COLUMN - Ruminating

by Martin Unrau

It is mid-March and it looks like spring will be here soon. It has been a long, cold winter and the cattle have consumed a lot of feed.

The producers in the Southwest, Westlake and Interlake have had feed shortages this winter and it is good to finally see the provincial and federal governments come to the aid of those living in RMs that were declared disaster areas last fall. The AgriRecovery payments should be enough to help them buy feed to get them through the winter.

The New Year has seen some strength in feeder cattle prices and also in cow and bull prices. Once again, we are seeing large premiums in the age verified cull market. I also had a conversation with a large western Manitoba feedlot owner who tried to do some deals with some Alberta feedlots and those guys were not interested unless the calves were age verified. I’m not saying you have to age verify, but facts are facts. And it isn’t that hard to do. Heck, I don’t even know how to turn a computer on, so I just find someone else to do it for me. How easy is that?
M-COOL in the U.S. still has us on our toes and the final rule should be in place on March 16th. We hope this will bring some stability to the cattle industry.
It seems to me that I am meeting more positive, optimistic people in the last while than I have seen in a long time. There are a number of aggressive producers looking for grass calves this spring and there is optimism about the fall yearling market.
We have to remain focused on producing high quality cattle. This is something that is easy to lose sight of when dollars are tight. But in order to capitalize on the opportunities that will be there when this thing starts to turn around (and I think it will be soon), we have to continue to produce top quality calves that result in high end beef.

I would like to suggest to every producer that you step back and pretend that you don’t own your cattle or your farm. Take a good look at what you have and think about what needs changing. Look at everything from calving dates to the bulls you buy. Go to the auction marts and you will see that some breeds and crosses are bringing more money than others. If your neighbour is getting $60 more a calf you have to ask yourself why.

I know what it is like. As farmers we sometimes just put our heads down and work and think we don’t have the time to make changes. But it gets to the point sometimes that we are working our butts off and not seeing the results we want. That’s when we have to stop and figure out if there is a way to do less labour, incur less cost but make more money.

Right now we are also seeing big cattle bringing the same dollars per pound as smaller animals in the fall. This tells me I should take a look at backgrounding. Now I know you might be thinking that you can’t afford to try it because financing is tight. Well, there is an answer for that. Try the interest free cash advance through the Manitoba Livestock Cash Advance program. You can borrow up to $100,000 interest free. I don’t want to sound like an advertisement for the program, but I know it has worked for a lot of guys, me included. It is an excellent management tool to stretch your options if cash flow is a problem. The number to call is: 1-866-869-4008. The office is in Winnipeg and the people there are friendly and helpful.

Other things you can look at are your feeding habits which should be scrutinized so you can think about what changes you can make now and over the summer to plan for next year. In times of uncertainty we have to control what we can and watch closely the things we can’t.

You need to watch the market, the dollar and feed prices very closely. Pick your spots and be ready to sell when you think the time is right. You will be surprised by the difference when all things are taken into consideration.

And this is something that backgrounding taught me because instead of just dumping my calves in the fall and they became someone else’s problem, I had to start paying attention to all of the factors involved because I still had an investment in those calves. It made me a better marketer and while there is definitely some luck in marketing, luck and having an idea why you are doing often brings good results.

When I first started feeding calves, a wise old owl named Don Ransom gave me some advice. Now looking back I guess you could say he wasn’t old since he was probably about the same age I am now. Anyway, Don bought some calves for us and I kept asking him when I should move the yearlings he had bought for me. Finally, he growled, “Know your costs and sell when you can make a dollar. Don’t get greedy, but make a profit and you’ll never get filthy rich, but you’ll never lose the farm either.” Looking at it now it seems so obvious, but at the time when I was young and inexperienced, it was tremendous advice.

And finally, believe you are for real. If you want to still be in this business five or ten years from now, start acting today as if that is where you will be. You’d be surprised by how the answers you need will come at just the right time if you are focused on a goal.

So long for now and enjoy the spring.

- Martin