Coming up.
Speaker 2:When you go sit in any kind of barns, you go sit in any sales, it doesn't look like it's gonna stop
Speaker 1:here for a minute.
Speaker 3:The guys that that have the optimism of this thing's gonna be here and it's gonna be here for a little while.
Speaker 2:And the cattle feeder's got more hedges on or the producer's got more hedges on than what he's ever had.
Speaker 1:That's right around the corner on the Live Ag Ranch and Livestock Marketing We Live It podcast. But first, a reminder, if it's time to sell your cattle, consign your cattle with Live Ag. Our summer auction schedule is on your screen and available at live-ag.com. Consign your cattle now and take advantage of Live Ag's generations of experience in livestock marketing. Now here's your hosts, Ty D Cordova and Casey Mabry.
Speaker 3:I'd like to welcome y'all back to the We Live It podcast. Myself, Ty D Cordova in case maybe here live from, Aledo, Texas on the back porch of Jason Barber's house. We, we stopped in here today to record another podcast that'll come out this Thursday. So just so y'all know when we are talking, if something has changed in the market, we're not that dumb. It's just that we are recording this thing.
Speaker 3:So, Casey, how's everything going? We haven't seen you this summer. You've been kinda hiding out on us.
Speaker 2:I know, man. We've been, stuck behind the desk here lately. Markets have been, obviously, very intense and, very volatile, and there's lots going on. So, we've pretty tried to stay pretty much glued to that watching all the different things in the market. But otherwise, summer's been good.
Speaker 2:Personally, we always talk about livestock and things like that from a kid's standpoint. We're just starting out buying some of these show pigs.
Speaker 3:How was your how was how was your last weekend experience down in South I 10 down there?
Speaker 2:Yeah. I'll tell you what. You get around Boerne, Texas, make sure you park under a light. I guess there was 10 trucks that gotten broken into. Knocked my window out.
Speaker 2:I guess the good thing is they dug around in my truck and figured out there's only a couple, like, empty syringes and maybe a bottle of Baytril or something in there, you know, as they were looking for stuff. But I didn't have any pistols or any money, so they didn't really take anything out of my truck.
Speaker 3:There you go. That's a plus. That's a plus.
Speaker 2:Yeah. There's one guy that's truck got stolen, I think, but there was, like, 20 or so that that definitely, it was pretty crazy, I'd say. So, everybody out there, make sure whenever you stay at a hotel, figure out you need to park under a light.
Speaker 3:Under the lighter around the camera or something.
Speaker 2:It's got pretty crazy on
Speaker 3:stuff like that.
Speaker 1:You know?
Speaker 2:It's ridiculous too. Wherever you go.
Speaker 3:Yeah. Yeah. So, y'all have been just buying a pigs. You don't have any pigs bought yet,
Speaker 2:I guess? No, we're just starting.
Speaker 3:Yep. Just starting. We've had a barn full of steers all summer. It's been hot and but been keeping em cool. Fans going.
Speaker 3:Girls been getting up early in the morning. Yeah, it's
Speaker 2:been a pretty. It's been a pretty nice summer though from a weather standpoint though.
Speaker 3:It has been. It has been really nice. Like today, it's I was up in Hollisch and McAllen. It was 75 degrees and north wind that not northern kind of coming in up there and it's normally a 127 up there and it was nice today for once.
Speaker 2:Yeah. And if you go around anywhere, and I think tying back into some of the stuff that's going on in the markets and things, but weather's been nice. It's been cooler than normal. We've gotten some nice timely rains, and I don't care if you're in South Dakota or in Waco, Texas or where you're at, it's green. No?
Speaker 3:I was talking to me and Jason struck out a week or two ago when we went to Casper whenever that was and from here all the way to Casper was green. Yeah. And then we come back through Kansas and back down to Oklahoma City to Expresses and everywhere we went, it was just green and and lush and I mean, we've been very very fortunate, very very blessed this year with rain in every aspect of the country. It seemed like we had a couple of dry spots right there kind of North Of Casper. Can see where they're getting a little dry, but other than that, man, it's been phenomenal.
