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163: What Cattle Market Trends Are Signaling for Fall with Dan Gerhold · CattleUSA Daily

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  In today's episode with Dan, we are diving right into the cattle
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  commodities market, the cattle market in general and we also
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  talk about screwworm quite a bit on this podcast.
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  What our thoughts are as the USDA, we are recording this on
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  Wednesday morning. So the USDA earlier this week
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  had released that they were going to be releasing their plan
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  for screwworm as we got the news that it was 70 miles from the
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  border. So Dan and I touched on that,
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  how it has affected markets over the past couple of days and just
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  our thoughts going forward on it as well.
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  So before we hop into this episode with Dan, though, if you
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  guys could take a second to like subscribe, rate and review this
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  podcast, we would really appreciate it here at the team
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  continues to help us grow, but reach more producers and provide
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  this podcast for you guys. So thank you so much for being
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  here and being dedicated listeners.
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  And let's get into this podcast episode with Dan.
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  Welcome to the Cattle USA Daily podcast, your go to source for
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  the latest livestock markets, industry insights and the update
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  shaping 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. Dan, welcome back to the podcast
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  at How is Life in Iowa this Week.
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  Great. Thank you.
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  Yeah, got a little bit of rain, not a lot cooling down again, so
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  love to see that. Love to hear it.
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  We have been getting absolutely drenched here in Kansas like for
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  the past like 3 days it's been raining like crazy.
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  Last week it rained like crazy. Which is give and take right?
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  Like we'll take it for our winter pastures for cows.
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  But I know a lot of farmers are like I need to give him the
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  field it please stop raining. Yeah, absolutely.
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  It's double edged sword. Never, never cut the rain, but
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  at the same time you're like, let's just save this.
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  Yeah. Can we like just bank it for
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  three weeks from now and then it can start again and go crazy.
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  Rain all you want, flood for all I care.
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  Just go crazy. Oh, I agree.
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  I agree 100%. Yeah, about sand here, you bet.
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  Got. To love it.
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  Yeah, Awesome. Well, what's happening in the
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  markets? Not a lot to be honest with you,
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  Corn and hopefully catching a bed here that looks little
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  supportive. It's been riding a little trend
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  line since our early August low or mid August low.
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  It's been riding that trend line.
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  We bounced back above it here the last couple days and
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  hopefully we ride that trend line.
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  Maybe touch on 440. We get a good opportunity here
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  as we come in to harvest and start seeing that, hey, this
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  massive crop we're told or monster record yields aren't
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  necessarily there. So a little optimistic on the
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  corn side of things. We'd even catching a little
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  bounce yesterday and and here this morning.
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  So a little optimistic there as well.
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  Like to see see some bean sales get on the books, big stuff from
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  China. But to be completely honest, I
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  don't think it's going to happen.
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  So we can hope and pray, but don't think that's coming.
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  But Long story short, a little touch bullish from these levels
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  on the grain side of things. Cattle haven't done a lot.
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  They've been sideways other than our big upswing on Monday with
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  the USDA coming out telling us, hey, screw worms close to the
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  border, what are we 70 miles away?
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  And then hey, we've got a, what is it A5 prong plan set to be
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  announced this week. So a lot of speculation as to
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  what that might look like, whether it's paying people to
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  retain heifers or what that is, I don't know yet.
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  I'm, I'm just going to sit here and wait for the announcement
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  and then adjust from there. But yeah, big day up yesterday
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  and then not a lot of follow through.
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  Sorry. Big day up on Monday and then
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  not a lot of follow through yesterday.
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  So it's a little bit discouraging.
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  There's a lot of resistance. You know, October feeders had
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  quite a bit of resistance up at that 360-4365.
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  Same thing in the fat cattle. They had quite a bit of
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  resistance up at that 241. So little bit concerned if we
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  can't bust through that, I think we could see some more downward
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  pressure especially given our seasonals right now, you know,
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  tough month of October coming up.
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  So I would just have to wait to find out, see what each day
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  trade, you know it. After Monday, everybody was
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  right back on margin call. And then here today, a little
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  bit of relief, but not a lot. We'll see how the day goes.
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  But yeah, it's it's gonna be interesting when that news comes
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  up. Yeah, it definitely will.
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  I think no matter what they're gonna say about it, it's some
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  people aren't gonna be happy. It's gonna like it's gonna upset
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  the industry no matter what they say.
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  They could say that like the sky is blue and there would be
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  people that be like, no, it's not like or we're not doing that
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  or things like that. And so and that's
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  understandable. Like it's, it's going to be a
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  wild week when that does come out.
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  Did they release a date that they were going to do that or
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  did they just say later this week?
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  I thought they just said later this week, right?
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  Yeah, yeah. Yeah.
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  So we'll see if that's today, tomorrow, Friday, Saturday,
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  Friday at 5:00 PM, that's when it's going to be.
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  Hold your breath, right? But yeah, lots and lots of
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  speculation on this. Oh my gosh, I've heard some wild
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  theories and ideas. Inevitably, it does no good to
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  overreact because the USDA will will come out and flip the
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  script, so might as well wait and see what's in there.
