Marketing Update - by Barrett Simon

Customize Your Approach to Calf Marketing

All too often, marketing gets put on the back burner until the weather gets cooler or we flip the calendar and realize it is time to get paid for our previous year’s efforts. In most aspects of a working ranch, we think with a long-term mindset. Whether it’s range management, genetic selection or even transition planning, the agriculture community places a big emphasis on what life looks like five, 10 or 20 years down the road. However, it seems as though we often look through a very narrow scope when it comes to getting paid. Given the recent volatility in most, if not all, ag commodity markets, a long-term – and potentially unconventional – plan may be in our best interest.

It is easy to focus on a three-week window, it is easy to continue with the same marketing process we have always done, it is easy to get behind in the other aspects of managing a cow herd. One sale barn owner shared with me this spring that he could tell me two months in advance who was bringing calves to town and which week they were coming because, “That’s just the week they always come.” In the same breath he mentioned that they work just as hard for cattle weighing 500 pounds as those that weigh 800 pounds and that they advertise in all of the same ways in September as they do in November.

While calf marketing is likely not that steady for most of us, I do believe it is easy to narrow our focus to comparing costs and returns over a three-week time period and then decide when would be the greatest opportunity for market success within that small window. There is no part of the cattle business that is “one size fits all” and, for many operators, it may prove to be exceedingly valuable to review the ranch’s current marketing plan and explore other more profitable options.

The USDA’s recent report highlighted a waning U.S. cow herd and a calf crop estimate that is approximately 3% lower from its peak numbers in 2018. Many producers are looking at alternative calving seasons and marketing outlets in the future due to a frustrating past couple of years. Unfortunately, our friends in the North and Northwest region of the country are getting dealt a tough hand as drought continues to set in. With that in mind, even though early summer tests for fall-delivered calves are showing signs of life, 2021 may be the year to take a deep dive into the positives and negatives of various market outlets. High-dollar corn and hard-to-find hay in some regions may drive weaning breakevens higher than they already are. On the contrary, for those set up to do so, an unorthodox market dynamic due to the backlog of cattle may provide incentives for some to hold off on selling calves until after the October run as some analysts project calf prices to steadily increase as we move later into the year.

While our commercial marketing team greatly appreciates the uptake and attendance of Red Angus special sales, we also encourage producers to make sure the date set by our team and your regional auction market manager are in YOUR best interest. If drought conditions and input costs make an earlier sale the more profitable option or if the promise of rising markets show additional dollars to be made later in the year, our team is here to promote those cattle just the same. Ultimately, the marketing window that gives your program the greatest opportunity for profitability with Red Angus and Red Angus-influenced calves is our primary concern. Regardless of whether the most profitable market falls within those same three weeks in October or November, we hope that your marketing venture starts with a Red Angus value-added program as we continue to use tag enrollments to not only better promote our commercial producers’ cattle, but also to leverage the influence of Red Angus genetics, nationally, at the packer and retailer level.