Current Progressive Cattle digital edition

Uncertain times

Published on 24 June 2020

If I had a dollar for every time I heard “these uncertain times” when talking about the current state of the beef industry, I could probably help fund the USDA’s Coronavirus Food Assistance Program.

Sure, these are uncertain times, but when has it ever been certain in the beef industry? Could you have predicted the drought and consequent herd liquidation in 2011-13? What about the Tyson plant fire late last summer? Or for some of you more “seasoned” folks, the bovine spongiform encephalopathy (BSE) event of 2003 or the farm crisis of the 1980s?

Some are calling this coronavirus pandemic the most volatile period in the history of the livestock industry, and they’re probably right. But almost as worrisome is the division on fair markets and trade, and the impact the virus’ mess could have into 2021.

It doesn’t take long before all of this can start to feel a little heavy.

In a Ranching for Profit School newsletter, Dallas Mount encouraged producers to “take control of the things you can control.” For example, at the time of his writing (May 13), futures prices estimated 500-pound steers in Wyoming projected to close to $900 this fall. Mount asked readers to see if they could put together a plan based on $900 calves that would create enough margin to cover their overheads and profit target. And, if not, what could they change that is within their control?

Some things to consider:

  • Is the gross margin of your enterprise where it should be?
  • Are your overheads too high?
  • Is turnover appropriate?

Mount suggested producers determine which of those three aspects are the weakest link on their operation and then come up with three strategies to address it. He said some producers might not hit their profit targets this year, but others are finding real opportunities to serve customers and create cash flow for their business.

The truth is: No one ever really knows what the market is going to do, and this year’s predictions can attest to that. Instead, try to focus on those things that can be controlled such as costs, overhead structure, forward price, alternative marketing outlets and even lobbying for change. And if you’re one for change in our market structure, be sure to do your research before getting involved.

It’s my hope the beef industry will come out of this a little stronger, with improved public perception, as better-informed lobbyists and even better managers. The scrappy, “go-getter” attitude is what built your operations, and it is what will get you through this unforeseen challenge. So do what you do best: Dust yourself off, grab hold of those reins and get back in the saddle. There are good things ahead, I’m sure of it.  end mark

Cassidy Woolsey
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