.
• 6:52
  But kind of a recap. Four way to heifers in Riverton,
• 6:55
  WY AT4875 weight effers much like ours north of $4.00 up to
• 7:02
  four O 6 and they had some replacement quality.
• 7:06
  Why, you know, £350 or excuse me, 6 weight effers replacement
• 7:12
  kind up to 350 a pound. So you know, they they got along
• 7:17
  good. But well, I've had a lot of
• 7:20
  calls say, you know, it sure looked great there on Monday and
• 7:23
  then I've had to break the bad news to him as to, you know,
• 7:27
  what went on Wednesday, Thursday.
• 7:29
  So I don't know. It's a it is treacherous times.
• 7:33
  I can't keep my head in like a vertical position right now
• 7:38
  because it's just getting whiplash all the time from this
• 7:41
  Dang market. Yeah.
• 7:43
  Oh, you're you're right. Everyone is in the same boat.
• 7:47
  We're all like, yay, we're we're doing good again.
• 7:50
  And then we're like, shit, someone had to say something,
• 7:53
  right? Like.
• 7:55
  We kind of, I couldn't have said it better myself, Warren.
• 7:59
  I knew you had some adjectives in there to really describe
• 8:02
  what's going on. I just had to had to squeeze
• 8:05
  them out of. You just had to pry them out of
• 8:06
  me, John. I tell you what, they are in
• 8:08
  there. Son of a gun.
• 8:12
  Jeez. Well what are your thoughts on
• 8:15
  why? Like what?
• 8:18
  I mean, there's so much going on in the world right now.
• 8:21
  Like cattle can't get out of the damn national news.
• 8:26
  We can't stop hearing about this and this and this and this.
• 8:29
  What are what are your thoughts? What's going on and what's
• 8:34
  actually affecting these markets?
• 8:35
  Well, before I get into my rant this week, why I do owe an
• 8:40
  apology to my friend Jack Payne. If you watch this very long, you
• 8:45
  know that my mouth is not only larger, but it gets way ahead of
• 8:50
  my brain sometime. He is from Nevada and I know
• 8:54
  that well. And I think I said Nebraska in
• 8:58
  one of my big surges of superior intelligence there.
• 9:02
  So qualify that and apologize to my friend Jack Payne.
• 9:07
  But you know, Lauren, we're we're really trapped.
• 9:10
  It seems like, you know, by by our own government.
• 9:13
  You know, they they think they want to fix the beef supply by
• 9:19
  supposedly fixing it. They create a another problem
• 9:24
  and they've done it for years in the in the grain and to the grow
• 9:30
  cop farmers. Why government incentivizes the
• 9:33
  farmer to grow more corn, more soybeans, and then the farmer
• 9:38
  overproduces and causing the price to go back down and they
• 9:43
  come back in and try to fix the problem that their last fix
• 9:48
  created. So just to tell you a little bit
• 9:50
  about what the government has done to it.
• 9:53
  And we're just really getting a taste of it in the cattle
• 9:56
  business. And most of us, to reiterate
• 10:00
  everyone's thought, we really wish they they would just stay
• 10:03
  out of it, you know, and we're in a low in, in beef production.
• 10:07
  So the government chooses to fill the void in supplying
• 10:12
  foreign beef into the market, and we become an importer of
• 10:16
  food and the government outsources food.
• 10:19
  Why? It really hurts American
• 10:22
  producers. You know, when the cattle got
• 10:25
  short kind of an explanation, You know, we saw massive input
• 10:31
  of cash from all the speculators.
• 10:33
  There was a buying frenzy that took place in the cattle futures
• 10:38
  and because they were, you know, being directed that way by the
• 10:42
  huge hedge funds that's that's what's on the rise.
• 10:45
  So get in the cattle deal and then we got helped along or the
• 10:49
  futures did Mexico and Brazil tariffs, why they were perceived
• 10:54
  to the long speculators to further reduce the supply and
• 10:59
  that stimulated more speculator buying.
• 11:02
  So as the futures rose, why it allowed buyers the luxury to pay
• 11:08
  more for the cattle that they were procuring and because they
• 11:11
  could lay them off at a future month and higher prices.
• 11:15
  And the problem is that these same speculative long buyers
• 11:19
  also become speculative short sellers, as we've seen in the
• 11:25
  last three days. They have the luxury of getting
• 11:28
  out. But if you bought the physical
• 11:30
  inventory, why you you don't have that luxury?
• 11:32
  And there as producers, why, you know, we're just not really
• 11:36
  equipped to handle these huge run ups and then these huge
• 11:42
  rundowns. And as kind of a side note, why,
• 11:46
  you know, ranchers can look to the LRP's and the government
• 11:52
  that that got us into this mess does have a supplemented program
• 11:57
  where you can lock in the price and sell your unborn next spring
• 12:02
  calves. And, and we have people that you
• 12:05
  can talk to and look at that. I don't know, you know, maybe
• 12:08
  that's part of the problem too. But it might not hurt to see
• 12:12
  what levels you can protect next year's cap crop.
