Latest / CattleUSA Daily / 164: How Screwworm and Government Action Could Shake the Cattle Market with John Campbell

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164: How Screwworm and Government Action Could Shake the Cattle Market with John Campbell · CattleUSA Daily

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In today's episode with John, we are talking all things at Cattle
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market, what has happened in La Hana over the past week over
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some other markets across the Midwest, Wyoming, other markets
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that we have seen touched kind of what what's going on in the
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world right now. And John and I touch on a very
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hot topic in our industry and that is Screwworm.
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We talk everything that has been released this week.
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We are recording this Thursday, Thursday morning at 7:00 AM
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Central. So if anything gets released
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Thursday throughout the day, this podcast episode is coming
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out Friday. So just wanted to make sure that
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you guys know that we're recording this first thing
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Thursday and if anything has come out between now and Friday
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that has changed anything that we've said, Just kind of take
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that into consideration as well if those reports have come out
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on what the USD as plan is. But John and I are chatting
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everything that has been released so far, how it has
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affected the market thus far, how it affected the market on
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Monday, and just our thoughts going forward.
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What can we anticipate and expect as we move through this?
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And we also touch on the meat market a little bit as well.
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So we touch on all of those things in this episode.
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But before we jump into that episode with John, if you guys
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could take a second to like subscribe, rate and review this
1:18
podcast, we would really appreciate it here at the team.
1:21
And without further ado, let's go ahead and hop into this
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episode with John. Welcome to the Cattle USA Daily
1:30
podcast. Your go to source.
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For the latest livestock markets, industry insights and
1:35
the updates shaping agriculture today, I'm your host Lauren
1:39
Moylan, a passionate advocate for agriculture, here to keep
1:42
you informed and connected. Now let's dive into today's
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episode. John, welcome back to the
1:54
podcast. How was everything in Lahana
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this week? How's life in general Treat And
2:00
yeah, it's, it's been a minute. Yeah, No, everything was good.
2:04
You know, the market really jumped this week.
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We're, you know, we don't necessarily like it these huge
2:09
moves that we're seeing and boy, they just transcend right, right
2:12
over into the cash. But we had a really in Lahana
2:16
kind of our first pretty decent run of calves and and we'll
2:20
start getting a few more calves every week now and our volume
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will kind of really jump, jump back up there.
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But you know 3 weight calves back bringing you know 5 1/2 up
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to I think we had some 350 weight calves bring six O 7 and
2:35
4 weight calves. Both of them would bring from
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4:55 to 5:15. Incidentally, we do start our
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special Monday calf sales here in Lahana on October the 20th.
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But look for like I said, more, more cabs showing up here about
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every week. Back to the market, 5 weight
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steer cabs kind of $4.00 up to I think the best we did was 454 on
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the heifer side of things. The little 3 weight effers kind
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of 450 to five O 5. The four weights $4.00 to 446,
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five weight effers, 395 up to a load of some really nice 5
3:16
weight effers at at 4:28. Get into the big heavy heifer
3:20
cabs. Like we talked those 550 to 650
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weight heifer, what I'm calling a stalker heifer.
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Wow. You know 7810 as much as 10
3:31
higher this week. Those 556 weight heifer is kind
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of 360 up to 388. We had some 7 weight ball and
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calves heifer cabs up to 345. Get into the yearling trade, it
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was mostly kind of 335 to 366. We did have some big 1000 LB
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open air for the $3. Not a big selection of feeding
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steers, but quite a few of those handy weight steers.
4:01
Again, 5 1/2 to 6 1/2 weight steers.
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I thought five to seven. Better still all of them trading
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over $4.00 for the 435 so that that's kind of what happened in
4:15
in Lana this week. How about what happened just
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kind of in the region across the other winter livestock auctions
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or just auctions in general what are you kind of seeing there
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Yeah kind of around the horn yesterday.
