Latest / CattleUSA Daily / 218: Volatile, Violent, and Not Over Yet: Cattle Market Reality Check with Dan Gerhold and Samantha Cozza-Wright

Transcript

218: Volatile, Violent, and Not Over Yet: Cattle Market Reality Check with Dan Gerhold and Samantha Cozza-Wright · CattleUSA Daily

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  In today's episode with Dan and Samantha, we are breaking down
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  the cattle markets once again. Dan and Samantha bring some
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  great insight on what we have been seeing over the past few
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  weeks with the cattle markets. We also discuss what we are
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  going to be seeing as we round out 2025, Some predictions as we
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  start into 2026 and then some just reflection on what happened
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  over the past year in the cattle markets and just what a wild
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  ride it has been in 2025. Dana and Samantha break all of
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  that down for us in today's episode before we hop in with
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  them. If you are watching on YouTube,
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  make sure that you take a second to go subscribe to our channel
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  and like this episode. And if you are listening on any
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  of our podcast platforms, make sure that you are following the
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  show and take a second to go rate and review it in the show
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  notes down below as well. And without further ado, let's
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  go ahead and hear from Jane and Samantha.
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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
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  updates shaping agriculture today.
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  I'm your host, Lauren Moylan, a passionate advocate for
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  agriculture, here to keep you informed and connected.
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  Now let's dive into today's episode.
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  Dan, Samantha, welcome back to the podcast.
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  How has life been over the past week in the wonderful state of
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  Iowa and Kansas? Well, I guess I know how Kansas
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  has been over the past week, Samantha, but you know, how is
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  everyone? How is Florida, Dan?
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  Oh, it was, it was good. It was warm as usual.
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  It's been a while, so it was nice to get get out for just a
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  couple days and enjoy some sunshine again.
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  Iowa's been brutal to start this winter off and like a lion,
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  hopefully out like a lamb, but it's been brutal.
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  Yeah, I can relate with Kansas, too.
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  Like right now we have a little bit of sunshine coming in and
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  it's warming up a little bit, but it has been so cold and
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  cloudy and miserable. So I hope you soaked up the
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  sunshine for all of us in Florida.
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  I really do. Yeah, boy, being nice to just
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  pack up, move all the cattle, feed cattle down there in the
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  winter time and then bring him back home in the summer.
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  And yeah, doesn't work that way. But yeah, the weather was nice.
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  Snowbird. Hey, I don't know, I've stock
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  producers don't get that chance. Yes, very much so.
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  Well, what has been going on in the markets?
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  Who wants to start us out? What are our thoughts?
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  Just been a lot of chop the last 2-3 days.
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  Markets very indecisive as far as if it wants to punch through
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  some of these Fibonacci retracement levels if it wants
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  to go up and attempt filling some of these gaps again.
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  We had a chance on the way down to fill and failed and
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  inevitably went lower broke below 200 day moving averages
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  and now we're back above those averages and trying to chase
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  those gaps again. It's kind of in a sideways
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  pattern like I mentioned for 2-3 days and old adages never sell a
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  sleeper. So I'm a little optimistic.
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  I think cash has an opportunity this week, but we'll see how
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  that goes. Some of the sale barns seen a
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  little bit bigger runs, but overall not a not a huge amount
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  traded to really think anybody's going to step out of the market.
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  That combined with I don't think they can.
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  I think they've got the orders, they need some some rabbis for
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  Christmas. So I think they're they're going
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  to have to keep this kill up there in the upper 500.
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  So that's a little optimistic there, yeah.
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  I'd love to hear a little bit of optimism.
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  Samantha, what are your thoughts?
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  Yeah, I agree. Cash is really strong right now.
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  The need for placements is really high.
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  People are finally getting those long time wing cabs to town,
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  seeing a little bit less market transparency.
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  You know, Texas now doesn't meet confidentiality laws to be
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  reporting on the negotiated fed cattle trade.
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  Like I said, that takes out a lot of transparency out of the
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  market. Even though they're trading at
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  such a low volume, they have such a high influence on the
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  market. So, you know, if it were up to
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  me, I would say we do need a little more or less restrictions
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  on those confidentiality guidelines so we can be seeing
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  that trade because really who knows when that's going to come
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  back. So you know, we already trade at
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  such a low level of new cash trade itself.
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  Most everything's traded at formula trade, you know, roughly
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  75 to 80% of that. So we were already getting such
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  a small window into what's going on in the cash market in itself.