• 12:16
  And if you can live with that, why.
• 12:19
  Find out what it costs and at least it's it's an option to
• 12:24
  consider. Yeah, that's a common trend that
• 12:28
  I've heard a lot of different people say recently on this
• 12:32
  podcast and off the podcast just in a lot of different
• 12:35
  conversations, casual dinner conversations, everything,
• 12:38
  everyone is like really antsy about next spring and getting
• 12:43
  that calf crop protected. And the fact that we have the
• 12:46
  ability to do that, I think is something that our producers
• 12:51
  need to lean on because all the sectors within our industry,
• 12:55
  whether it be pharmaceuticals or the actual cow calf people or
• 12:59
  the retail, like there's so many different sectors of our
• 13:02
  industry that rely on producers and producers having a Goodyear.
• 13:08
  For them to then have a Goodyear, like you're not going
• 13:10
  to buy the most expensive antibiotic that you normally
• 13:14
  use. If you're having a bad year,
• 13:15
  you're going to go buy the name brand, like all of those things.
• 13:19
  So they rely so heavily on us having a Goodyear is produced
• 13:23
  producers. And so this has been a
• 13:24
  conversation at a lot of dinner tables of concern for next
• 13:27
  spring and what that's going to look like for the cash industry.
• 13:30
  Because we got rocked these past few weeks.
• 13:33
  And every time we think that we're starting to get back up on
• 13:37
  our knees, we get knocked right back down again.
• 13:39
  And it is like, I think kind of a tough reality that we've come
• 13:43
  to of like we have no control over this.
• 13:47
  We have no control over the market.
• 13:50
  And the unfortunate thing about it is, is the government keeps
• 13:53
  on stepping in, in ways in which they should not.
• 13:57
  And therefore, they're disrupting the market and ways
• 14:01
  that we couldn't necessarily predict.
• 14:03
  And so I think that that just goes back to the volatility of
• 14:06
  everything that we're seeing right now and just how much of a
• 14:08
  mess it is. And kind of what you've been
• 14:11
  saying the past few weeks, John, that we get the short end of the
• 14:14
  stick when it comes to everything there too.
• 14:17
  Right, right. No, no doubt.
• 14:19
  And I think the multimillion dollar question is, has the
• 14:25
  correction we've taken thus far going to be the norm for next
• 14:31
  spring's cap crop or do we have more down to go?
• 14:35
  Well, find out what the insurance cost and see if you're
• 14:39
  happy where you're at and you can make a living at that number
• 14:43
  and you can protect yourself for eighty 100 bucks a head.
• 14:48
  Why maybe you ought to go ahead and spend the money and buy the
• 14:51
  insurance. And if you think, Nope, we've
• 14:53
  retreated too far and fundamentals are eventually
• 14:56
  going to kick in and we're going to go right back up.
• 14:59
  Why maybe it's it, it's, it's not, not the thing for you, but
• 15:04
  kind of onto another subject. You know, over the last three
• 15:08
  weeks, I, I, I've done some math and I thought it was really
• 15:12
  interesting and, and I've known this for quite a while, but
• 15:15
  thought I would share it with people.
• 15:17
  The average seller at our auction and we, you know, this
• 15:22
  would be on volume, single day volume of 7000 cattle.
• 15:27
  So it's fairly substantial. The average consignor is less
• 15:31
  than 50 head of cattle and you know, I, I would tell you that
• 15:36
  is held true for my entire 45 years of business.
• 15:41
  I, I, I'm, I'm more than vocal a lot of times about the huge
• 15:47
  monopolies taken over in the alternative marketing
• 15:51
  agreements. And, you know, it all kind of
• 15:53
  comes to light kind of the, the, the, the thing that is a result
• 15:59
  of all of this. You know, we just recently lost
• 16:02
  a grocery store in LA Honda and, and now Walmart is the only
• 16:09
  place left. And so now I'm sitting here and
• 16:14
  man, I wish I, I, I, I had another choice.
• 16:18
  But but they're the only, they're the only game in town.
• 16:21
  And you know, I, I, I, I, like I said, I'm pretty vocal and and
• 16:27
  pretty adamant about what what I think of not only individuals,
• 16:32
  but of operations that are out there.
• 16:35
  You know, I doing their just I, I'm sure that the 44 farms
• 16:39
  people, you know, think that their Angus deal with Walmart is
• 16:44
  great and those working within the confides of the big four
• 16:48
  major Packers. I know a lot of them, they think
• 16:52
  what they're doing is great and the people behind the Eid tags
• 16:56
  think it's a great idea and check off directors think they
• 17:00
  have a great purpose. My deal is I have a completely
• 17:04
  different philosophy and I, I, I think they're wrong in terms of
• 17:11
  what it means for my business and for our, our grass root
• 17:16
  producers. You know, my business and, and
• 17:19
  passion is all based around those 50 head consignors that I
• 17:23
  just brought up and also the big independent producers why we
• 17:28
  couldn't operate without them either.
