“In spite of some of those headwinds, these markets have performed about as we have expected,” Blach said. “We are going to end up averaging between $1.42 and $1.43 for fed cattle for the year. That is right on the forecast for what we shared with the industry back in January.”
Grain and roughage prices, Blach said, have been the biggest shock to the system.
“We just aren’t generating much profitability out here for cow-calf producers,” Blach said. “That has been very difficult. Even though calf prices are 35 dollars and 100 higher than a year ago, there is still not much money being made.”
There is a high probability, Blach said, that November and December will yield the highest profits of the year. This year, he added, is referred to as a “non-expansion” year.
“We typically take out the spring highs and make higher highs in the fall, and this year has been right on schedule,” Blach said.
As for the drought, Blach said because of the lack of grass availability going into the winter season, not many cattle will be able to turn out.
“This fall, the number of cattle in our winter grazing programs is down significantly so far,” Blach said. “The reality is, even if we do, we have got to remember that our feeder cow and calf supply outside of feedlots is down 800,000 head.”
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