The Road Ahead for Markets

by Michael Seek Fox Group at the Board of Trade

By the time this monthly issue of Livestock Plus hits your mailbox there should have been a ‘bear market rally’ to kick many bank stocks back up off the lows. However, do not be fooled by big bounces in the bank stocks. The 31 trillion-dollar debt of this not so United States is now being squeezed by having to pay much higher rates to finance the handouts and existing debt. Remember, just an additional 3% of rate hikes could cost the US government an additional 900 Billion dollars per year in additional interest costs alone. Many banking models apparently did not learn their lessons from the last 20 years and now it looks as if the current banking crisis will loom for many more months this year. Why is this relevant to the readers of Livestock Plus and livestock producers at large? Rising interest rates and a breakdown in financial markets with stagflation that will not go away is a dangerous combination. The stock and bond markets have basically had over 35 years of good times with the Federal Reserve running a quantitative easing program that caused them to buy over 7 Trillion dollars of Mortgage-Backed Securities and short-term Treasuries to force interest rates to go down and stay down long enough to create a ‘good economy’. The problem? The very same Fed Reserve has now said they will unwind that balance sheet of Mortgage-Backed Securities and short-term Treasuries over the next few years. The result of the unwind? Increased volatility of financial instruments and markets that could bankrupt 1/3 of the lower to lower-middle class folks who have credit card rates jump over 30% and have default on them and dent the earnings and balance sheets of the regional and large banks.

Take a look at the charts here and notice the substantial upside to rates on short-term Treasuries and then notice the breakdown in motion on the bank stock index.

The foregoing backdrop could cause either substantial decreases in beef demand on a dometic basis or drive the dollar up so much that exports of beef and corn and soybeans and wheat could fall off the edge. However, let’s say the Dollar is forced down to half its value to attempt to devalue it and the trillions of dollars of debt. You might think the Dollar devaluation would be a boon to cattle and corn producers. Not so fast. A massive dollar devaluation could make the input costs of cattle and or grain production so high that it would not be worth turning the tractors on.

Hedging asset classes from Cattle to Corn to Stocks is going to be crucial in the 24 to 36 months of Fed Reserve unwinding of their balance sheet to normalize rates and fight inflation. Will they win their fight with inflation? You let us know your thoughts and talk with us and call Michelle White here at our office in the Chicago Board of Trade building on Jackson and she will put you on the email distribution list of the 312 Market Advisory and also hook you with some veterans that can further educate you on the risk of loss on hedging your sundry asset classes’. Call Michelle White at 312-756-0931 from 8am-4pm Central Standard Time. You can also email Ms. White at mwhite@tradewithfox.com and share your email with her in confidence. We do not share or sell your email address with outside entities.

Remember, hedging livestock and grain needs and fuel needs and stocks with Exchange positions still has risk of loss and is not suitable for all livestock producers and investors who desire to hedge their operational business needs. Educational teleconferences with your team and bankers can be done late afternoon or in person here at the Chicago Board of Trade on Saturday’s. n

Dierenfeld, Trowbridge Inducted Into the Iowa Hereford Hall of Fame

By Becky Simpson becky@iowahereford.org

Mike Dierenfeld of Northwood and David Trowbridge of Tabor are the newest members of the Iowa Hereford Hall of Fame. They were inducted at a ceremony during the Iowa Hereford Breeders Association (IHBA) banquet at the Iowa Beef Expo.

The Iowa Hereford Hall of Fame honors people who have had a significant impact on the breed in the state.

for a 4-H project for his young daughter, Ashley. Those cows calved in 1986 and they brought the bull calf from one of them to the 1987 Expo, where he sold for $2,000.

A native of Deep River, Iowa, where his father was a veterinarian for about 50 years, Mike followed in his dad’s footsteps by getting his DVM from Iowa State University in 1979 and his master’s in 1998. He first practiced in southwest Minnesota for five years, before moving to Northwood in 1984 to start his own practice. The new location was a homecoming of sorts, for his wife, Joan, whom he married in 1978, was raised on a dairy farm in nearby Kensett.

Not long after the move they made the aforementioned purchase that started MDF Polled Herefords, choosing the breed in part because of the knowledge and recommendation of a partner in one of the vet clinics. The quiet disposition of Herefords was a major selling point. Over the last nearly 40 years, the herd has grown significantly. They calved 88 cows and heifers in 2022, but this year that number will be a little over 60. Last year they sold 20 pairs to a young breeder in Maryville, Mo.

Over the years, Mike infused his herd with several prominent Canadian bloodlines, including Remitall and Medonte Highlands. One year when he was at Denver with a 4-H group, he saw and “fell in love with” a bull named Remitall Jonathan, which he says was the best bull he’s ever seen. He went to Remitall sales and tried unsuccessfully to buy him. Mike’s pursuit of great cattle didn’t stop there. A licensed pilot, he’s flown himself to sales in Canada, Oklahoma, Wyoming, Montana, Kansas, Minnesota and Illinois.

Mike Dierenfeld

It’s appropriate that Dr. Mike Dierenfeld was inducted into the Iowa Hereford Hall of Fame on the eve of the Iowa Hereford Breeders Association’s (IHBA) annual sale at the Iowa Beef Expo and while he is president of the sponsoring Iowa Beef Breeds Council. In 1987, he and his wife Joan brought their first consignment to the Beef Expo – and they have consigned in all but two of the years since then.