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You know, we, we had two, they sold it off a little bit
4:30
yesterday. And, and I'm, I'm, I always tend
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to make this relative to what the futures are doing because it
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seems like they have more and more of an impact all the time
4:40
with at these levels, more and more people are laying cattle
4:44
off, more people are choosing LRP insurance and course those
4:49
things tied to the commodity. So whether we like them or not,
4:52
we, we have to kind of watch them.
4:54
But boy, you could really see the reflection of it in Dodge,
4:57
especially on their bigger cattle where they had some
5:00
numbers. I thought their CAF deal pretty
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much similar to ours. 5 weight stairs up to 465, six weights to
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four O 9. And but boy, where you could
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really see it was on the bigger cattle.
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They had some 8 weight steers. I think there was 100 and some
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of them at 384 way in north of eight and some big 9 weight
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stairs at 368. Dodge City effers 6 weight
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effers at 368, 7 weight efforts at 361 and some big 875 LB
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efforts at 324. Pratt is today Thursday, but
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even last week I I, I thought they were impressive.
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You know, 5 and a quarter weight steers at 485 sold some 6 weight
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cattle, 417, which would be about as high as anything sold
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this week. They did have one set of shark
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heifers that weighed 575 there in Pratt last week that brought
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392 1/2 I thought really impressive. 680 weight efforts
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at 3:59 and some big 8 weight efforts at 337.
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Salina again last week. What are livestock Salina 5
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weight steers up to 490. So you're, you're kind of get
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the the pattern 6 weight steers at 4:20.
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They did have some seven way cattle north of $4.00 in Salina
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and and their Halford deal really pretty much like Prada.
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I I thought 6 weight efforts at 368 and 775 at 340-8831 at 336
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1/2. A lot of people don't realize,
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but we also have the auction in Riverton, WY.
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You know, Jeff Brown does a great job up there.
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They had some 685 LB stairs at 4:15 weighing right up against 7
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which which would be really impressive. 5 weight heifers at
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4:10, 6/27 at 376 on the heifer side.
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And then they had some big 7 weight heifers, Clarenton,
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Riverton, WY at 365 S All in all the deal.
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You know, after you kind of think we've we've tipped a down
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boy see look at the eyes on that side of a gun.
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I know, I know they're massive. They're bigger than those are
7:26
headlight eyes there now. Yeah, yeah.
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It seems like I had a dog look just like that one time.
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But anyway, just about the time you think it's, you know, going
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to turn over why man, here we come roaring back.
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And and so, you know I kind of stay with my original forecast.
7:45
I I think as we get into these numbers, why demand just going
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to stay great and we'll see more and more people getting in the
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market every week on these cabs. Yeah, it's an exciting time in
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the cattle market right now. Exciting time, but also trying
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time. There's some things hitting the
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news right now. There's some just a lot going on
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in the world. Let's talk screwworm.
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John, I want to hear your thoughts, which, you know, I may
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regret. I fully acknowledge that I may
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at some point in this conversation regret opening this
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can of worms, but I'm going to open it because I'm worms it is
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and and I'll try to tone it down, but you know, the the
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futures moved up up the limit Monday.
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Yep, in response, those guys know what ahead of everybody
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else, which doesn't take long to figure that out limit up on
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Monday because the Mexican screwworm why within 70 miles of
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of Texas and it's really interesting.
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We have two completely different reactions within our dynamic.
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You know you hear you got Texas ranchers and Texas feed lot guys
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and and shit they're wanting to puke at having them that close.
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You know what I mean? I mean, we're 70 miles from
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Texas and so they're just sick. And and, and then you have the
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other side of the spectrum where we got, you know, commodity
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traders. Hell, they're passing the Crown
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Royal around, you know, I mean, here boys, get ready because
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we're going to jump another $15 a hundred then because the that
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just sends a message that the borders going to be closed.
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You know that that much longer. So those are the kind of
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reactions that you see one side fundamental and a basic reaction
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from the production side of things that is a complete
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opposite of the guys trading, trading our product on the
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board. I mean, 2 completely different
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dynamics, you know, and, and, and meanwhile, the USDA while
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they're spending 100 million to slow down a Mexican problem.
