The market after ‘Atlas’
December 2, 2013
Generosity, kindness and a spirit of community have saturated the upper Midwest following the legendary storm "Atlas" and her heartless thrashing of livestock and producers in the region. It seems that thoughtful gifts to the affected operators have been limitless and yet the devastation continues to haunt ranchers every time they look out the pickup window or over the ears of their favorite saddle horse.
The loss of cattle, sheep and horses will surely affect the pocketbooks of individual ranches and local communities for decades. Scott Vance with Faith Livestock, Faith, S.D., said he isn't sure if tighter supplies of feeder calves and bred females is pushing prices up. Vance said that probably more than 10 percent of weaning-age calves in the region were lost in the blizzard.
"The market is good now but where would we be as an industry if we hadn't had the blizzard and everyone could have sold their usual number of calves at these prices?" Unfortunately, Vance said, many producers are selling fewer calves than they had planned or are being forced to sell heifers they would have retained as breeding stock. "If they could have sold more calves at these prices maybe they could pay more for a cow or bred heifer. It just makes a person wonder how much better this could have been."
Many producers are in a holding pattern, Vance said. They are retaining cows in order to maintain or build herds after being forced to cull deeply due to a couple years of drought.
John Morford, Office Manager for internet livestock marketing firm Frontier Stockyards, based out of Miles City, Mont., said their affiliate auction market, Miles City Livestock Commission, recently raised over $5,000 for the Rancher Relief Fund to go toward affected producers. The storm, though, doesn't seem to have had a big affect on the feeder cattle or bred female market in Montana.
"We actually didn't have any producers that were directly affected by the blizzard," Morford said. Frontier, which markets about 18,000-23,000 head of cattle annually, specializes in real-time promotion of the cattle they sell. They are different from the traditional satellite selling businesses because they place videos and information about consignments online and bidding can start immediately, rather than waiting for the next catalog sale. This allows their customers to take advantage of current market upswings, he said. "Customers have called us and asked us to list their cattle right away when the market is moving, and within five minutes we can have the information on our website. We've sold the cattle the same day the customer called."
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Their representatives and customers are in the mode of delivery during the fall months, Morford said, but after the first of the year, interest in buying and selling bred females and yearlings will pick up. He expects the market to remain strong throughout the spring. "Your good Angus cows and good Red Angus cows are still at the top," he said, noting that interest in good Red Angus females has grown in recent years, and that black baldies are always a mainstay.
Representatives participate in shipping day, representing both the buyer and the seller to the best of their ability, Morford explained. Buyers are generally not present. "We have a good enough rapport with our buyers and a reputation for honesty that they don't often see calves until they are dropped off in Iowa or wherever they end up," he said.
"We don't see much that is going to stop this market for a bit," Morford said. "Overall cattle numbers are down, the price of corn is down, we don't see this market giving up much, we think it's going to stay right where it is."
Vance agrees. "It's at an all-time high. There's always something that makes you worry about the market but I don't see right now what it would be outside of some unknown influence. We've taken some terrible bad news this year and it still hasn't affected the market." Vance goes on to explain that supplies in the coming years will be diminished in western South Dakota due to cow losses, bred heifer losses, and even the "forced" sale of replacement-quality heifer calves due to storm-related financial pressures. Those lower cattle numbers could contribute to continued high feeder calf prices. F