To be certain, there is no correct answer or “one size fits all” response that applies to everyone. A line in the song above is, “If I go, there will be trouble. And if I stay, it could be double.” Nobody wants to sell when prices are depressed. Then again, most of us have lived long enough to have experienced times where, in hindsight, we wish we had cut our losses, taken our lumps and not continued to “throw good money after bad.”
A few new issues to consider this time around include:
- The drastic hit the entire world economy has taken – some end-user businesses, restaurants, for example, may never reopen again.
- Even for the ones lucky enough to reopen, some of their customers are now unemployed (although, at least for the next four months, thanks to our federal government, a few are making more with unemployment than when fully employed) so our national pastime of eating out may be curtailed.
- Meat processing firms are struggling with worker illnesses in their own facilities, jamming up the supply chain.
It makes one wonder, “Is everyone riding against the wind?”
The experts are all over the page with opinions as to how long and how bad all of this will get. I have my own opinion and am leaning toward something in the middle – maybe sell some head now to build cash and retain the rest with the expectation that demand and prices will improve in three to five months, as we finally get a handle on this virus pandemic. Once businesses reopen and people go back to work and to enjoying their lives again, markets will stabilize. And, further, even before this pandemic hit, research was suggesting our herds would benefit greatly from some supplement feeding to maintain weight and ensure breed back during the hotter and drier summer months instead of solely relying on forage (that dries and dies with the heat and drought stress). Just something to consider.
As my wise grandmother used to say, “This too shall pass.” So, put pencil to paper and run some numbers and scenarios to see what works best for you, your family and your organization. And, while you’re at it, reach out to your community to see how you can help. Nothing makes you feel better about yourself and your situation than to help somebody else who is worse off. As always, my advice is to grow your herd and keep them healthy, for land’s sake!
Jim Walker is a farmer, rancher and all-around thorn-in-the-side with Land's Feed Warehouse in Grand Saline, Texas, who opines on current events affecting the cattle industry. Email Jim Walker.