Tag Archives: markets

Perhaps circling the drain even faster than the likes of black rhinos, whooping cranes and snow leopards, small-town newspapers represent a particularly sad and endangered form of business. Some remain securely on life-support thanks to legal notices required by small-county seats. Yet virtually none of this journalistic remnant truly sports a recognizable DNA.

For several generations before the cancerous growth of the internet, a sure measurement of town quality was the reliable collection and presentation of local news via a daily or weekly rag. Furthermore, fact-checking and extreme timeliness was almost beside the point. Truthfulness was important, but not quite as valued as the regular creation of the community’s narrative and context.

Tapping the archives of my own newsstand, the wonderful example of the long-defunct “Polk Progress” always comes to mind. Written and published by a thoughtful man named Norris Alfred, this unique gazette was one of the last linotypes in central Nebraska to rattle out interesting copy every Friday.

Once nominated for the Pulitzer Prize in 1980, Alfred was a great writer, possessing more heart than nose for news. My favorite pages included columns on bird-watching, random events of hospitality (e.g., “Miss Claussen served cousins from Rising City lemonade and rhubarb pie on Sunday afternoon.”) and last week’s weather.

Yet the one element of newspaper layout that will be forever emblazoned, in my memory, is the definitive masthead. Below the bold letters of the tabloid’s centered name sits a large snail, one particularly sluggish given only the token hint of a slime trail. Apparently moving from left to right, the snail lethargically pulls himself toward the “Progress'” slogan: “SLOWER IS BETTER.”

Needless to say, it’s impossible to ever imagine this phrase in the unabridged vocabulary of Tim Cook, Jeff Bezos or Mark Zuckerberg. Indeed, many entrepreneurs, consumers, professionals, workers, scientists and politicians would find such a bizarre value-assessment as a damning indictment of our entire culture.

Please don’t prattle on about the danger of snap judgments, the reward of protracted deliberations and the irresponsibility of decision-making on the run. Spare us the inconvenience of thinking before we act, of doubting that our first blush could be dead wrong, and of wondering if wait and see could be the wisest strategy.

The 21st century was built for speed. Let us stumble forth with alacrity.

As you can probably tell, I can’t completely remove tongue from cheek when discussing the modern world’s speedy success story. I do think the way Alfred’s “Progress” (no doubt meant with at least a little irony) esteemed a more measured pace of life and contained more wisdom.

In fact, I’ve always questioned speed per se (especially if it comes at the expense of thoughtful deliberation) as a worthwhile tool in the critical process of price-discovery. My anxiety in this regard has significantly intensified in recent weeks, ever since USDA announced its decision to change the way it would release major report data, essentially abandoning the “lockup” procedure that has well served producers and speculators for decades.

For years, USDA has given news organizations embargoed copies of market-moving reports an hour and a half earlier than the reports are released to the public.

While members of the media cannot publish any of the data until the official public report is released, the 90-minute blackout has always allowed plenty of time for fact-checking, correcting math errors and the composition of meaningful context.

As sensible as that may sound, the historical system is no more. Crop reports and new supply and demand tables to be released on Friday will be tossed to the unprepared trading mob like so much red meat to hungry but confused lions.

So why did Ag Secretary Sonny Perdue and his unthinking minions suddenly become obsessed to fix what wasn’t broken? In short, the USDA team was motivated by unproven and rather farfetched allegation that high-speed fiber optic lines — that are slightly faster than the speed at which USDA uploads the information — had created an unlevel playing field.

“There is evidence to suggest that there is significant trading activity worth millions of dollars that occurs in the one or two second period immediately following the official release of reports, which could not be based on the public reading of USDA data,” USDA said in a statement. “The inference is that private agents are paying the news agencies for faster data transmission to get a jump on the market.”

Before going further, let me stipulate that DTN is one of the news agencies previously allowed to examine and frame official data 90 minutes before the official release. Secondly, I think my coverage over the years clearly indicates that I am generally a defender of the government data collection ability and procedure. I’ve never had a predictable desire to beat a dead horse in that regard, a sport that has often been overplayed, in my opinion.

Yet this is one carcass that is beginning to smell. USDA has made a blunder here, a mistake that I fear will cause more problems in terms of market volatility and credibility than it ever hoped to solve.