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  So do not have those bids and not see that transparency I
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  think is going to have and effect moving forward.
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  Also something to look at, you know, the demand for ground beef
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  is kind of unseasonably high for this time of year.
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  So we're going to see less of an emphasis on those higher end
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  cuts as we move into the holiday season.
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  You know, as far as technical technicals go, I don't really
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  keep up with that sort of thing on the futures board.
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  That's that's Dan's territory. But he talked about last week in
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  his commentary a dead cat bounce and I know enough to know that
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  that means, you know, this rally last week was all done on low
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  open interest. So that doesn't really put the
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  technicals in our favor long term.
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  I think we're going to start seeing more of this pressure
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  first of the year come into play when we start seeing higher
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  import numbers on beef and then getting this S border open.
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  I was optimistic to see slaughter almost reached that
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  600,000 level last week and most of it was on two to four week
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  delivery. So I think that's going to
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  hopefully carry us into the year end.
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  Now as we move into the first of the year, there's still that
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  high level of uncertainty. Agree with that.
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  I mean January February is typically restaurant season.
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  Be interesting as we rolled out calendar and get some new fresh
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  new maxed out credit card bills after the Christmas season.
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  Be interesting to see what that restaurant demands like.
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  As as Samantha mentioned, you know, I showed demand is not
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  falling out of bed. There's things of of concern.
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  You know the last 2-3 months you saw volume moved as a whole
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  dropped at the same time slaughter dropped and prices
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  were drifting lower. You know, not not falling out of
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  bed, but they held 370 for quite a while and now we've drifted
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  below that. But you don't want to see all,
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  all three of those, those factors going down at the same
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  time. So that's kind of a, a little
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  thing to, to keep an eye on And, and coming into January, it'll
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  be interesting what that, that restaurant demands.
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  Like if this winter stays like this all the way through
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  February into March, I would, I would think restaurant demand.
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  It's just going to be mediocre. I don't think it's going to be
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  extreme because people don't want like traveling in this type
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  of weather. It's 30-40 mile an hour winds up
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  here right now and snowing again.
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  So it's pretty easy to, as you mentioned, take some hamburger,
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  make a casserole at home. So Jan Feb could be very
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  interesting. Yeah, definitely.
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  We've got some things on the horizon that we can sit here and
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  we can speculate on what we think is going to happen or what
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  we kind of anticipate is going to happen.
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  But boy, if this market has shown us anything over the past
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  year, it is that hold on to the handlebars because this roller
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  coaster is not slowing down anytime soon.
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  What are our thoughts on just kind of as we continue to move
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  through the year into January, we're starting to close up 2025.
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  My mind isn't even on 2025 anymore.
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  I'm like that long passed a long time ago, but what are kind of
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  our thoughts as we round out the year and just go into 2026?
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  You know Shane. Go ahead.
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  Shane talked a little bit in his commentary last week that when
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  we saw the FDA approve a drug to treat the screwworm stuff that
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  we were seeing funds exit. So I was putting some downward
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  pressure on the market and then it kind of rebounded after that
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  case. The screw worm was confirmed 120
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  miles South of the border. So I don't think it'll be the
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  first of the year when we see this thing open.
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  I think if I was initially the plan, I think it'll be further
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  into the first of the year. But I think when we do get it
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  open, just that initial effective of people having that
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  speculation that they've got all these cattle wait, not just come
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  in and that can have an effect on the markets.
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  So I think that's going to be the biggest thing going into
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  2026. Yeah, I mean, all eyes are
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  sitting around waiting when they're going to drop that that
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  bomb on us same time. I still don't think they're
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  going to open all the all the ports at 1 crack.
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  We're not going to see a massive glut of cattle come crossing
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  right away. It's kind of, it's a, it's a
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  process just like it was the last two times I tried to open
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  it. So the other interesting thing
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  that's been funny to watch is just the psychology of this,
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  this cattle market. I, I get, I don't know if you
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  want to call it a luxury or a privilege.
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  I get the privilege more so of talking to a lot of producers
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  across the country. So when I do that, I get to
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  hear, you know, in their voice, in their thoughts, you know,
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  what if they think we're going to new highs, if they think
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  we're going to new lows and how that changes as the market
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  moves. So, you know, something we've
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  kind of noticed there's a lot of producers out there we're we're
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  sitting on their hands not getting coverage as we were
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  rallying this market higher. And then all the sudden Trump
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  comes out, make some statements, other stuff, you know, started
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  dropping to make that market do what it did there in late
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  October and November. And then there was a lot of
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  panic bucking, you know, getting coverage on, getting hedges on.
