By Stephen Smoot
Local beef producers received a thorough education in livestock marketing and economics on Jan. 16. Kevin Shaffer, a West Virginia University Extension livestock specialist, explained the fundamentals of how to squeeze the most profit out of raising and selling livestock.
Before the presentation came a baked steak and green beans dinner followed by a broad selection of delicious desserts. The Upper Tract Producers 4-H Club made and served the dinner, then helped to clean up afterward.
Shaffer opened the presentation by explaining the difference between selling and marketing cattle. He told a story, almost in Goofus and Gallant style, of a producer that he knew who, “brings his cattle to market and does everything the way he wanted. He sold it the day he wanted, the time he wanted, and how he wanted to sell it.”
Then when the producer made less than others, “who do you think he blamed,” Shaffer asked. A respondent answered “the sale barn.” Shaffer said that the producer “never asked himself, ‘could I have done something different?’”
Producers, according to Shaffer, must “try to find a way to capture the value that we create.”
Shaffer described how some producers feel trapped by the market while others seek to try and manipulate or control it. He added that “you can’t control the overall market, but you can control your place within the market.”
He then laid out the current national trends, sharing that cow slaughter is up 13% over 2021 through last September, heifer slaughter up 10% over 2021, and replacement heifers down about 2.5%. Inventory has dropped by one million head. The herd should continue to retract over the next two years even as total beef production continues to rise.
Over the past two decades, drought in some parts of the United States has driven scarcity in the cattle market, pushing prices up. Shaffer points out that producers should not put themselves in a position for hoping that drought strikes so that they can profit. With inflation and supply chain issues ailing the industry almost across the board, price increases may not always make up for rising costs.
He said this involves, “doing the right thing instead of doing things right.” One can do the wrong things right, not make a profit, and wonder why.
Shaffer related that producers should develop “awareness and literacy of the market,” basically what does the market need the most and when does it want it. In essence, this means studying the market variables and finding out what the market is paying producers the most to create.
The rise and fall of costs combined with the impact of trends can guide producers to the most profit. Shaffer taught attendees how to use the information producers can access to create a profitable strategy for a livestock enterprise.
“The market will tell us what it wants you to do,” Shaffer said, “if you listen.”