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And I'm glad the USDA is there fighting the problem, but you
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know what I'm afraid of? But by the time they get 8000
10:02
flytraps checked and 100 million screw worms castrated while
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they're also working on, you know, they got to finish an 8
10:10
and a half million dollar facility in Texas, no one.
10:14
You know, the way our USDA works that we'll probably have a hard
10:18
freeze by that time or all the worms will die old age.
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But, you know, I guess the USDA shouldn't still claim the
10:25
program was, was, was a huge success.
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I thought it was. I thought it was interesting,
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you know, that while the US is down there fighting Mexico's
10:35
screwworm problem, why the Mexicans, they're using their
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money and have just become the second biggest buyer of
10:44
Brazilian beef. And you know, that 75% tariff
10:49
that from Brazil to US can pretty easily turn into a duty
10:54
free meat that can be shipped from Mexico to the US with the
10:59
US, Canada, Mexico agreement. And then, you know, we were
11:03
fighting like hell. The USDA is but then they can
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just take that meat and and turn around and Co Co mingle it with
11:11
with their product and put a label on it saying it's a
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product of the United States. And so anyway, you know, you got
11:18
the USDA. They're swatting Mexican face
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flies just down there with both hands.
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And I just hope someone's watching the other end.
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And Lauren, we we don't get screw worm from behind.
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Yeah, honest to God, I honestly, I don't disagree with anything
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that you said. There it is.
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Yeah. I don't disagree with anything
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you said. And there is the concept too
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that like, OK, great, we're putting in a sterile fly
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facility, Awesome. That's we probably need that.
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But like you said, our first freeze is coming within the next
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two months, three months, something like that.
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So we're going to have that coming.
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This fly facility isn't even supposed to be up until 2026, I
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believe like late 2026 up and running or early 2027.
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So it's going to take a while for that.
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They have released Swarm LER, which is something that they use
12:10
last time, but they've kind of developed developed it a little
12:14
bit. It's pretty much just a flytrap
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for screwworm flies and flies in general.
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So we'll see how that works, but it is very interesting.
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If I was a South Texas producer right now, I would be clenching
12:26
so hard. I like absolutely.
12:29
It's, it's terrifying because of the impact that it's going to
12:32
have on our industry. But it's also one of those
12:35
things that we've been saying for a really long time that I
12:38
don't know if this is something that we could have necessarily
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avoided happening because like you said, we've been fighting a
12:45
Mexican problem here in the United States.
12:47
Like this is something that we have been down there fighting
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because we don't want it to come up here.
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And hello, that's just Foreign Relations just in general as our
12:56
places, the United States. But it's one of those situations
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that I don't know if we could have really completely prevented
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this from happening. And we're coming across the
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border just in the 1st place. You know, they've got 100
13:07
million dollars, put up incentive money on it.
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If you can find a scalpel on a pair of tweezers small enough,
13:15
make some big bucks down there castrating those flies.
13:18
I cannot say that that is something that I see in my
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future bugs and I don't get along.
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I can't can't say that I even want to go find a pair of
13:29
tweezers and start castrating them.
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It's I can't say that's going to be in my future.
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Now, if you want a retirement gig, I can probably set you up,
13:36
John. All right, I I can set you up.
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I've got some really good tweezers here that I'll send to
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you and I can even get you one of those like, you know, those
13:43
magnifying glasses things that they have at the dentist.
13:47
There you go. Send them on your way and you
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can you can go to town on some screw worms.
13:53
Well, it'll it'll sure be interesting to see how it all
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plays out. But it it it's just these deals
13:58
my experience with with the government intervention into a
14:02
lot of things Why and and it's it's a massive undertaking, you
14:07
know, but so many times we, I mean I think it's aggravating to
14:10
everybody that we're we're throwing all this money at
14:13
somebody else's problem granted to protect the borders.
