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Sale Barn Study | May/June 2022

Volatile Markets

contributed article by Kirk Lynch

Lynch Livestock Inc. and Humeston Livestock Exchange, Humeston, Iowa

Riding the Cattle Industry Rollercoaster

Well, another month has passed, and it is the same old story as it has been, extremely volatile markets and a lot of uncertainty. I have asked several questions to people who have been through times like this before and I always ask, “Do you remember a time when things were this extreme?” I will say I have gotten some comfort in getting answers that they probably cannot remember it like this, but it probably was.

So, keep your chin up because if you are like me, you always think brighter times are just around the corner. One promising thing I did see this past week was pictures of crops being planted in Ukraine, so maybe all hope is not lost.

The fat cattle market seems like we are just about to take off, seeing some extreme tops around $1.50 and we are not going to take too much of a dive this summer. Cash cattle in the country bring around $1.40ish and this summer I think we will bump around that number most weeks.

Even with corn, soybeans, and wheat all skyrocketing, we are still seeing feeder cattle selling very well. The past has told us that there is a bubble that will burst at some time with high inputs, but the low supply numbers will keep the feeder market strong. The few light calves have been bringing extremely well as there are fewer of them being backgrounded and put on feed. The ones that are going to be backgrounded will be worth a lot this fall as there will obviously be fewer of them.

The bred cows and heifers are getting stronger as we get closer to grass. Seeing some young pairs bring $2,000 and more. We are heading to the lowest cow herd that we have had since 2014, which was the lowest that we have had since the 1950s. At some point, owning cows is going to pay off soon.

The cull cow bull and cow market has taken off with some bulls around the $1.20 mark and some fed cows in the 90s. I look for this to continue as well, as we are going to be looking for a supply of beef.

I hope you all have a great summer. The outlook for the cattle and beef industry seems to be extremely positive going into the fall and the next couple of years even with the high inputs. I hope for rain and terrific weather for everyone until I speak again to you in August. If there is anything you need or want to talk about feel free to give me or the guys at the barn a call.

Happy summer!

Kirk Lynch, Lynch Livestock Inc., Waucoma, IA

Kirk is the Beef Division manager for Lynch Livestock Inc. and oversees all aspects of their backgrounding and cattle feeding operations throughout Iowa and Kansas. He is also deeply involved in the newly re-opened Humeston Livestock Exchange in Humeston, Iowa. In addition, Kirk and his wife Mary own and operate Heartland Simmentals in Northeast Iowa, which is a seedstock operation that consists of 500 registered Simmental and Angus cows. They have four children: Gabrielle (8), Brayden (7), Vivian (5), and Bianca (1).

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