Mike’s Hereford herd started in the fall of 1985, when he purchased two bred cows from Clarence Caraway of Lake Benton, Minn., with the intention of building a foundation

Mike’s dedication to the breed and the industry is evident in the many roles and responsibilities he has fulfilled over the years. He served two terms on the IHBA board of directors, from 2003-2009. During his tenure, he urged the association to start its own website and became its first administrator. Today that website is a major source of IHBA information and promotion. He also pushed the board to reinstate screening cattle for acceptance in the Expo sale, something that had been discontinued for various reasons. “That’s the best thing we have ever done,” he states. For more than 15 years, he and Russ Stickley alternated as the IHBA’s official vet for the sale, which was no small feat when consigning every year. Going through health papers consumed at least 3-4 hours the night before the sale, not to mention the time it took on sale day.

Mike and Joan usually consign bred heifers to the Expo sale and are pleased to see that bred heifers have become such a hot commodity in recent years. In the early days, the Dierenfelds were pretty much the only consignors to bring bred heifers. Due to their calving schedule, their lots often

"Hall of Fame" continued on pg 14

“Our SCR-sired Charolais calves have consistently produced 92-96% Choice and Prime, with 20-22% Prime.” -Joe from Colorado

“Our SCR bull came back from his first summer breeding season in great shape.” -Larry from Texas “We are very happy with the SCR bulls we have purchased over the last 6 years in terms of performance and profitability.” -Bob from Nebraska arrive at the Expo with baby calves at side. Mike times his breeding program to calve in January and February, so that he has most of his calves on the ground before he gets busy looking after animals of his clients who calve a month or two later. years as the manager of Gregory Feedlots Inc., while Mary served the children and parents at Bellevue Public Schools in Nebraska for 45 years before retiring last spring.

In 2005, Mike became one of the IHBA’s representatives to the Iowa Beef Breeds Council, where he spent three years as secretary, 10 years as treasurer and one year as vice president. He is now in his third year as IBBC president. He has found his time on the IBBC board to be rewarding and says it is the organization he has enjoyed the most. He looks forward to attending so much that in all his years of service he has only missed one meeting – and that was because he didn’t receive a notice about the meeting.

Raised on a dairy farm at Page, Nebraska, David’s passion for Hereford cattle started with 4-H in 1964 when a Hereford heifer was given to him by his great uncle. By the time he started college at the University of Nebraska-Lincoln, he had a small herd of registered cows.

After college and marrying Mary, he started a career managing Gregory Feed Lots (GFL) in 1977. He grew the reputation of the custom cattle feeding operation into a nationwide cattle-feeding industry leader. He has spoken at cattlemen’s organizations in dozens of states across the nation and has given feedlot tours to groups of people from across the country and tens of nations around the world who want to learn more about the cattle feeding industry.

He worked with Certified Angus Beef in building the brand. Gregory feedlots received the Feedlot Partner of the Year in 2002 and the Progressive Partner of the Year in 2011. David received the Quality Control Officer of the Year in 2005. Scores of articles have been written over the years about GFL’s management of data for the improvement of the cattle industry and their leadership in the cattle industry.

In the late 1990’s, David and Mike England started a Hereford herd, Beef Resources Partnership (BRP), to raise highgrading genetics for David’s customers at GFL. This started his involvement in Hereford organizations. He served on the Iowa Hereford Breeders Association board as a director from 2011 to 2014 and as president in 2015. John Hardy and David were instrumental in restarting the participation of the Hereford breed in the Governor’s Charity Steer Show.

He was elected to the American Hereford Association board of directors in 2011, serving for four years. David served as chairman of the Certified Hereford Beef board in 2015 and still serves as a director on the board today. He and Jerry Huth were responsible for starting the National Junior Hereford Association Fed Steer Shootout, which has grown into a great educational program for Hereford youth. In recognition of their efforts for the Fed Steer Shootout and the Certified Hereford beef programs, Gregory Feedlots was the recipient of the ”Friend of the IHBA” award in August 2018.

David’s involvement in beef industry organizations at the state and national level grew over the years. He served as a director, a regional vice president, president-elect and finally as president of Iowa Cattlemen’s Association in 2018 and 19. David currently serves on the National Cattlemen’s Beef Association Animal Welfare Advisory Group and as a director on the Iowa Cattlemen’s Foundation board.

David and his wife of 46 years, Mary, live in Tabor. There they raised their five children and are enjoying watching the growth of their eight grandchildren. David has worked for 45

David and Mary have focused on the education of youth through 4-H programs for many years. David judged the junior feeders project for several years in Fremont County. He and Mary were inducted into the Iowa 4-H Hall of Fame in 2021 for their Trowbridge Class at the Mills County Fair, using their Hereford calves for children that could not have cattle at their homes. Over 100 families have participated in 4-H beef projects using BRP Herefords during the last 12 years. This 2-year program allows eight new children to pick out, train, fit and show feeder calves their first year and then do the same the second year with a bred heifer. The Trowbridge Class requires parental attendance with their child at two classroom sessions and then at least 10 weekly training sessions on the farm with the calves. Mary and David are so proud of the effects that this program has had on so many children and families in need of an affirming, rewarding and uniting family project. n