14:16
No, no question about it, you know, just like I said, but by
14:20
the time you implement everything and get it all in
14:22
place and get it going, hell, the bus is already left.
14:24
You know, they're either already here or like you said it, we've
14:28
had our hard freeze. We're probably not going to get
14:29
a hard freeze in Laredo TX and need to protect those guys.
14:34
No, no question about it, but just kind of a synopsis it isn't
14:39
it a bigger picture. We've got other problems.
14:42
I would dare say, you know, coming in on the median to, of
14:47
things. I, I don't know, you've got a
14:49
Brazilian company selling to a Brazilian company and in Mexico
14:53
that's then selling meat to the US to another Brazilian company.
14:58
Surely there's no coercion going, going on there
15:01
whatsoever. You know, and, and supposed to
15:04
be, you know, Mexico is, it is duty free.
15:07
They can send and can't, can send under the agreement.
15:10
Hell, if Mexico, Brazil's looking at 75% tariff, you know,
15:15
I think it I think it's just 25% if if Mexico sells other beef.
15:22
So so you can go through the back door and come up the South
15:25
border and, and pick up, you know, the Brazilians at 50% and
15:31
just truth, in fact, why Mexico has just moved into the number
15:37
two spot buyer of Brazilian beef.
15:39
So, you know, go, go. Yeah.
15:42
It doesn't take a mathematician to put two and two together
15:44
equals 4 on that. You're regulating.
15:48
There's somebody you know there that's supposedly overseeing all
15:51
that, but I don't know, the math tells me something different.
15:54
Yeah. No, it definitely does.
15:56
And it's definitely something that as cattle producers in the
15:59
United States and as people that we do import meat, We export a
16:04
lot of meat. We have a lot of Foreign
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Relations. You can have your thoughts on
16:08
all of those situations, but at the end of the day, US beef is
16:11
US beef and we need to really be focusing on where we're putting
16:15
our money, where we're putting our dollars as far as everything
16:19
goes, what we're funding, what we're looking at as far as like
16:22
the government regulation on things.
16:24
I think that you hit the nail on the head there of like I was
16:27
talking to Dan yesterday about this as well.
16:29
And his thoughts were pretty much the exact same.
16:32
That like we would much rather as producers, for the most part,
16:36
be able to figure this out ourselves, be able to as an
16:39
industry, as allied partners, be like, hey, here's our plan.
16:42
This is what we're going to do. This is things we're going to
16:44
start implementing into our herds, into our programs.
16:47
We're going to start retaining more heifers.
16:48
We're going to start doing this and not have the government come
16:51
in and say like, hey, you have to do this or here's the money
16:55
to do this or things like that to.
16:58
Because like you said, this ship is going to be too late.
17:01
Like you're, you're going to miss the bus by the time things
17:04
actually get figured out and through all the loops they need
17:06
to be well, right, right. Exactly.
17:09
And, and, and I don't think it in our industry, anybody likes
17:12
government intervention. And, and, and I see they're
17:15
handing to that, that they're going to help the rancher out
17:19
and, and do this and do that, whether it'll be an incentive
17:21
for heifers or cows or I haven't read the final breakdown yet.
17:26
But you know, Lorna, and I'm against the any kind of
17:29
government intervention in in anything.
17:32
But one thing that you have to appreciate, we've already got
17:35
the government intervention in the scenario we just painted
17:38
with, with the tariffs and with the just really, we've always
17:42
been on a cheap food policy. And you know, my play on the
17:47
deal is as long as you've got a government working against you
17:50
on a cheap food policy and trying to keep things down and,
17:54
and keep things affordable and, and, and, and they're injecting
17:59
their influence on the price. When they started handing out
18:03
the coupons and the checks. You know, I say the hell, get in
18:07
line, take their money because they're the ones restricting it
18:10
at the top side as much as they can or intervening it in our
18:15
business, the product labeling it is just one example of many.