• 17:30
  And they've just figured out exactly what's happening.
• 17:34
  And my philosophy is I think competition is healthy even
• 17:38
  within my own industry. We have a great competitor right
• 17:42
  across the street from us. And you know, when, when Walmart
• 17:47
  runs your other competitor out, hell, I don't even like Walmart.
• 17:51
  You know, again, I, I, I still wish now at at the end of the
• 17:56
  day that, you know, I, I, I had another, I had another choice.
• 18:01
  But you know, I, I, I deal with the, the little guy that doesn't
• 18:07
  want a Walmart 44 farms bull. And because he just because now
• 18:14
  I guess they have a fart EPD that allows him if he buys one
• 18:19
  of those bulls, he can be in the methane alliance.
• 18:22
  And even though he's just, they use $4.8 million, his very own
• 18:27
  tax dollars went into the program.
• 18:30
  And the producers I deal with, or you know, they're they're
• 18:34
  really don't want to be told what, what kind of cookie cutter
• 18:37
  cattle are they're going to have to run or what kind of
• 18:41
  management practice they're going to have to follow or be
• 18:46
  lectured on humane treatment of, of cattle and attend classes on
• 18:51
  how to be a good steward of the land, what shots to give their
• 18:56
  cattle. And so they can qualify for some
• 18:58
  program. And they sure as hell are not
• 19:00
  going to sign up and pay for a government issued Eid tag.
• 19:06
  The person I just described is, you know, really I think the
• 19:12
  core of my business and worth worth protecting.
• 19:16
  In closing, I would tell you I have AI have a little short
• 19:20
  story. Monday during the sale and we
• 19:24
  had 40, some 100 cattle and I went over and sat by a a lady
• 19:29
  that had 17 calves to sell and her operation has a story to
• 19:35
  tell and you know, it deserves to be heard.
• 19:39
  She I think still has a place in, in our industry, even though
• 19:44
  she's not going to probably buy a 10,000 dollar 44 farms bull
• 19:50
  and she doesn't have the facility labor or whereabouts to
• 19:54
  buy, apply and record, you know, one of her all of her cattle's
• 19:59
  whereabouts and how many cattle she owns through a government
• 20:03
  mandated EI program. She she can't do it.
• 20:08
  You know she never going to form a AMA with a Packer or a ranch
• 20:12
  to rail with some beef board alliance still.
• 20:16
  You know she's waiting for her mandatory beef check off
• 20:21
  donation to trickle down and 70% of it that goes to the NCBA to
• 20:27
  make a difference in her bottom line.
• 20:29
  She's still waiting for all of that and maybe, I don't know,
• 20:33
  maybe she needs to be wiped out. Maybe she doesn't have a place
• 20:36
  in our business and doesn't fit into the mold that we've
• 20:40
  created. So let's, let's, let's, shit can
• 20:43
  all of them. And I can tell you this, she
• 20:46
  cashed a $30,000 check and that's still a lot of money to
• 20:52
  most people. And over the years, I've watched
• 20:55
  a lot of those 15 head deals turn into 100 head deals.
• 21:00
  So you have to excuse me if if you know, I cuss all those that
• 21:07
  have a vertically integrated agenda that has no time for the
• 21:12
  voice of those with the 15 head. You know, kind of a fun fact,
• 21:16
  there's 800,000 feet producers in the US and supposedly we have
• 21:22
  3% that claim to be our voice. And I guess I'm with the 15 head
• 21:30
  people that create the other 97% of the population.
• 21:34
  So that's, that's my, that's my play on the support of the
• 21:39
  little independent producers. By God, we need them and they
• 21:43
  keep our business healthy. And they have provided me a
• 21:46
  future in the auction business. And by God, those are the ones
• 21:51
  I'm going to go to bat for. I could not agree more, John.
• 21:54
  And I think that sharing that woman's story so perfectly puts
• 21:58
  it and it's so relatable to SO many people in our industry that
• 22:03
  do make an impact. And I think so often they get
• 22:06
  told that they are so miniscule of an amount that their impact
• 22:10
  doesn't matter. And John and I are here to say
• 22:13
  that it does. It does matter.
• 22:15
  We do need our smaller producers just as much as we need our
• 22:18
  larger operations as well. So you put that perfectly, John.
• 22:22
  And I think that is a great place to wrap us up for today.
• 22:26
  Thank you for your thoughts, your insight, all of the things
• 22:29
  for pulling over on the side of the highway to do a podcast with
• 22:33
  us, and we will see you next week on another episode.
• 22:37
  To all of our listeners, we'll see you next week too.
• 22:40
  This is coming out on Friday, so we'll see y'all on Monday.
• 22:42
  Have a great rest of your weekend and we'll see y'all
• 22:45
  later.