This next issue marks our 90th year of publishing the Western Livestock Journal (WLJ), publishing years being determined by volumes of 52 weekly issues. Nelson Crow, my grandfather, published the first issue on Dec. 7, 1922, the first year the Los Angeles Stockyards opened for business. In those days, it was called the Farm and Ranch Market Journal. During their first month in business, 13,000 head of cattle passed through the LA stockyards and clearly changed the value of livestock in the West. At the time, 1,100-pound steers were trading for $8/cwt. and were shipped in from as far away as Montana and Texas.
A lot has changed over the 90 years WLJ has been reporting markets and the news for the livestock business. WLJ has remained a family owned and operated business over all those years. Dick Crow took it over in the 1960s, then I took it over in the 1990s. WLJ has always gone to press on Thursday, and we’ve never missed a week.
Looking through the very first issue, I noticed an interesting comment on the first page. Jon Knorpp, president of Southwest State Bank, said, “Meat has long been one of our most substantial food products, yet until recent years, little concerted effort has been put forth to put the beef cattle industry on such a basis that meat may be produced at a minimum cost.
The farmer and cattlemen receive the least consideration and pay more for what they require than any other one class of people.” Sometimes you have to wonder if that mindset has changed over the years.
At the time, Knorpp thought stockmen were paying too much interest for operating loans and he worked to reduce interest rates on cattle loans. In those days, stockmen were paying up to 15 percent to borrow capital. In the early 1920s, he insisted that Texas cattlemen feed cotton seed to their cattle to reduce production costs. He also told cattlemen in 1922 that he would not make loans against any Mexican cattle, insisting that his customers buy high-grade native cattle.
In 1922, the livestock industry was a growth industry. According to the first issue of WLJ, heifers weighing 792 pounds were selling for $5.25/cwt. Today those heifers would bring $1.20/cwt. Also, in 1922, there were 11 major packers in Los Angeles, buying cattle through the Los Angeles central market.
Marketing livestock has changed in a big way since those days with the local auction markets popping up, then the futures markets, and then the addition of the video and internet markets. The only thing that hasn’t really changed is the people who make the marketing system work, regardless of marketing venue.
Speaking of markets, this last week showed us a much stronger market for cattle, especially on the futures markets. Last Wednesday morning, all the spring and summer feeder cattle contracts were trading over $145, providing a glimpse into what the cash yearling market could be this next year. I have never seen the feeder cattle futures trade at this level. It just makes me think that for those folks who already bought calves or plan on holding on to their calves for next summer, there is a big opportunity ahead of you. It would be a good idea to watch those futures markets and perhaps buy a little insurance and cover some of your risk going forward. This market is awfully good, but we all know a lot can happen between now and when you deliver yearlings next April through August.
This last Cattle on Feed report was a big surprise with cattle placements 1 percent below August last year. All the market analysts missed their estimates on this report. The report was considered bullish. The following Monday morning after the report came out, all live cattle futures contracts, except for October, were up the trading limit of $3 for the day.
This Cattle on Feed report quelled some fears that the industry could start to build overbearing fed cattle supplies. Most of the August placements came in under 600 pounds and generally went to southern Plains feedlots and grow lots. With this much time, feeders will be able to spread these marketings out so they don’t overwhelm the supply side.
It’s somewhat remarkable that throughout all this negative economic talk, the beef cutout values have continued to trade in the $183 range. I’m told that the middle meats have been trading well, showing that folks are still out there wanting a good steak. The middle meats have been dragging the cutout value down the past few years.
Things are pretty good in the cattle business for most and it has been fun to report on the markets and watch the markets through the pages of Western Livestock Journal’s 90 years worth of bound volumes, which are in a safe place in the Colorado State University library for all to use and research. We’re all looking forward to continuing the publication as long as we can. It’s a family thing. — PETE CROW