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  And now the market retraces, you know, as she mentioned that dead
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  cab bounce on lower open interest and we're seeing
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  producers once again stalling out saying, well, if we get back
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  up another 10-15 higher, you know, then I'll do something,
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  you know, it reward the rally. You can work into this stuff,
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  you know, on percentages, book 25% when you rally 1020 bucks
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  and if market goes higher again, book another 10, 1525%.
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  You know, just keep rewarding this rally because we don't know
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  when that's going to turn around and fall out of bed again.
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  You know, back to the psychology, you know, go sit in
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  the sail barn. It's kind of funny, you know,
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  back in early October, I just wipe my hands clean.
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  I'm like, I can't afford these things.
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  What calves were cost and weaned, unweaned yearlings.
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  They were all just insanely high.
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  Great for the background or great for the, the cow calf
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  producer love to see it. They need their turn.
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  Then all the sudden the market drops, price drops with them.
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  You know, I, I think I saw four $500 head swing in the same type
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  of cattle inside of a month, you know, to the down and then all
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  the sudden we put that four 500 bucks back on in two weeks.
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  It's pretty remarkable how everybody's opinion went from
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  we're going to 0 to now we're going back to the moon.
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  So like I said, the psychology of all of this, it, it's been,
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  it's been a violent volatile market.
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  And, and personally, I don't think it's over 2026 is set up
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  that it can, it can remain just as volatile.
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  So the, the other thing that I hear a lot on the phones is how
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  expensive these LRPS are. I, I don't disagree option
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  volatility went through the roof with this move we've had.
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  So yeah, you're looking out, you know, if, if you're going out 40
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  or, you know, 52 weeks it, it gets up there, 20 bucks, 100
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  weight is a lot is a large pill to swallow, but consider coming
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  back in with some options around it.
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  You know, there are ways that we can try and make that a little
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  bit more reasonable. It adds a little bit of risk in
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  trading when we do so, but at the same time, you know, we
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  might protect a window from 3/23/25 down to 280 and, and we
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  might cap your top side up at 37380 the old highs.
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  So consider that it's it's not a good fit for everyone.
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  And then like I said it, it comes with some risk.
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  But at the same time, if we can cover the top ten 1520% of this
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  market from where it's sitting now and we leave you open to the
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  old highs, it, it's sound risk management in my opinion.
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  And all the sudden you can take that $20 a hundredweight LRP
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  premium and turn it into 8/10/12.
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  You know, it a little bit easier pill to swallow.
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  So at the, the end of the day, I personally don't think cattle
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  are going to 0. So why do we need to ensure I'm
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  to 0 you know, put some LRP on sale, put underneath of them,
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  you know, 40-50 bucks out of the money and and be happy you got
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  that top end of this market protected.
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  Yeah, I think if we've learned anything this year, it's that
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  it's a volatile and violent market and that we can sit here
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  and we can try and predict it all day long, but the market is
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  going to do what the markets going to do.
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  And if the media decides that they want to talk about the
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  cattle market that week, well, hell, all the fundamentals go to
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  shit. So it's one of those situations
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  that we really we try to have as much predictive ability as
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  possible when it comes to this market and keeping it stabilized
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  for these producers because we want, we want to have high
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  markets, we want to have all of this.
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  But at the same time, it's going to go up and down.
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  It is a commodity market at the end of the day.
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  And So what that looks like is kind of those fundamentals come
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  into play. But at the same time, we're
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  going to have that roller coaster come in.
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  So you made some really, really great points, Dan.
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  Just as we go into the new year, we are reflecting back on kind
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  of this crazy year that we've had.
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  A little fun question for you guys.
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  What is the most outlandish, most surprising, most wild thing
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  in your opinion that happened in the market this year?
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  Falling off $80 a hundredweight and two months, that's insane.
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  I don't think anybody saw that coming anytime soon.
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  Oh, that was a that was a big drop that fast.
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  I'd have to say some of this option premium that I saw when
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  we were up knocking on the highs, you know, $400.00 feeder
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  cattle calls were worth 5 to 7 bucks, $500 feeder calls,
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  they're still trading at a half a buck.
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  I mean, I at one point those things were worth a buck and a
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  half buck 60. So it to me, when I look at, I
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  got to look at crazy. Once again, it comes back to the
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  mentality or the, the psychology of trading.
