In today’s Beef Buzz, Senior Farm and Ranch Broadcaster Ron Hays speaks with Industry Consultant Dr. Nevil Speer who began by emphasizing the unprecedented nature of today’s cattle prices. He explained, “Producers I talked to, they keep talking about how great it is. They’re surprised. They never dreamed that they would see prices like this and in profits too, prices have way outrun any rise in cash costs that is required to run cows, and so it’s just been amazing.”
Looking at supply, Speer noted that the industry hasn’t yet hit its tightest point. “The narrative out there is that we’ve been running tight numbers, we’ve kept up in terms of beef production. I can’t imagine what’s going to happen when we start keeping heifers at home and then things really get tight.”
Speer also addressed management decisions during the current strong markets. “We’re clamoring for cattle, and that’s always what happens in strong markets. But… while feed is really cheap, every producer I work with, I am encouraging them to keep them, wean them and keep them at home, feed them and make that money. Why give that to somebody else? If you can do it at home, because the market is working in your favor.”
He stressed that producers must never lose sight of the consumer. “Your customer is what’s generating profits for you, and that’s the consumer out there, and we need to be mindful of that all the time. You ultimately work in a consumer business.”
On managing new profits, Speer cautioned, “With these prices and ultimately operating profits that producers are generating, it’s like no other time before. So let’s be very careful in how we invest those dollars. Probably the best strategy is to reinvest them towards something that’s going to increase your productivity and efficiency on the farm and the ranch for the years going forward.”
He also warned against complacency. “Let’s think about doing some risk management, there is more equity at risk in this business than ever. One of my other favorite sayings is things that never happen happen all the time, and if you don’t protect yourself, you’re ultimately going to kick yourself and really regret that.”
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
