Are bred heifers undervalued?
Are bred heifers a buy here? With the chaos in the markets of recent days, bred heifer prices cooled in the auctions. Our calf prices are $2/lb higher than they were last year and yet bred heifer prices are trading at similar levels. The cash flow returns on these bred heifers over the next few years easily justifies higher bred prices even if we get a correction. If calf prices fell to $5/lb which would be a huge drop, these cattle still pencil. These are phenomenal opportunities to buy cattle that pay for themselves in a couple years. It used to take 8 years to pay off a bred heifer, remember? This chart shows the correlation between bred cow prices and calf prices. Bred prices are affordable relative to calf prices, have a look.
Calf prices are $2/lb higher than this time last year, yet bred prices are the same? That seems pessimistic. When you look at the ratio of calf prices to bred prices, breds should be higher than they are today based on the cash flow potential of these calves. When have you been able to pay off a bred heifer in a couple years? It used to take the life of a heifer to pay her off, remember? The market is panicking due to the volatility in the futures market these days, but bred prices are looking very workable in light of their future cash flows. Have a look.
Avoiding that void in the ring
Commercial bred heifers on the internet sales in Canada in December averaged $4543. The range on those heifers was $2200-7600. Whew! Great for the one selling at $7600, a waste of time for the one selling at $2200. Coffee shop talk always talks about the $7600 heifer, but when you actually go to deliver your heifer for sale in the ring, what if you get $2200? It could be devastating! We need auction marts for price discovery and liquidity, but they can be a challenge when marketing breds. On this site, you set your price and give yourself time to get the deal done at your price and according to your terms.
Welcome to Cattle Talk
Welcome to a new way of marketing your breeding cattle. No high pressure sales decisions. No shrink and auction mart stress. Here you buy and sell cattle on your terms, safely and easily. We look after the stressful negotiation and make sure no cattle trade hands until both parties are happy. Even better, you can decide when and where these cattle will be sold. This means forward selling opportunities and arranging for the seller to keep the cattle until you are ready for them. Try us out, we are here to make it a smooth process whether you are buying or selling.
Welcome to Cattle Talk. This is where we will have commentary about the cattle industry and breeding cattle in specific. Welcome also to a new way of marketing your breeding cattle. No more high pressure sales. No more shrink and freighting cattle around to auction marts. No more guessing what you will get for your cattle. No more buying cattle that you don’t have enough information about to make an informed decision. On this program, you set the terms whether buying or selling. We offer the most information possible about the cattle and allow you to negotiate the terms with the buyer or seller. No money transacts until both parties are happy. We also allow you to do forward sales or negotiate to keep the cattle with the seller until the buyer is ready to take delivery. We hope you will try out our services!