Photo credit: Pratt Livestock, https://www.facebook.com/Pratt-Livestock-102004757850361
Steve Stratford, Assistant Manager of Pratt Livestock, Pratt, KS
Q: We’ve recently seen the cattle market take a steep dive, how has this affected your sales at Pratt Livestock?
The cattle market’s recent decline has affected the calf market substantially more than the yearling market.
It will most likely take till after the election before we can gain some traction in the markets.
Q: What are your thoughts on the CME’s increased expanded limits?
If the CME is supposed to be a pricing tool for end users and producers to hedge risk and to forward price a product, there wasn’t any need to increase the limits to the extent they did.
From an auction standpoint, this situation is a nightmare; these increased limits cause monumental moves per head and result in extreme volatility.
Q: Do you think the industry has gained any ground when it comes to negotiated cash trade?
The cattle industry has traded more cash cattle in the last four months than we have in previous years for the same time period. However, going forward we will most likely lose ground in the cash market. Six months from now cash trade will be back to levels experienced before the pandemic.
Q: What are your thoughts on USDA’s push to implement RFID ear tags across the industry by 2023?
This plan to implement RFID tags across the industry by 2023 is impossible. If the USDA does try to do this, it will cause many smaller producers to exit the business due to lack of facilities and/or the cost these tags will impose.
Q: Can you elaborate on your thoughts regarding the beef checkoff program?
When the beef checkoff was first implemented in 1985, it served its purpose and worked for all segments of the industry. During that timeframe packer margins were somewhere around $10-$75/hd.
In today’s world, packer margins have increased to exorbitant levels while producers continue to pay into the checkoff and see no real benefit in the program. Cattle producers and packers can’t use the same checkoff program. Producers need to have a checkoff program that goes to fight for their rights, not to increase packer profits..
Q: What is your projection for the cattle market heading into 2021?
Once we get past this election and if Trump is reelected, the cattle market will most likely gain some ground.
Looking twelve months down the road, very little wheat pasture and higher corn prices will help the cattle market gain some strength. Some positives to consider heading into 2021; the calf crop is smaller than a year ago, we won’t have any extra pounds from wheat pasture, beef demand is excellent and the increase we’ve seen in corn prices will keep feeders from overfeeding cattle. When all of this is considered, 2021 is shaping up to be a healthy year.