Cattle Prices Sink quicker than the Titanic!

If you want to see grown men and women cry just visit any livestock auction on a Friday night. The shock and despair is palatable.  We all knew cattle prices were going to go through a correction but this is way beyond what most ranchers planned for. No matter how meticulously you adapt your business strategy, these prices are hard to swallow. 

​We are a tenacious, hard-scrabble, resilient group and we are all used to difficult times and sacrifice but coming off the highs of recent years to the lows of today is downright terrifying.   Unknown to most Americans, 97% of the beef in this country is still coming off of family-owned ranches.  Every day Americans like you and me working hard to make a living and feed our country.  This new extreme in prices is going to hurt a lot of people.  I believe many will go out of business.  Why has this happened?  Several years back when the midwest and the west experienced extreme drought and other catastrophic weather events many ranches sold off a large portion of their herds which in turn created a major glut in the number of cattle available in the United States.  During this time cattle numbers were the lowest our industry had seen in fifty years, but when the pendulum swings one way it always swings back and if you're not careful it will cut your head off in the process. This is exactly what we are seeing today.  The industry feels cattlemen created their own worst nightmare because when the pendulum swung back it was because we then created the largest herd expansion in fifty years.  Too many cattle on the market has now caused prices to implode.  That's a hard one to put on your fork and swallow!

We are in for a tough time economically in this industry and ranches that took on too much debt during the high prices will be scrambling for survival now, but we all know hindsight is 20/20, casting stones is futile and survival is everything.  So how does one survive this market and keep their business in tact?  Do what cattle men and women are known for; hunker down, get down to basics and trim the fat off of our organizations.  We are used to sacrifice and we are committed to our industry and our ideals, we don't do this to get rich, we do this because we believe so strongly in what we do for a living, no one ever said the cattle industry was easy.

Some survival thoughts:  
1) Go over your business with a fine-toothed comb and cut out any expenses that are absolutely  not necessary.
2) Renegotiate any agreements or pricing tiers you may have.
3) Pare down the herd to focus on superior genetics.  The best calves will bring the most and those consistently providing the market with superior calves will survive, the rest may not.
4) If you have debt take a hard look at it and try to lock it down if it isn't before interest rates rise or pay it off if possible.  Going forward don't take on any additional debt unless it is absolutely necessary.
5) Take a hard look at what you do best and focus on it, forget the rest. Trying to focus on too many things is a success killer.
6) Think outside of the box and maybe you will discover new markets or new ways of increasing your profits during this challenging time.
7) Sell anything you don't  need.

​More than anything else, remember that we are a scrappy bunch that always survives.  We have been through this before and will again.  Keep the faith, love your land, your animals and your families and above all else, remember you reap what you sow. Think positive!

Best of Luck to all!
Godspeed,
"The Princess Rancher"