Last week Dad and I went to a livestock auction with the intention of buying enough cattle to make a pen out of a group of cattle that we had on wheat pasture.
We were both surprised by how high the cattle were selling. Prices were considerably higher than market reports from the previous week had reported. All of the cattle were selling above our budgeted price range. After watching the sale for almost two hours, Dad and I had not seen a single animal sell for poor value. Even the lower quality cattle were selling extremely well. We both concluded that we were not going to be able to source the cattle we wanted that day within our budget and decided to stop wasting time continuing to watch the sale.
After leaving the sale, Dad and I discussed our viewpoints on that day’s sale, the current cattle market, the cattle that we currently had, and our marketing plans. Within a few minutes, we had changed our plans from feeding out the cattle we had just pulled off wheat to reselling them. While we were not comfortable buying cattle for the prices we had seen at the sale; we were more than happy to sell for those prices.
We loaded our cattle up late that afternoon and hauled them to a sale barn for the next day’s sale. We were pleased with the sale results.
While selling cattle not only profitably, but also sooner than expected is fun; I definitely have my concerns about the current market. Over the past fews years the cattle market has shown the ability to be very volatile. Last week was another example of that. I seriously doubt that the recent rapid increase in prices is sustainable. I even question if the cattle being purchased for these increased prices will feed out profitably. Currently, I see more downside than upside to cattle in the near future.
Some people will make a considerable amount of money during these volatile price swings. However, we are proceeding very cautiously with any purchase decisions that we make, if we make any at all.