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  But yeah, other than that, it's it's been pretty sideways
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  action. I'm in beef hasn't been wrecked
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  the last few days. It also hasn't been strong by
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  any means. So little bit concerned on that
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  side of things still yet with, you know, another 30 days for
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  this low seasonal heat movement. I'm a little optimistic we can
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  get a lot of exports to clean up some of this neat sitting
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  around. If we see that, you know, that
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  that'd be supportive as we move closer into that or deeper into
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  that fourth quarter. So I, I want to see those
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  exports get that meat cleaned up, maybe get these Packers to
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  to keep their kills at that 120 level as long as possible.
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  We don't get those exports. I'm afraid it's going to be a
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  long month of October. So the dollars, the dollar is
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  supportive to exports. Just then the fact that beefs
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  come down to this 380 mark, you know, that's, that's also
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  supportive. So I would think if there's any
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  countries out there that were sitting on their hands on boxes
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  where 410, I would think they'd want to step in and get started
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  here. So I, I'm optimistic that that
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  can happen. And if it doesn't, we'll just
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  have to deal with it. But yeah, a lot of limbo right
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  now, just a lot of sideways action.
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  It's that time of year, right? Like that time of year has come
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  where it's we get out of the dog days of summer and we're all
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  like just kind of sitting there twiddling our thumbs waiting on
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  everyone else is pretty much the name of the game for like the
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  next three months. Yeah.
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  Until things start picking up again and life just starts
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  happening in the markets and all of those things, which I mean,
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  it's like it's a double edged sword there too.
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  Like we don't want the cattle market doing anything too crazy,
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  but we want some movement, right?
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  And trying to find that balance and still, you know, keep us out
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  of the news to keep us moving forward as far as consumer
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  dollars go and everything like that.
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  And as far as the commodities market, we want to just, you
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  know, either a little upturn or just we don't need any rapid
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  growth over here. We're OK with the we're OK with
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  the study. Yeah, it's that's coming back to
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  some of that speculation. I think it would be bad for the
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  industry to see government involvement, but that's my
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  opinion. You know, the markets have a way
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  of working things out. I've talked to a lot of
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  producers who have already started retention.
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  I've talked to a lot more. They have plans to retain.
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  Why do we need government intervention?
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  It's working its course the way it should and always has.
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  So a Long story short, we'll, we'll deal with it when it
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  comes. So.
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  But that'll be interesting, no? It absolutely will.
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  And I think it's one of those situations in the cattle
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  industry that we have so many producers who are already doing
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  those things. They're like, hey, this is an
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  issue. We acknowledge this.
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  We're going to start doing this on our own because we don't, we
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  don't want government interference for the most part.
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  Like if we can figure it out as an industry, as allied partners
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  within the industry, there are different organizations,
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  associations, things like that. If we can figure it out within
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  that, we would much rather do that then have something have to
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  go through government regulation or to the floor of the Senate or
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  anything like that. Like we would much rather just
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  figure it out ourselves then have red tape and regulation and
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  all of those things. I think most producers can agree
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  on that, that it's easier if we just figured out ourselves.
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  But unfortunately there are a bunch of also producers out
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  there that don't do that as well.
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  And so it's like we need the government regulation for the
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  20%, not the 80% and or the government advice or thoughts
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  for that 20%, not the 80%, which is unfortunate.
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  But yeah, again, I'm very curious to see what 5 things
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  that they're going to come out with and what those arms are
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  going to look like. Because there is so much
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  speculation out there like as every and it's all over the
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  board of like things that are super minor to things that are
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  super severe and all the severe ones.
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  I'm like, OK, doomsday planners calm down a little bit over
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  here. But yeah, again, I, I wish that
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  they had it out so that you and I could sit here and talk about
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  it because I want to know what it says and what their plan is
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  on this. Because, I mean, if you look at
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  the sterile fly facilities and everything that we've been doing
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  there in Texas, that has already been in the works for 5-6 months
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  now almost the entire year. Like they've been working on
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  those. But those facilities aren't
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  going to be up and running for another year, year and a half.
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  And so it's like, OK, so we have been doing some things, but
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  what, what does that look like? So I'm curious to see what this
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  plan looks like now that we're kind of like knocking on the
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  door of guys, We got to figure something out real quick.
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  And unfortunately we have to fix a problem for a government that
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  isn't willing to fix it for themselves.
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  And here we are dealing with it so.
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  Yeah, A. Cattle producer.
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  Now, Lauren, if you can make this, make this show go all the
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  way to the top to Secretary Rollins and President Trump, I
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  would I would like to caution them and say that, hey, we
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  already have a system to fix this shortage of cows in this
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  country and it's called income tax.
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  You know, there's a lot of producers that are going to be
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  in tax, have tax issues this year.
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  What's a simple way to solve that?
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  Retain heifers. There's a lot of feet out there.
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  Simple way to use it. Retain heifers.
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  We've already got the tools in place to make it happen.
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  We just have to be patient. Now, trying to speed up the
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  process is only going to make it worse down the road.
