Let's do some quick 'n' dirty FUN WITH MATH!!

This is from last week's USDA Nebraska Feeder Cattle Auction Summary Weekly Cmposite.

Top quality 871# heifers went for an average of $841.04 per head.

Top-quality 935# heifers went for an average of $841.97 per head.

Top-quality 1010# heifers went for an average of $840.32 per head.

Notice anything? 

Shhh.  All of you skilled marketers out there who are propping your arms up over your heads and plaintively moaning "Ooo, Oooo, Oooo, I know! Call on me! Ooo Ooo!" just calm yourselves.  We have to let the other kids have a chance too.  Even the kids who have Ph.D.s.  I know they aren't as smart as you are, but they'll never learn if we don't give them a chance.

Anyone?  Anyone?

(crickets chirping . . .)

Okay.  Let's go through it ONE MORE TIME for the Ph.D.s. 

The eight, nine and ten weight animals in the weighted average drafts above went for almost EXACTLY the same price per head.  If a feedyard buys the eight-weight, he will have laid out the same dollars, and he will have to pump an additional $104 per head into that animal just to get it to the point that it weighs 1010#.  I assumed a $0.75 cost of gain.  So, relative to the ten-weight, the eight-weight is a $100+ per head loser.

For the stocker man, the market is CLEARLY telling you that if you have eight-weights in inventory, they should be sold IMMEDIATELY, because there is NO premium for weight gained beyond 900#. 

One last point: these numbers are WEIGHTED AVERAGES.  Not only that, but they are weighted averages for the entire state of Nebraska, not just one barn.  When you take a data set and average it, the averaging process, by definition, smoothes out the data set, lopping off the extreme highs and lows in the set.  If the weighted average dataset shows zero premium in the window from 871# to 1010#, brother, you better take it seriously.

Forecasters are killing the North American Cattle Industry.
"Global warming" is a complete fraud designed to advance the cause of socialism and enslave humanity.
Abortion is the murder of an innocent human being and is never justified under any circumstance whatsoever.
Every human being is a question, to which the ONLY answer is Jesus Christ.

Ann Barnhardt
Barnhardt Capital Management, Inc.
www.Barnhardt.biz
888-799-4577
Ann@Barnhardt.biz

Bud Williams Marketing, Inc.
www.BudWilliamsMarketing.com
877-799-4577
Ann@BudWilliamsMarketing.com