Justin Angell

Let’s talk about something positive like investment opportunities — along the lines of government actions that affect our lives. The money printing and the trillion-dollar deficits continue unabated. I have discussed the history of declining empires and expressed concern for years about the debasement of this country’s currency. Once again maybe I wasn’t wrong, maybe I was just early (I know that too early is still wrong).

How does this affect us? Has anyone noticed how high land is now? Wealthy people (urban and rural residents) trying to store their money in appreciating assets instead of depreciating cash is why farm-land is so high. So, what should us hillbillies do? I think pressing forward if land is priced out of the question, then physical gold, or silver is historically a good option, but something I’ve been following with success lately has been bitcoin. Bitcoin is property. Even though I have been following crypto currencies for years, beginning about a year ago as I was sitting in a chair for five months, I slowly became a bitcoin believer even though I didn’t mention it in this column. I know readers can only handle so much left field bull in a month.

The reason I draw this to your attention now is because with the ETFs (exchange traded funds) now being offered by the nation’s biggest banks and investment firms, I feel like there has been a quasi-endorsement by the financial powers and the federal government of this country. I believe at $70,000 per bitcoin there is less risk now than there would’ve been when bitcoin was $10,000 to $15,000 or less. Thanks to apps on our phones like Robin Hood and 5bitcoin contracts on the futures market, investing in this new digital asset is available to all of us.

My research has led me to…. [255 words redacted by publisher] …. and you should do your own due diligence…

The truth is, if any of this is still left in it has not been ripped out by my editor. It will be a miracle. Just letting you know what I’m doing and thinking.

[Publisher’s note: This investment rabbit trail has been redacted as to the suitability and potential liabilities or publishing to a general audience in an opinion column that should focused elsewhere. The redacted parts will have to be obtained by calling or writing the columnist directly]

Just a quick personal update. I’m still feeling great, nice to be back in the game. My new job at Palmyra is going wonderfully. Two weeks ago, I and a few friends and customers sold over 300 cattle at the F&T special. One client had a load of eight weight black steers brought over $2.50 and my load of 520 pound black steers brought $3.42. My net check was way over $1700 per head. They were pretty high, but they were pretty good and hard. I’m confident the new owner will get along just great with them.

After a month of being involved and on the inside with Al and Katie‘s team, I can now say with full confidence that if you were interested in selling cattle in Palmyra, but have been nervous about the market there… stop worrying.

I like to address some reoccurring questions. The last two weeks I’ve had several people basically asked me the same question. How do you know if cattle are too high? How do you know what to give when you’re buying cattle? I don’t know if I should be buying cattle or not because I think they’re too high but I’m not sure? Why are steer calves bringing so much more than heifers?

Stephen Covey said in all endeavors “you should begin with the end in mind.”

So how ‘bout some hillbilly math! When I buy cattle, my intention is to buy cattle that I can sell as Fat Cattle. So, part of that is estimating just how big I think the cattle can get. With cheap feed in a high market, generally speaking, we make the fed cattle bigger to the point where we make them as big as they can stand to be.

This helps to explain my love for Charolais cattle. Unlike straight bred English breeds that generally seem to have a top weight limit, as long as you feed Charolais cattle they just keep growing. This is especially true when a pen of cattle might be fat enough to sell, but if feeder cattle are high then there is another incentive to just keep the cattle you have, and make them 100 or more pounds bigger. Also of course, this happens most often in a rising market where there is more likely to be a premium on the price rather than a discount.

So, Tuesday I bought one steer. He was spotted like a Holstein or an old-fashioned Simmental crossbred, but square made and really a good animal that would produce a big good carcass. This steer weighed 535 pounds and I think that he has the frame and the genetics to gain 1000 pounds. I’ve been told by the feedlot I work with that the cost of gain should be somewhere around 85 cents per pound. Unlike years past, interest is a big factor so I will add $100 interest and $50 for trucking and miscellaneous. I divide that total by the purchase weight plus the expected gain which in this example is 1000 pounds. Here’s how the math looks when I set it up in problem form.

535 (purchased weight) +1000 lb (weight to be gained) = 1535
1000lb @ $.85 = $850
Interest & trucking = $150
First cost 2.62 x 535 = $1402
Total $2402 divided by 1535lbs
Makes the breakeven $156.84 as a fed steer.
October futures price has fats @ $179.82
Difference of $.23 x 1535 = $353 expected profit.

So, if we are in this example estimating a heifer, for simplicity everything can be the same except the gain will be closer to 700 pounds rather than 1000lbs and feeding period is shorter.

535 + 700lb gained = 1235
700lb @ $.85 = $595
Interest & trucking = $150
First cost $2.62 x 535 = $1402
Total $2247/1235lb
Breakeven is $181.94
August futures is @ $176.67
Difference of negative $5cwt indicates $70 loss

So, according to this simple example, a steer calf is worth $423 more than the heifer. Figuring back to 535lb or $.79 cwt more.
So the bottom line to the question of how much should I pay for cattle? Depends on you and your operation. What is your cost of gain? How is your health program? They are all too high if you cannot keep them alive. I should also mention that I recommend some type of risk management program, especially for Cattle Feeders.

Final thought is potentially the most important. There seems to be something ominous percolating in the gene pool of our country. Something significant that affects producers, and cattle feeders that needs to be corrected. The problem is I believe the information that producers need to manage around this issue is being censored. Tune in next month I’ll see if I can pull that thread and unravel that con-spiracy sweater.

Tonight, I am remembering a very long-time old friend, Dominic Lolli, who passed away recently after a long illness. My heart and prayers go out to his family.

As most of you probably know, the Lolli family has run the auction in Macon since 1948. I remember growing up learning the sale barns of Missouri oral history, which included the three oldest running Salebarn families – the Angells in Columbia, the Brownings in Palmyra and the Lollies in Macon, all of which started their businesses approximately 1947 or 1948. Dominic and I are the same age, so our high school careers included a very keen head-to-head competition. When we both began professional life in the Livestock Auction business, I really got to know the Lolli brothers during my time working in MFA in the late 90s, but our friendship predates that.

Salebarn people have been accused of overly optimistic exaggeration when buyers asked how many cattle they would be selling. Any self-respecting auction guy knows to always over-guess than to under-guess. Dominic might have let that sale-barn exaggeration bias leak in the other parts of his life.

I remember bumping into Dominic at the tavern on Paris Road in Columbia soon after college. I got introduced to the four friends he came with, and as he returned from the men’s room, he gathered his buddies around and said, “Fellas, there’s a table plumb full of good looking women right over there.” I heard one of his buddies lean to the guy next to me say, “Coming from Dominic that means there might be two.”

My father went to Macon for many years every Tuesday. He loved going because he had a lot of fun wherever he went and so did the Lollis. At one point after high school, the Lolli family put up kind of a trophy case in the main lobby to the right as you enter the front door. The office was reached by coming in the front door and bearing left. One Tuesday, as people were coming in, many often veered over to the right to look at the new memorabilia. As they walked past the office from the showcase to the ring, most of them were kind of smiling and laughing and giggling. Eventually, the brothers walked out of the office to the showcase to see what was up. Inside the showcase were listed all of the accomplishments, especially of the Macon football program and Frankie and Dominic’s well deserved individual honors as well. But on the outside of the case, my dad had taped a scrap piece of paper to the glass that simply said, “Yep, but they never could beat Centralia.”

Hopefully tonight, my old buddy Dominic and my Pops are sharing stories about football, cattle, and wondering if the cattle market will ever get high enough to reach them in heaven. We miss you both.

I think that’s all for this month. Hopefully I will see you at the auction on Tuesday in Palmyra.