CALIFORNIA CATTLEMEN’S ASSOCIATION ______________ Since 1917 1221 H Street Sacramento CA 95814 (916) 444-0845
4 California Cattleman May 2022
ALWAYS A PLEASURE DOING BUSINESS WITH YOU
by M3 Marketing’s Matt Macfarlane for the California Cattleman
You know you are in agriculture or you are getting older when the weather is always a topic of conversation. Like most of you, I spent much of my winter and early spring holding my breath, waiting to welcome rain to the West Coast. While it wasn’t what we were hoping for, many calves were weaned early, replacement heifers were begrudgingly sent down the road and deep culling cuts were made in cow herds to accommodate the lack of rain. Though we didn’t get the rain and subsequent early grass growth that we needed, we did get some good moisture on Easter weekend, which had many of us echoing the popular saying, “better late than never.” As a life-long Californian, I learned at an early age that we will take whatever moisture we can get when we can get it. As dry as it is, when Mother Nature finally lets loose more moisture, the economics and current inventories are going to create some of the highest-priced feeder cattle in history. Kevin Good, vice president of industry relations and analysis at CattleFax, recently reported that U.S. beef cow inventories have fallen more than 700,000 head from last year and are off nearly 1.6 million from cycle highs. “Drought, market volatility and processing capacity challenges affected 30 to 40 percent of the cowherd over the last year,” Good said. The feeder cattle and calf supply will be 675,000 head smaller than last year, totaling 25.5 million head. Fed cattle slaughter will decline 400,000 head lower compared to last year, at 25.7 million head. Commercial beef production will contract over the next several years starting with a 2 percent decline in 2022. Drought, tight forage supplies and macroeconomic factors are forcing producers to cull deeper in their herds. Therefore, higher beef cow slaughter pushed non-fed cattle slaughter to the highest levels in decades in the first three months of the year. As I entered winter and spring bull sale season, with events both here in California and in the Pacific Northwest, I was apprehensive of what might be in store as we filled bull buyer orders and prepared for the production sales than were ahead. Though I knew we would be marketing
some phenomenal cattle, I would be lying if I said I was confident sale prices and bull buyer numbers would be solid through the end of the season. Overall, sale season was strong, prices were high and seedstock producers weren’t left with many, if any, bulls to trade. Even with the rough grass year that I knew lay ahead, one theme continually rang true – genetics matter. To me, the value behind good genetics has never been more evident, both commercially and in the purebred arena. High-quality cattle with outstanding, value-added genetics and complete health programs, complete genetic evaluation (age, source and genetic verification commercially— performance, fertility ultrasound and DNA evaluation in purebred programs) continually gain more premiums than commodity cattle. The hard work producers are doing to improve their product is paying off compared to the market, relatively speaking. As we see calves sell at auction markets and on the video this summer, I encourage you to watch for the ones that fetch premium prices. What kind of programs do they use? What kind of bulls do they buy? I think you too will notice the trend and I encourage you to invest in those kinds of quality genetics as we move into California bull sale season this fall. Now is the time to be doing your homework to ensure the quality of your future calves, the longevity of your cowherd and, in turn, your bottom line. Additionally, take a hard look at your genetic sources and make sure they are performing up to your expectations and the program you are using stands behind their bulls. Many commercial producers I have talked to this spring have told me bulls that are native to the area they are sold in and are raised in similar environments tend to adjust and hold up better than the counterparts from drastically different climates. In closing, I hope to see you at CCA’s Midyear Meeting in June or a video sale event this summer. I would love to hear your thoughts on the state of our industry. For me, being around hard working people who are optimistic in the face of inflation, drought, political climates, world conflicts etc., is inspiring and one of the reasons I love my line of work.