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  There's actually people that thought we were going to $500
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  feeders. They had decent reasons to think
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  so the supply and a lot. And at the end of the day,
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  that's, that's quite the move. So watching wild stuff like
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  that, yeah, it's, it's been a, it's been a ride.
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  It has definitely, definitely been a ride.
• 14:38
  Well, guys, what else is there anything else in the markets we
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  need to hit on? Dan, do you want to hit on grain
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  markets really quick for us? Yeah.
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  I mean, yesterday we had a grain report come out.
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  A lot of people are calling it a nothing burger.
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  A lot of people were just saying we kicked a can down the road
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  and that's the facts. They didn't do a whole lot.
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  Overall, the number on corn was a touch bullish, but not as
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  bullish as a lot of people would hope that the USDA would correct
• 15:03
  their numbers to the yield. You know, in my opinion and a
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  lot of people's opinion, that yield number from, from this
• 15:09
  2025 crop, your knees come down at the end of the day.
• 15:13
  They, they like to do that in incremental movements.
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  They're not just going to come in and drop, drop the yield
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  from, you know, 184 down to 182 down to 176 and one report.
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  So we we weren't surprised that they did that.
• 15:29
  Overall, it's very common to see the seasonals just work grains
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  higher as we go into January and February, you know, early March.
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  So you know, as we recommended here a couple months ago, get
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  your feed bought, you know, corn was cheap at that time, wheat
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  cheap. I'd like to see a little bit
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  more action in that wheat in bean market, get those trending
• 15:49
  back higher to really give me hope that this rally lasts a
• 15:53
  little longer than expected. You know, beans, wheat, they're
• 15:56
  kind of the they're kind of dragging right here.
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  So I don't think corns going to get extremely out of hand.
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  It would it still wouldn't surprise me though if we go up
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  and visit that 47480, maybe 495 if if we do, I think producers
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  really need to heavily consider getting some hedges in place for
• 16:13
  2026 crop year. Definitely.
• 16:15
  Samantha, do you have any other closing thoughts on the markets
• 16:20
  this week or anything else that we didn't hit on?
• 16:23
  Not really. Just going back to what Dan
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  said, use the rallies to protect.
• 16:27
  You know, sure we fell off a ways, but we've gained about
• 16:30
  half of that back. These are still really good
• 16:32
  prices to protect that. Don't let it fall off another 20
• 16:35
  a hundred before you pull the trigger.
• 16:37
  Yeah, absolutely. Dan, anything else before we
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  close out? All good here.
• 16:41
  Hope everybody has a great Christmas.
• 16:43
  Yeah, one more, one more quick thing.
• 16:46
  Very important, get your prime ribs out of the freezer, get
• 16:50
  them in the refrigerator and get them wet aging.
• 16:52
  Trust me, you won't be disappointed.
• 16:55
  Hit up Dan if you need an instruction manual on that.
• 16:58
  I'm sure he can help provide. Mr. Grill Master over here can
• 17:02
  do all of that for you. So one nice thing we don't have
• 17:05
  to worry about you can't put a prime rib in an air fryer.
• 17:07
  Yep. OK, I regret everyday telling
• 17:10
  you that I do that. My husband now it is a joke in
• 17:14
  our house about our air fryer and me cooking my steaks in it.
• 17:18
  But you know, they turn out great.
• 17:21
  They're perfect in the middle and nice and crispy on the
• 17:23
  outside and you know, it's fine. It's fine.
• 17:27
  As long as you keep eating steak, I don't really care how
• 17:30
  you cook it, but I can't help myself.
• 17:33
  I I can't blame you too much. I can't blame you too much.
• 17:35
  We are hosting for Christmas, so that is a good reminder for
• 17:39
  everyone. Get your prime ribs out, get
• 17:41
  whatever you're doing out, hopefully at a stake of some
• 17:44
  sort. And we hope you guys have a
• 17:46
  great rest of your week. Dan, Samantha, thank you for
• 17:49
  your time as always. To all of our listeners, if you
• 17:52
  need that coverage that we were talking about today, if you want
• 17:55
  to just get in contact with someone from our team, talk to
• 17:57
  Dan, talk to Samantha, anyone else, Make sure that you check
• 18:00
  out the show notes down below. We've got that link where you
• 18:02
  can figure out what works best for you and get a hold of the
• 18:06
  team through Cattle USA Insurance.
• 18:08
  Guys. Thank you again for your time to
• 18:09
  all of our listeners. We will see you all next week on
• 18:11
  another episode. Have a good one y'all.