Speaker 2:Yeah. So then consequently, we've had tons of hay and tons of forage out there across the country, and so that's probably put a pretty decent bid in them lightweight feeder cattle or in them lightweight calves or even cows or whatever it is. Mean, it's been crazy. If you think about from a market standpoint and like where people are at and different geographic locations and where their operations are, I mean, much everybody can, you know, get a hold and buy some cattle right now and have something that's either cheap forage or or something that's extremely or extremely, you know, plentiful to get out there and buy some hay, buy some grass.
Speaker 3:This is good stuff. The pool boy. Don't cut this out for real. As we're sitting here, a man just appears in the backyard just walking through.
Speaker 2:We might get him over here
Speaker 3:and see
Speaker 1:if we
Speaker 2:can get that get that Polaris
Speaker 3:over get that thing up fixed.
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Speaker 3:Like you said on the hay, was down looking at a place Saturday to lease and that guy was telling me he had bought two or three loads of five by six big round rolls, $40 a bale delivered, fertilized. I mean, that's when you know we're seeing a lot of, you know, have a lot of good hay. But, you know, normally when we have this fortunate enough to have this kind of rain and this kind of grass, we better stock it up because the good Lord's getting us ready for something. So, we better tee it up, keep it up, because we might have a pretty rough winter.
Speaker 2:So Yeah. No doubt. And I think wherever you're at, I mean, I went up to Indiana about two or three weeks ago, and, I mean, that corn crop up there is incredible. I was in Western Nebraska two weeks ago. I mean, that corn crop out there is incredible as well.
Speaker 3:Yeah. We drove through that one too, and it was unreal.
Speaker 2:Yeah. So, I mean, these guys are gonna have forage around them. They're gonna have grains around them. We've got plenty of feed, and I think that's definitely probably lent a tremendous amount of support into this market. I mean, that's not even talking about as we go forward and getting into the wheat country, you know, as we go through this fall time period.
Speaker 3:And they've had rain too, to ride around and around to get this stuff put in the ground. Guess they're stuck, plant up there and put out some anhydrous and stuff and all that. Getting that stuff ready. So Yeah. Just kinda get into some market details.
Speaker 3:What kinda what do you see trending around now? What is
Speaker 2:It's been an uptrend.
Speaker 3:Just to
Speaker 2:say that. Yeah.
Speaker 3:So but what is, like what are your customers' moods and what are the questions and what are they I mean, I know it's probably been really, really tough on some guys because the way this market has ran so fast in a short period of time. But
Speaker 2:Yeah. I'd call this market really polarizing because because if if you you really really step step back back and and you you think about it, we always hope the market goes higher so that we can sell at higher prices. The market was we opened up the year. We were kind of hovering right around $2, and then we pushed that market up into that $2.10 area in which a lot of us, I mean, including myself, thought we would get there. So you saw this first set of selling and I'd say hedging around $2 on fat cattle, call it like $2.70, $2.80 on feeder cattle.
Speaker 2:And then once we got to that magic number on $3 on feeder cattle, I mean, that was another place where guys really jumped in and started selling again. You call it $2.10, $2.12 on fat cattle. And then it looked like it wasn't going to continue to go any higher. And the market never even set back. It just pushed higher again.
Speaker 2:So once you got feeder cattle up there around $3.20, $3.30 again, which wasn't even that long ago, fats call it about $2.15, $2.20. I mean, a lot of people sold it again. The problem with where we're sitting right now, Ty, is I mean, everybody's kind of stopping and staring and they're kind of in awe what's going on. The cattle that are unhedged are making tremendous amount of money. The cattle are hedged that are making really good money, but everybody's focusing on, if you're a guy that most people are, I mean we're working on operating and we got margin calls or maybe you sold cattle early.
Speaker 2:It gets everybody really emotional around that because they start focusing on what they've sold and not what's unsold. And so I'll tell you this, this market is really, really good. I think it's gotten past the point of good in my mind to where it's starting to get a little scary, honestly, because I think everybody now and you can look at the data. I mean, commitment of traders data is where everybody that's got a reportable position. The CME comes back out, the CFTC reports those positions and the cattle feeders got more hedges on or the producers got more hedges on than what he's ever had.
Speaker 2:So you know that a lot of people are hedged. You can also see it whenever you're we're all getting around each other, a lot of people are going, you know, when's this thing gonna break, or when's it gonna set back? But you go sit in any kind of barns, or go sit in any sales, it doesn't look like it's gonna stop here for a minute.
