As many of you are kicking field work into high gear, you may not be thinking much about your marketing plans for calves. You've just turned out cows and calves onto pasture and—hopefully, for the majority of you—pasture conditions are good for spring and summer grazing.
However far away fall may seem, now is the time to start looking for the best marketing options for your calf crop. By planning ahead, you can help limit risk in your operation. That's critical, since 2010 could be a good year for cattle producers given the decline in supplies and input costs. Any growth in demand will send prices higher, and you want to be positioned to take advantage of price events that come. Here are some considerations as you prepare for marketing the calf crop:
Market timing. If you're selling calves in the fall, your risk revolves around market timing. In the fall, weaning time is when the market typically bottoms out, but if you market calves in the summer, ahead of the fall run, you may be able to take advantage of higher prices. Of course, a number of factors can impact market trends, but cattle prices typically follow very seasonal patterns. Knowing when the market lows are historically prone to happen can help you take advantage of forward contracting and Internet, video or private sales with delivery following weaning.
If you miss out on a sale and your facilities and feed resources allow, you may want to consider holding the calf crop longer or feeding through the winter. Some analysts anticipate this year to be good for retained ownership if corn prices stay low. Check our Web site frequently to see commentary from cattle market analysts as we move through the summer months.
Know your costs. It is impossible to market cattle effectively without knowing your costs. Knowing that dollar amount can help you determine where you need to lock in the selling price to at least make the break-even.
Beyond that, by knowing your true operational costs you can evaluate the current production practices in your operation and determine which areas need improvement and where you can make cuts to improve efficiency.
Throughout the summer, regularly check the Beef Today Web site, www.BeefToday.com, for updates on market conditions as well as information to help you manage and market cattle this fall. We'll also be seeking your input on a variety of topics via our Facebook page (www.facebook.com/BeefToday).
Keep in touch over the summer!
- Late Spring 2010