18:20
Well, hell it, you know, if they want to do that and and they
18:23
they want to play the master up at the supply and demand into
18:26
things that you got to pay to play.
18:28
So hell, why not get in line if you're a producer?
18:31
And I'm again, I wish they'd throw the whole damn thing out,
18:34
but by God, you're you're in an unfair environment and and
18:40
that's their attitude. So hell, let them pay for it.
18:44
So anyway, I'm going to take their money.
18:48
I think you share the thoughts of many producers out there and
18:51
just viewpoints on this just overall ending thoughts on
18:55
screwworm the market me, anything else that you want to
18:58
add on that topic? Not, not really.
19:01
I think we we've covered it. We'll maybe next week we'll find
19:04
out some of the details of what the government's plan is to
19:07
incentivize beef producers. And, you know, I mean, we're,
19:12
we're at record levels now and we're rock along pretty good and
19:15
we've got a good product to sell.
19:17
And I think everybody would just like to say get the hell out of
19:21
the way, you know, and, and, and, and let us do our deal, you
19:24
know, because they still can't haven't yet been able to control
19:27
the weather. And like I said, it, it's, it's
19:31
the, it's the cow guy's turn. And, and, and this has been a
19:34
good shot in the arm to, to all of them And, and they really
19:38
need it. But you know, you, you can make
19:41
the argument, well, they wouldn't have shut the Mexican
19:45
deal down and the Brazilian deal on the tariffs and, and maybe we
19:50
wouldn't be at these levels. But you know, fundamentals tell
19:53
you with with the huge kills that we saw and taken so many
19:58
cows out of production because of drought and input cost back
20:01
in 22 and 23 record kills, really supply and demand would
20:07
tell you we're we're just really reaping the profits of that
20:11
fundamental. Thing that that that came along
20:16
and then all of these little other offshoots the the tariffs
20:20
and the Mexican screw are are just kind of adding a few sticks
20:24
to the fire, you know, but but fundamentally we were in great
20:28
shape and should be for a while, but we'll see when the
20:31
government sticks their nose in the deal.
20:33
You know, there's usually not much trickle down to the
20:36
individual rancher. You know, somebody's going to
20:38
take the pie. It's kind of like the Brazilian
20:41
deal. By the time you give the suit
20:42
60% of it. Why the guy that actually has
20:45
the cattle, why he probably not going to see much of it, but
20:50
we'll maybe maybe something will come out.
20:52
We'll we'll cover that next week.
20:54
Remember, it's September 22nd. I don't see the fell out.
20:57
All I saw was the hairy dog. That is very true.
21:01
I need to go get my felt hat out and I want to make it very
21:04
publicly clear to everyone. This is not my dog.
21:06
I don't do little dogs. This dog is being dog sat by me
21:11
and she has severe separation anxiety.
21:13
So she has to sit on my lap. Otherwise she will be outside
21:16
the door scratching and screaming.
21:17
I have three big dogs on the other side of the house.
21:19
So little bug eyes over here. I love her to death.
21:22
But she is not. So just needed to make that
21:25
public service announcement for everyone out there to clear the
21:28
air a little bit because don't want to be classified as you're
21:31
talking about the dog, not me. Yes, correct.
21:35
Bug eye deal kind of threw me off there.
21:37
Gotta love it, John. Well, thank you so much for your
21:40
time, your insight, your thoughts, your candor on
21:42
everything that's going on. I appreciate it and had a fun
21:45
time conversing with all the things that are just kind of
21:48
going on in the world right now. To all of our listeners out
21:51
there, thank you so much for listening to another episode of
21:54
the Cattle USA Daily podcast. Like John said, when we know
21:57
more, we're going to talk about it.
21:58
So when that five part 5 prong deal, whatever they're talking
22:02
about comes out, hopefully later this week we will.
22:05
We'll be here to talk about it next week with you guys,
22:07
hopefully. So, John, thank you for your
22:09
time. And to all of you listeners out
22:10
there, we will see you tomorrow on another episode.
22:12
Have a good one y'all.