Livestock: Stocks and houses are kind of scary but livestock is doing fine.

A excellent friend of mine from the great state of Alabama asked me a query this past fall which even now bears asking nowadays. We were sitting around one afternoon waiting around on a sale to begin-fixing all the world's problems that's when most of the world's issues are solved right?

He proceeded to ask me the query, given the chance, where would you rather make investments in today's livestock market in cattle or in gold? If you examine the charts for the past calendar year, they both look very exciting . They have both climbed higher. As of Tuesday, March 29th, April Gold closed at $1417.90, where April Live cattle closed at $119.65, which values a 1,250 lb. steer at $ 1,495.63. So what would you select? Well, I don't know about you but I'm pretty bullish on the cattle markets these days! There are just so many reasons to be energized and very few causes not to be. First of all, cattle numbers are said to be lowered to levels seen back in the 50's some even say the 30's. Andif one could get out much these days, it doesn't take much to convince you of this fact. The local runs at the auction markets are very low. rates for slaughter cows and bulls have never been higher than in recent months, which has led to a sell off of cattle that are not pulling their own weight in the farm. If a cow slips up these days and comes up open, she gets shipped within a blink of an eye. Secondly, in addition to charges on slaughter cows and bulls, feeder cattle and live cattle are buying and selling at very high levels. Who would have thought we would see the day when a fat steer could price out at 1500 dollars? It's nothing short of amazing! Furthermore, April Feeder cattle closed on March 29th at $136.43. We are now seeing weaned calves sell at over $800 per head! Replacement bulls and females are at high levels as well. Many of our spring bull sales are seeing averages ranging in the high three thousand to the low four thousand range with top commercial replacement pairs breaking the 2000 dollar mark. Some could say that a cow is worth 2 times the value of a calf. If that is correct, then a youthful replacement pair will soon average $2000! No matter what segment of the industry you are in cow, calf, stocker, feeder or seedstock producer there are plenty of reasons for you to be encouraged. So, what are the causes to not be excited? Better yet, what lies ahead that might derail our current blissful conditions? First of all, a prolonged drought would be painful. A partial reason for our low cattle numbers is due to the dryness of 2009. And while we are currently experiencing dry weather, we are not yet into those conditions again. If you are a current subscriber, then you are familiar with meteorologist Brian Bledsoe, who supplies us with a monthly column and has done a very good job in the field of long range forecasting. Last Wednesday, he dropped me an email just to give me an update on his forecast. The subject line on the email reads "La Nina Rapidly Weakening". According to Brian, it is doing so at a record pace. Why? I encourage you to not miss Brian's next column in the April 15th issue. He can explain the reasons much better than I. But Brian is encouraged that we may see the end to current dry conditions in late spring or early summer. Another reason for pessimism is the current political environment. There are times when politics spill over into our markets causing temporary or prolonged problems. Is this one of those times? I really couldn't say. But, with the current unrest in the Middle East and a very anemic economy it bears watching closely. A third reason to be wary about our future would be high input costs. Let's face it. It costs more to feed them today. It also costs more to fertilize, vaccinate and ship them not to mention the rising costs of vehicles, trailers, balers and more. I see these problems, yet I remain encouraged about our future because I feel we are seeing new plateaus set for our prices. The days of cheap food may very well be behind us. Consumers are paying more for beef, yet the demand increases. If you are a seedstock producer, the demand for bulls and quality replacement females has never been higher and they are both in very short supply! If you a cow operator, you should be encouraged because our numbers are so low, it should take years to rebuild to former levels. For me, I'll take the livestock business enterprise I can't eat gold! SLS