Speaker 3:So No. And we've seen it for the last three weeks or four weeks now. All the video sales, our sale, our video sale in Casper, and everybody else's sale around us, these these video sales have been smoking hot. I mean, you you can just see the the the guys that have the optimism of this thing is gonna be here, and it's gonna be here for a little while. And and it's it's wild.
Speaker 3:These prices are unreal.
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Speaker 2:I remember back and and and not, like, trying to get real historical on this deal, but if you think back to when we're in the middle of the drought and coming out of COVID, it was, twenty twenty one, twenty two, sometime in that that area. You know, I'd say fat cattle were at a buck, feeder cattle were like a buck 20 or buck 30 or something like that. We had corn that was kind of sitting around $78. Nobody wanted to own one. Nobody had any grass.
Speaker 2:We were dry everywhere. You'd go but drive by sale barns. You'd see it on Facebook where everybody's dropping off cows. They had full trailers showing up and then not even going and sitting down. They'd just take off.
Speaker 2:Now you got the opposite occurring. You got less trailers that are showing up with cattle in them. Got more trailers that are sitting there with cattle ready to go get loaded up. Really it's because they've got a lot of feed, you know, and these guys are and and and the guy that thought, you know, it's okay. I'm gonna dump my cows at a thousand bucks three or four years ago.
Speaker 2:I mean, thinks that a $3,000 cow is cheap. Cheap. And so, it's kind of funny, and this guy will see this on this podcast probably, but I got a buddy of mine that's doing some work and was talking about partnering on some $3,000 cows and, you know, they seem cheap. And the other day, I'm just like, man, I know it might be a cheap deal, but, I know tons of people that have bought in twenty fifteen, sixteen bought a $3,000 cow, and then that thing was not cheap, you know? So, I'll just tell you, you gotta be careful and nimble on this deal.
Speaker 2:Appreciate what's the market's given you. Focus on and I say this every time. Focus on what you don't have sold. Don't focus on what you have sold. Let's try to make sure that we get get get out there.
Speaker 2:So from a bullish standpoint, I mean, I don't know anything more that you can throw bullish at this market. So let's talk about here for a minute, Ty, how we got here. So obviously tighter cattle supplies coming out of the drought, took cattle away from the market, took cows down. I think we got the lowest beef, what I'd call the native beef type cow inventory in history. I mean, it goes back since, you know, wherever we peaked the cow herd in 1978.
Speaker 2:You got to go back to like 1950s before you find a cow herd that's of the size that we've got right now. Dairy cow herd. We got to start talking about the dairy cow herd in my mind. We start talking about analytics and things like that. We got about 9,000,000 dairy cows out there that are producing calves every year.
Speaker 2:The dairy industry has gotten very efficient at, you know, their replacements, and I know that beef calves that they were selling, you know, they're selling these day old beef calves for upwards around $1,300, $1,400 a head. And that's gotten really high. So that's become very important to these dairies. They're letting somebody else raise the heifers, in which that somebody else is nobody. And so they tightened up their dairy heifer replacement side of that deal.
Speaker 2:And so you're starting to see some of those guys that are really just continuing to use that cow as a dual purpose animal, if you will. That cow's worth a lot of money Feeds cheap, cattle are high. There's a lot of incentive out there to produce those calves. Non million dairy cows, I'm going tell you we're probably getting somewhere around between three and four million calves a year out of that supply chain that's coming into it. So if you look at it from a total standpoint, I mean it's about 10% of the total cow supply, total calf supply.
Speaker 2:On an on feed number standpoint, it's probably 15 to 20% what our total inventory on feed is today is coming out of that dairy supply chain.
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Speaker 2:There's been a lot of news and topics around new world screwworm and the Mexican feeder cattle imports and then the halting of that. So, we stopped that back last November. We really depend on about a million and a half, I'd say a million two to a million four Mexican feeder cattle that are getting imported into The U. S. And it's a very vital part of our economy, really.
Speaker 2:I mean, I know there's going to be a lot of people out there that probably have a differing opinion on that from a protectionism standpoint around not letting, and I'm not going to get into that debate, but there's a lot of people that depend on those calves to come across. Whether you're a wheat pasture guy in Texas that's grazing those things, whether you're a grass guy that's grazing them, or whether you're a feed yard in South Texas that fills up with those cattle, there's lots of infrastructure in The U. S. That's built upon the dependence of this 1.2 to 1,500,000 feeder cattle that come across the border. We shut that border off last fall.
