One of my buyers from the sale barn said, “You cannot really blame this downturn in the cattle futures on the packer and retailer because of all the extra fund trading in our business.”
He said there were a lot more contracts than there were actual cattle. With that being stated, I still think the downturn probably started the morning after the filing that R-CALF USA did against the four biggest packers. Thus when the funds start selling it starts a down the market that doesn’t stop until they or some other large group decides to jump in and buy.
To my way of thinking there is no incentive for the packer and retailer to buy because they do not have to sell their product according to the drop in the futures. So they reap a huge benefit. We should not even have live cattle futures. We should trade beef prices thus convincing buyers of meat to buy according to beef price futures.
Whatever the case, do I begrudge R-CALF for filling the lawsuit? No. I’m just glad we have someone wiling to challenge the packers. We have way too many wimps in this business and too many are like politicians who tell you what you want to hear but are in bed with the packers. You do not have to be very intelligent to realize our business is very manipulated. And it is hard to make a living that way.
Since the futures started falling this last round starting April 24 until the first day went up a little on May 6, feeder cattle on futures fell $17.40 per hundredweight. June live cattle at the same time fell $9.43 per hundredweight. Choice beef in the same time fell $5.66 per hundredweight and Select fell $7.69 per hundredweight. If you multiply $5.66 times a yield of 64 percent then live Choice fat cattle only fell $3.62 on a live basis. Feedlot bids April 24 were $126 live and May 6 were $120.
I’m thinking I wish my family had been in the packing business, then maybe I could afford to run cattle.
An older cowboy was pretty much on his deathbed, laying there very weak. But all of a sudden he could smell the aroma of homemade chocolate chip cookies fresh out of the oven.
So it took all the strength he had to get out of bed and slowly he made it to the kitchen. He reached over and grabbed one of those cookies but just as he did a very large spoon whacked the back of his hand. His wife said, “Don’t do that. Those are for the funeral.”
Editor’s note: Jerry Nine, Woodward, Oklahoma, is a lifetime cattleman who grew up on his family’s ranch near Slapout, Oklahoma.