Sparring with the Neighbors

Posted November 9th, 2009 — Filed in Marketing, Testimonials

Can you feel better about your marketing decisions when neighbors look at you like you lost your mind?  For the past two weeks the casual conversation is “how’s the wheat? And have you turned out on any?”  When I tell them my wheat is doing super and No, I sold all my calves I had ready to turn out.  They give me a look like I have lost my mind.  I just spent the last month weaning and preparing these calves for wheat pasture and I up and sold them!!!?????  They think the bank forced my note or something else went terribly wrong.  But the local market here is screaming for weaned calves ready to be turned out on wheat.  The wheat market is down and farmers are searching for ways to scratch extra revenue out of their crop.  I simply sold the market what it was demanding and will replace them this week with what they don’t want; fat, bawling bull calves weighing over 590 pounds.  I sold thin, hard, 60 day weaned yearling that weighed 585 pounds for $106.50 net.  Looks like I can replace them with 590 pound bull calves for the mid $80’s  $120.00 gross margin on the trade.  My cost to turn bull calves into weaned steers ready to turn out is $75.00  leaving $45.00ish for profit. 

Forgive me Bud…  Projected breakeven of the calves I sold is:   calf cost $635 at the barn, $20 in freight, implanting and branding.  $.45 cost of gain on wheat until March with projected ADG of 2.75 is $150.00 per head.  So sell a 900# in march with futures at $96.00 for a 750# with $5 basis, a 4 cent slide and 2% shrink is about $86 at 880ish  or $760.00  leaving $105.00 head margin.  But now we’ve got interest, cowboys feed trucks, trailers, time and labor to pay. So lets project that at oh, say $50.00 and that leaves $55 bucks we hope.  But Mach is a terrible time to sell feeders because everyone is pulling off wheat so let’s hold them until the 1st of May and hope for a market rally. 

No thanks, I’ll replace them, put $45 in the bank now, and be willing to sell when price and value present themselves again.  Could be in a couple of weeks or next March. 

Smiling and meaning it . . .