Friday, June 21, 2024
HomeNotes From Kathy"Don't Lose Your Mind!" Advice from someone who's seen market ups and...

“Don’t Lose Your Mind!” Advice from someone who’s seen market ups and downs

I called On Pasture author John Marble on Monday morning to ask for suggestions about what On Pasture readers should know right now. I thought he’d tell me something having to do with grazing, or prepping for winter. But no, he told me about the cattle markets and why it’s especially important right now that graziers not lose their minds. Yes, prices are up, and folks might think it’s time to grow their herds. But at these prices, “A yearling heifer bought this year may never be profitable,” he said.

“We always think things will be different this time,” he said. “Maybe it’s irrational exuberance.”

Irrational Exuberance is a term coined by economist Robert Shiller who said, “Irrational exuberance is the psychological basis of a speculative bubble. I define a speculative bubble as a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increases, and bringing in a larger and larger class of investors who, despite doubts about the real value of an investment, are drawn to it partly by envy of others’ successes and partly through a gamblers’ excitement.” (Wikipedia)

John added that cattle market cycles occur on a longer time scale, meaning folks who experienced the last down cycle are no longer in business and younger folks haven’t seen it, so they just don’t realize what can happen. But all you have to do is check out these graphs to see what markets seem to do over the long haul.

Here’s what cattle prices looked like from 1990 to 2015:
From the USDA overview of the U.S. Cattle Industry
Here’s what cattle prices looked like from 2014 to today:

Then check out this week’s articles for more information on market cycles, tips for weathering storms, and links to additional resources and articles.

Thanks for reading!

Kathy

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Kathy Voth
Kathy Vothhttps://onpasture.com
I am the founder, editor and publisher of On Pasture, now retired. My career spanned 40 years of finding creative solutions to problems, and sharing ideas with people that encouraged them to work together and try new things. From figuring out how to teach livestock to eat weeds, to teaching range management to high schoolers, outdoor ed graduation camping trips with fifty 6th graders at a time, building firebreaks with a 130-goat herd, developing the signs and interpretation for the Storm King Fourteen Memorial trail, receiving the Conservation Service Award for my work building the 150-mile mountain bike trail from Grand Junction, Colorado to Moab, Utah...well, the list is long so I'll stop with, I've had a great time and I'm very grateful.

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