At least two things bother me as USDA attempts to become a quick-change artist. First, there seems to be a serious lack of evidence to justify abandoning a time-tested procedure. Secretary Perdue loosely talks about “evidence” and “inferences.” But while the implications are rather insulting, the department shows no interest in following regular procedures of investigation and public comment.

Second, I think the change reflects yet another example of being drunk on the importance and effectiveness of speed per se. I think all producers and traders can cite contrary market moments when advanced knowledge of USDA data proved to be illogically expensive.

Call me a yokel from the backwoods who likes to read old newspapers, but don’t marketers have more of a fighting chance if they break both twittering thumbs, take about five deep breaths and embrace the broader context before issuing buy or sell orders?

Four years of sales data, across 7,525 lots of cattle, reveals something interesting when it comes to heifer calves. Producers are leaving a lot of money on the table. That’s based on Western Video Market data from 2014 through 2017.

Average lot size in the four-year review was 134-head, with all animals in the study out of the western states—primarily California, Oregon and Nevada. Most (80%) were ranch raised, sold-from-the-farm calves. Calves ranged from 4-weights up to 9-weights. Sales the study focused on took place throughout the year, with the majority occurring in the summer months.

On average, just 19% (1,421) of the total sale lots (7,525) were implanted. Statistically, across the four years, there was no difference in sale price between implanted and non-implanted cattle even though implanted cattle received a slightly higher payout ($184.12/cwt versus $183.03/cwt). The difference was noteworthy for implanted heifers, however, which sold for $3.04/cwt more through those years, compared to non-implanted heifers.

Zoetis’ Tom Short, associate director of outcomes research with the company, has been studying this data. He told DTN that while there is a perception that non-hormone treated calves always sell for more, the data isn’t backing that up.

“In fact it tells us just the opposite,” he noted. “In the case of implanted heifers I think what we are seeing here is that buyers know a heifer with an implant will have better growth potential. Also he presumes that those heifers are less likely to have been around a bull, so there is less of a possibility of them being pregnant. From a buyer’s perspective this is a positive on more than one count. It is interesting.”

Asked if programs like the USDA’s Non-Hormone Treated Cattle (NHTC) could make up through premiums, for the lack of extra pounds an implant can yield, Short said this does not appear to be the case. Looking at NHTC cattle sold in summer 2017, 1,674 out of 2,018 total lots did not receive an implant. Only about 300 of those un-implanted lots, however, sold under a NHTC program. This means for 1,374 lots, there was neither the possibility of a premium, nor were there additional pounds to sell as a result of use of an implant. Average gain added through the use of a calf implant is reported at 19 pounds.

“Take a 6-weight calf and the NHTC premium was $2.25 per cwt, or about $13.50 per head” Short noted of 2017. “Now look at that calf with a sale price [market average] of $1.45 per cwt, or about $870. If we use the 19-pound advantage research shows us an implant is worth now ($27.55) and add that to the value of the calf, you get $897.55 for that same animal. That is about $28 more. In our current market that more than offsets qualifying for the NHTC.”

Through the entire four-year’s of data, across 7,525 lots, a total of 1,421 lots were implanted; 6,104 were not.

Short added he believes this data would be typical across the country. Asked if environment could reduce gains on implants, he said in drought situations it is possible performance might be compromised, although he added “many in the scientific community would say there is still some benefit. The implant can help you more effectively utilize the resources you have. It can make an operation more sustainable.”

The Oklahoma Cooperative Extension service notes in “Implants and Their Use in Beef Cattle Production” the use of implants is lowest in small cow-calf operations, with only 9% of those producers it surveyed using an implant in steers. Operators with more than 100 head used implants at a rate of about 37%. Implant use goes up dramatically for the stocker and feedlot phases. Heifers intended as replacements, the report notes, should be separated from stocker heifers, so implants can be used on the stockers without concerns over any impact on conception rates.

The report concludes: “Implants are one of the most cost effective technologies available to cattle producers.” It adds a nursing calf implanted at three months of age, and 150 days before weaning, can be expected to have an increase of value $15 to $30 per head.

For details on correct implant procedure, and to read the full report from Oklahoma Extension, go to this link: http://factsheets.okstate.edu/…