As 2016 comes nearing to a close, Farm Director Ron Hays consulted Livestock Market Economist Dr. Derrell Peel on what strategies he suggests producers consider to ensure they get the most bang for their buck over the next few months. He says there are a few promising options out there, but discloses there is some lingering uncertainty in the markets.
Dr. Peel suggests that with all the available forage to work with this year, producers should crunch the numbers and decide whether or not it would be feasible for their operation to retain their calves, and pack some additional weight on them and implement a preconditioning program. He says, his calculations make this option look fairly attractive and even in some cases, he says some producers may even want to consider retaining cattle all the way to the feedlot. But again, some of the details are a guessing game at this point.
“There’s some issues with both of those retain strategies in that futures isn’t giving us a lot to work with in terms of pricing these cattle,” Peel said. “But at the same time, the fundamentals really look like they’re somewhat attractive in this.”
For stockers looking to buy cattle this fall, Dr. Peel says that although the market is a little ambiguous, there is a value in gain that suggests the numbers will work.
“I think it’s going to work, but I do recognize that you really kind of are taking your chances at this point - you’re kind of flying blind - because we really don’t have anything out in the future to work with,” Peel said.
Click here to see more...