Cattle markets a lesson in global economics

Monday's sale at Cattlemans Stockyard in West Point drew a full house with more than 70 trucks and trailers.
Staff Writer

Tractors cutting a swath across a dusty field in March and April, corn gleaming green in the fields in June, soybeans dangling thick on the bush in August, cotton as white as snow in November.

Those are the idyllic images most have of farming and farmers. Many people think except for maybe a little equipment maintenance, winter is their downtime. Don't tell cattle farmers that.

Monday's sale at Cattlemans Stockyard in West Point drew a full house with more than 70 trucks and trailers -- and a few cars -- filling the parking lot with license plates from Clay, Lowndes, Oktibbeha, Noxubee, Chickasaw, Lee, Union and other counties in Mississippi and Pickens, Lamar, Hale, Tuscaloosa, Fayette, Sumter and other counties in Alabama.

Farm experts say this is a critical time as farmers manage herds, cull non-producers, reduce or add stock, pay bills, and gauge where prices are headed.

"This can be a really important time, important as any other time," said Clay County cattleman Ronnie Kolb.

It showed at Monday's sale at Cattlemans with a dozen order buyers joining the dozens of locals snapping up cattle.

"This is the time of year producers are wrapping up and looking to next year, getting their herd ready. And some sell to be able to make the farm mortgage, pay property taxes, or the tractor payment. It's a mix of the practical and business," added Cattlemans co-owner Glenn "Toot" Robinson. "Monday was a really good sale. We've had a lot of them."

"By this time of year, a lot of them have made their marketing decisions so they are implementing them. They are getting rid of older cows that aren't performing, picking up stock, getting ready for the breeding season. If you have a cow that doesn't have a calf on it now, you probably are going to get rid of it. This is the time farmers are trying to cut down on unnecessary costs through the next couple or three months," explained Clay County Extension Agent B. J. McClenton.

Selling also can be for more practical reasons.

"It's Christmas. Some folks may be just trying to get a little extra Christmas money selling off a cow or two," Kolb noted.

As the fall months roll into December, cattle prices sometimes dip slightly. But that drop has not been as significant this year. In fact, after dropping nationally in October and November, prices are back to late September levels. And they are well ahead of where they were at this time last year.

The marks at Monday's sale at Cattlemans opened a few eyes.

"The prices are better than I expected. It makes me want to go home and get mine today," joked Kolb, who was at the sale scouting prices for when he sells off some cows early next month.

While it might be easy to look at the cows coming and going at Monday's sale as only a local product, they really are part of global economics.

"A lot of prices are determined by the futures market, what the markets say the price is going to be three or four months from now. You've got order buyers who may never have owned cattle before, but they are setting the market," Robinson explained.

"And if the economy is good and people are working and making money and feeling good about where things are, they are more likely to buy steaks than hamburger. It all factors in," added Robinson, whose had a hand in the business since he was a kid. "It boils down to whether people are buying beef or not."

World markets play a role. Japan is a big consumer of U.S. beef. It's economy is rebounding. While standards for beef in Japan likely mean Mississippi beef won't be sold there, any uptick in demand for U.S. beef from other parts of the country means more demand for local beef.

"It's all connected," McClenton said.

Other factors also are impacting prices and demand across the region. Drought in 2016 hit many farmers hard, reducing hay supplies and forcing some producers to reduce their involvement, McClenton said.
The number of cattle in Clay County dropped from 19,800 to 18,700 early this year, according to estimates from the U.S. Department of Agriculture. Oktibbeha County's numbers fell from 14,700 to 14,000 while Lowndes' totals slipped from 10,200 to 9,800.

But this year has been a much better hay year on Clay County's 420 farms, leaving many farmers with a good supply to get through the winter. The same for the 402 farms covering 104,674 acres in Oktibbeha County and 413 farms covering 119,424 acres in Lowndes County.

"It's been a good hay year and grasses have come back in the fields, people have got a lot of it, so some are buying some extra stock because they can feed them at little expense and sell them in the spring," Kolb explained.

"You can buy a cow with a calf, raise the calf, and bring them back this spring. If you spend $1,200 now and sell them for $1,700, it's a pretty good return and you haven't had to invest that much," he added.
Record prices five years ago also prompted some livestock owners to sell and take the money, but overall, the numbers have remained relatively steady, according to USDA statistics.

"You see some movement in and out but not anything major. You don't get in this business to get rich, it's more of a tradition or heritage type of thing. Or it's a way to diversify your farm operation," McClenton said.

Cattle also provide flexibility.

"One of the good things about owning these things is you can always sell some and get a little cash," Kolb said, sweeping his hands across the sale ring at Cattlemans.