Speaker 2:It comes back open a little bit. They shut it off again. That's been the thing I think has driven the market probably more than anything. It's that jolt, it's that shock, it's that short squeeze to where the guys that needed them cattle are kind of shuffling around that. That's driven a lot of optimism, you know, on the domestic animal there.
Speaker 2:So we're down cattle on feed report comes out last Friday. Placements came in a little bit bigger than what people would have thought they were going to be, but we've still got inventory of cattle on feed down about 2%, 1.6% or so. So when you look at the data, placements come in at about down 6%, so they were 94% of a year ago. Yet marketing's down about 7% as well. And we've got a tremendous amount of cattle that are that are not into the system, right?
Speaker 2:We're down six, six hundred and fifty thousand, I believe, Mexican feeder cattle that are down, but our inventory is only down 200,000. Yeah. And so that's another interesting take. I'd say that that one that's something that we got to, like, really think about and and go, you know what? Those Mexican feeder cattle didn't come across the border.
Speaker 2:Where'd they go? I mean, are they sitting there waiting to come? Is it ever gonna open up? You know, secretary Rollins, you know, gave us our, you know, talking about how they're gonna control the new world screwworm in in her press conference we saw about 10 ago or so. It doesn't look like she's wanting to do anything right now.
Speaker 2:So I don't think them cattle are coming across here for a little while. What are the dynamics gonna be? It feels like it's gonna kinda stay tight here for a minute.
Speaker 3:Yeah. And we're seeing as far as on our side of the deal, we're we're we're what we're seeing the the feed cost is look like it's driving a lot of this stuff. There's a of feed around. There's lot of corn around. Corn is not gonna be worth much.
Speaker 3:The guys at Iowa and up through there are gonna turn that corn into beef. So we're starting to see a lot of them guys come and drive this price up down here as well. We've seen a lot of guys from up north start going south a little further and buying more cattle down here. We'll see, as you said, while earlier, we was talking about the the numbers and the and the vacancy pins are are really down here in the South. You go up north and them guys are got pretty good you know, their yards are maybe not full, but they're not they're not many empty pens.
Speaker 3:So, I mean and I I I think they they started coming down getting few of these few more of these southern cattle because the feed's gonna be so cheap, they had to come get them. So
Speaker 2:Yeah. It's interesting that if you look at the data, Nebraska has a different placement time than what the Southern Panhandle Of Texas does. Nebraska, we place all the cattle in the fall, calves and yearlings. We dump the yearlings out as we go through Feb, March, and April, and then we come back with that warmed up calf, you know, as we come out of the grow yards in that time period. We normally deplete the inventory of the cattle in the feedlots through the summertime.
Speaker 2:And so you go peak on feed numbers in Nebraska, typically just say January 1, that's before you really started marketing the yearlings. The calves are on feed, the yearlings are on feed, your Texas numbers are pretty tight. So our Texas numbers are plentiful there in that time period. As we go forward here, what's interesting is like, man, you look at the on feed numbers and I was showing that to you a minute ago, Ty. Nebraska is the biggest Texas is the smallest it's ever been.
Speaker 3:Mhmm.
Speaker 2:Nebraska is the biggest it's ever been for August. Okay? So as we look at August 1, numbers on feed, Nebraska's biggest it's been. And so, I mean, one of the things I think of, Todd, maybe we can kind of talk about this for a minute. You look over the last couple years, where who's got the highest price for their cattle?
Speaker 2:Yep. Nebraska. I mean, they've been carrying hundred and twenty, hundred dollar hundred dollar premium to the south, and so that's been strong there. The weather in Nebraska. I mean, had a storm a couple years ago.
Speaker 2:That's pretty bad late, but it's really the last couple years have been kinda open. They didn't have enough grain, you know, to do much with it because China was pulling a bunch of our grain out and going with it. But China's backed off on grain. We've got grain in the North. Farming, I'd say, that standpoint, has been a little tougher here over the last couple of years.
Speaker 2:And then step back to look at the incentive. Cattle prices are high. Cattle prices continue to go higher. There's less incentive to sell cattle, lots of incentive to overfeed cattle. We normally dump calves out of the feedlots and and, you know, call it June, July, August, but we're not doing that yet.