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  So, yeah, we'll find out. Like I said, a lot of
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  speculation. Maybe that's that, that thought
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  is way off base and it's something completely different.
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  I hope, I hope they're they're forward thinking, realize they
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  don't need to subsidize effort retention.
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  Yeah. No, 100%.
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  And I hope that it's something that we aren't looking at a
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  Band-Aid fix for now, but we're looking at what is going to,
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  even if it hurts a little bit more now, what is it going to do
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  to be able to impact our industry over the next three to
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  five years? Because if we're speaking
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  realistically, that's what this is going to do.
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  It is going whatever the results of screwworm are, they're going
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  to be affecting our industry for the next three, 5-10 years
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  either from just cattle side, cattle health side, retention
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  side, economic side, like we're going to be dealing with impacts
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  of this for a really long time. So I hope we're looking kind of
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  long term planning here and not just short term resolutions.
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  So very curious to see how this all plays out and obviously how
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  it's going to affect the markets and affect everything else that
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  we talk about every single week. With that as well, are there any
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  other things that we didn't hit on today?
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  Any other highs, lows in the markets?
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  How are PIGS doing? We haven't talked about PIGS in
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  a while. It's called Great.
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  Screaming higher, Yeah, just as expected, a rising tide lifts
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  all shit. So they've been screaming higher
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  that the core cut out has been very, very stable, especially
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  given the time of year we're in, given the fact that our
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  slaughter numbers have been phenomenal, our weights are
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  higher. This is what you love to see.
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  This is the type of demand market, you know, I wish be bad
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  right now is we're killing more. We're putting more product in
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  front of the consumer and we're maintaining price levels that
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  just shows, you know, the consumer may be shifting a
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  little bit to that pork as we've got it's too expensive for them
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  this summer. So that's what we want to see.
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  It gives me hope that, you know, we can hold this hog market
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  through the summer and and keep those hog producers profitable.
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  You know, I, I caution myself just about every morning when I
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  pull up the screen. Hey, remember we're in the month
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  of September coming on October. Let's not get too bullish in the
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  hog market because just when you get bullish, that's when it
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  turns around and bite you in the butt.
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  But managed money is record long again.
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  So even they're seeing it, they're supporting it.
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  I think, you know, coming back to that protein needs if if beef
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  is short and beef is expensive, it's going to raise price core.
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  You know, if, if picking is more expensive than it used to be,
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  that's going to help support pork.
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  So overall, I think if if you look at all three protein
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  sources right now, hogs is about the pork is the value by right
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  now. So I think that's why we've
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  maintained this 110 plus dollar cut out.
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  Like I said, we've we've had strong kills, higher weight.
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  But as we get closer to the end of that fourth quarter, I think
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  we've got the possibility a whole shit open up.
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  So we've got a hard quarterly cognitive pitch report here
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  coming up. And I'm not really looking at
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  the numbers the USDA is going to release for the next half a
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  year. I'm more looking for the
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  revisions they're going to make for their old reports because
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  the slaughter numbers prove that their original numbers back this
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  last year were way off. So they need to make those
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  revisions to get those corrected going forward.
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  Like I said, I do expect a hole here, you know, come November,
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  December more more so December opening up.
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  We had some disease pressure. If we hit that hole, even if
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  it's extended out into January, it should help support pork
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  market as well, which in turn if pork is supported, beef should
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  also be supported. You know, like it comes down to
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  the consumers are eating more meat.
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  I love it. We've talked about it before.
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  It's, it's great that they're switching and they're, they
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  believe animal protein is the way it goes.
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  Hopefully we can hold on to that going through the winter and and
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  make same news prices. I could not agree more.
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  And back on the point of a rising tide raises all ships
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  like we're we're here for it. As long as you're moving towards
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  animal protein, we're we're happy campers at the end of the
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  day. I would love it if it was beef,
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  but you know what? I can't be too picky because I
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  have a lot of people in the hog industry that I I dearly adore.
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  So can't, can't hound on them too much in that aspect.
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  So. Everybody needs their day.
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  Yes, exactly, exactly. Well, is there anything else
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  that we need to hit on today or have we kind of covered all of
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  it? No, I think we hit on just about
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  most of it. I'd yeah have a have a very,
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  very safe harvest and hopefully everything goes off without a
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  hitch. Absolutely, absolutely to all of
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  our listeners out there, thank you guys so much for listening
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  to another episode of the Cattle USA Daily podcast.
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  If you guys are listening to this episode and you would like
• 16:20
  to inquire with our team about getting yourself insured covered
• 16:24
  as we go into these winter months, make sure that you check
• 16:26
  out our show notes where we have our LRP link where we work with
• 16:30
  Dan and his team on Cattle USA insurance to bring that to you
• 16:34
  guys. Head down to those show notes
• 16:35
  and you will find all the information there.
• 16:37
  And just like Dan said, I'm going to echo it as well.
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  Everyone have a very safe harvest, a very safe next few
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  weeks as we go into that. God bless and have a great rest
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  of your day y'all. We'll see you later.