From the April issue of Drovers.
Everyone involved in the cow/calf sector, commercial or seedstock, exited last fall's sale season reeling from what appeared to be an inevitable storm. Skepticism quickly replaced the optimistic zeal that carried us through the first half of 2015. Feeder and fed cattle were not the only ones feeling the sting of price correction. Bull and replacement female markets slammed head-long into a figurative wall of their own. Cattle producers from coast to coast became exasperated attempting to understand the bleeding and determine how long it would last. As the year came to a close, cattle markets hit bottom and volatility slowly subsided.
To our good fortune, domestic demand appears to be holding strong, signaled by steady boxed beef and retail prices. This is driving some optimism in the market and will continue to do so as feeders make slow gains with grass coming on. Bullish pricing could continue if the cold storage report coming out soon is positive with regards to captive supply.
Collectively, we all seemed to enter spring bull sale season with a fist full of hope and a duffle bag filled with cynicism. During the build up to spring bull sale season, I received countless inquiries on the topic of bull pricing. What will sales be like? How soft could they be? What is a good bull going to cost?
Now that we have reached the half-way point of spring sale season, the dust is starting to settle‚Äîexposing the answers to those questions. Demand for quality herd bulls has been more robust than expected from Montana and North Dakota to Texas and places in between. Moreover, the demand for long bodied, stout-made performance bulls has swelled along with elite, curve benders and calving ease standouts.
Although bull sale averages have been positive and strong, there are some observations worth noting. Sale prices have been highly variable thus far. Most sales have been filled with peaks and valleys, possessing no real middle ground. Bulls that are rock solid in their physical type, data and EPDs come hotly contested. Bulls with a flaw, no matter how big or small, seem to find themselves left on the cutting room floor.
Buyer discrimination is as high as I have seen it in a long time. It appears supply and demand fundamentals are starting to fall in line with what we should expect to see.
With bull supplies in an abundant state, marginal individuals are getting sorted exceptionally hard.
In the Midwest, I've noticed a trend this past year that could be pushing some of the bull demand. Cattle producers who had been running stockers started replacing those production units with cows‚Äîa lower-risk investment. With the growing number of cows in the Midwest and the increase in heifer retention, it is easy to see why
producers are demanding larger-framed performance bulls with elite calving ease traits.
For producers in the seedstock business, use this report card as a tool for strategic planning. It will be very important in the next few years to maintain a razor-like focus on your customer's demands. Producing a animal even slightly outside of the customer's bull's-eye could make it unmarketable. Discrimination in the market place will only continue to escalate.