Speaker 2:Right. And so on feed numbers are big. It's gonna be interesting. I know you guys have had a heck of a summer run on these videos. Those cattle haven't been delivered yet.
Speaker 2:It's gonna be interesting to see where they're gonna go as we go forward there, as far as like physical delivery and and getting them into the feedlots and what that inventory of cattle looks like once we get there.
Speaker 3:Yeah, it's been a heck of a summer for everybody. I mean, this market, even though you sell em one week and next week, they're look too cheap, but man, it's still higher than you ever sold one. I mean, don't know how you grab about a $2,400 cab and a $3,000 yard line, but I mean, it's just it's unbelievable. So I've been very fortunate in in the whole industry for that. So but, Casey, I don't know.
Speaker 3:I just appreciate you coming and joining us today and kinda filling us in on a little market details and getting to see you again. Been a long
Speaker 2:You knocked that beard off since
Speaker 3:the last time
Speaker 2:I saw you? Yeah. You know? Try to get you some new growth?
Speaker 3:Well, you know, I was looking at the camera angles, and they had made you look taller and thinner. So I thought they could make me look skinnier and younger. So I thought I'd help them a little bit, but it didn't work.
Speaker 2:Yeah. I'll tell you what. I had a a good friend of mine, and he'll probably watch this too that called me and told me I need to get on a diet after that last video where they had that camera angle kinda shot from the bottom side,
Speaker 3:but A good friend of yours was on our podcast and or and maybe not a good friend, but a a young lady that you taught in four H meat judging contest or. Katie. Katie was on with us and Casper and did you hear what she said? No, I didn't hear. She said, you gotta cover that chin up today.
Speaker 3:Your second chin down there, the the light's clearing off of it. I was like, good job, Katie. I don't even know you very well. You you Katie's got Casey sure did train you. So but between her and my daughters, I figured I better get it back.
Speaker 3:So
Speaker 2:Yeah. If I could grow a beard
Speaker 3:like that, I probably would. I'm gonna I'm gonna get it back,
Speaker 2:but Starting to go gray, though.
Speaker 3:Hey, man. Easy, man. Easy. I say that's knowledge. I don't know.
Speaker 3:I ain't got
Speaker 2:Yeah.
Speaker 3:I don't know.
Speaker 2:I think it's I think it's his markets, isn't it?
Speaker 3:No. It is his market. Yeah. This is trying to figure out what to do and what to tell your customers about. Now you know all about
Speaker 1:that.
Speaker 2:Well, gotta enjoy it. Like I said, man, we we I think we've gotta embrace this thing, whatever you did. So if you sold cattle too early the last time, just continue to stick along the same plan. Yeah. The last thing you wanna do, I mean, and this is just advice to everybody, is really change your plan.
Speaker 3:Don't change anything.
Speaker 2:So don't yeah. Don't double up on inventory and think it's gonna keep going up. Don't go out there and, you know, change your business model. Just keep chugging along. Do the right thing.
Speaker 2:Be diligent. Continue to manage your plan. Everybody's plan's different. These things can get people jacked up, dude. Yeah.
Speaker 2:And so we just wanna make sure that we're playing the right game.
Speaker 3:Yep. Yep. I agree. So once again, thank you. We'll see you again next week probably.
Speaker 3:I wanna thank everybody out there in social media land for watching us. Don't forget on YouTube, hit subscribe and like. And then on Spotify, rate us if you'd like to. And if you'd like to get a hold of us, contact us about maybe doing some sponsorship for being on the program or you have any questions. We're at liveag.com and reach out to Katie@LiveAg.com.
Speaker 3:I want to kind of talk about a little bit of calendar schedule. We have our September 11 sale coming up here in three weeks. I think it is. Deadline on that is a week from now. So, be sure if you got some cattle you want decide of that, you get with us.
Speaker 3:This market is good. So, let's try to get em out there and get em sold. We have a lot of purebred sales coming up this summer. That that purebred run is getting big. If you wanna go on the on the website at live-ag.com and click on purebred auctions, kinda scroll down through there and see what wall we have to offer.
Speaker 3:It's a really good lineup of great genetics and great bulls and females. So thank y'all, for joining us here on the We Live It podcast. God bless.