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south central WI | Do you know what you need for a price to start making money? This month was pretty rough. The futures are starting to come around. Cheese and whey are climbing hard and milk is following. This month was $14, it looks like you can get over $16 in the near future. I booked a small portion of my 4th qtr milk for above $16 recently, and covered the upside with a $17.50 call. If it climbs fast I can maybe make more. With a climbing market and some strong indicators I would maybe leave the milk unprotected. My worry is with the tariff talk. I dont want to make this political. A few months ago it was climbing hard and we had over $17 milk in the futures. Then the tariff talk started and we lost close to $3 in a month or less. I dont want to book too far out as I think it will keep climbing or improving some.
It's a hard decision to make. Corn isnt worth much right now, just like milk. Cows aren't worth anything. Maybe it's time to get out while you still have equity. Maybe you should stay in and hope the markets improve and your cattle are worth something. It will take an extended period of decent prices before cattle are worth more. I think a lot of producers are in a tough spot financially and will be a while before they can afford to buy more cattle.
If beef prices were better it would be easy to make the call. We have an excess of heifers here. Cattle jockeys are saying they are worth well under a buck. (I think I was quoted $535 for 700 lb heifers). We decided to pick out some lower quality heifers and beef them out. There is just too many cows for the market right now. | |
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To chop or not the chop
