Current Edition

current edition

Where is My Crystal Ball?

Written by Dennis Sun
    An historical event took place this past week when General Motors filed for bankruptcy. Who would have ever thought this would happen in America? And, to think it happened in just a few months. The bankruptcy itself is small news when you consider GM’s new owners — our government, the Canadian government and the unions.
   I realize unions have always been major players in the automobile industry and some, including myself, have said they have to be one of the downfalls of that industry. At some point in the early stages of the industry Unions were most likely needed. Today, as with most everything else, they went too far. But, our auto industry gave them the deal they wanted and now they have helped elect our current President and GM owes them a contract, so they are in the driver’s seat, like it or not.
    I, as well as a lot of others, don’t like it. Where do you draw the line once government starts owning businesses? There is not much we can do about it at this time, but I hope it’s not a trend we’ll see in the future of America. These times are really troubling for us to witness as our auto industry, banking and our housing industry going to pot. It’s all caused by easy money and greed.
    Now, the big question is how this is going to affect the cattle and sheep markets. More specifically, how is this going to affect demand for beef and lamb? After all, that’s the market driver here in the U.S. If you are out of a job, eating a steak or a lamb chop is not high on the grocery list.
    As we all know, with high corn prices last year, how we market our cattle is changing. In years past we could figure what weight of calf to raise for fall markets to make our ranch the most profitable. In essence if it cost us 85 cents a pound to raise a calf, we made money and if it cost us $1.20 a pound to raise a calf, we had to find a way to ease the debt load or lower costs to raise that calf. One could just raise a black calf, give it some shots and maybe wean it for at least 40 days and get a good price. No one questioned genetics or feed efficiency. Having a reputation herd certainly helped, but being a certain color or breed helped more. Let’s face it, we didn’t market our calves, we just sold them. The good calves all too often kept the price up for the bad ones.
    It is a different world out there today and the cattle business is becoming more complex. As Darrell Wilkes, U.S. Beef Supply Systems Manager for ABS Global, a Wyoming raised son, said in a recent talk: “Continual raising of the bar is called progress in a capitalistic system.” I agree, and we now have numerous tools that we will have to use to market our calves. Branded livestock programs along with branded health programs and keeping good records in whatever form, will keep the top dollar coming your way. It’s also a means of focusing one’s efforts with a goal in mind.
    Cars or cows, we need to stay aggressive to stay in business.
Dennis