A look at 60-plus years in the cattle industry

For more than 60 years, Gordon “Cobbie” Magness has been providing auction services to the Huron area, so if you are seeking a vision into the immediate future of agriculture in general, and cattle in particular, he is a good well to draw from.
Magness Livestock, now into its third generation with Cobbie’s son Brad, and Brad’s children Matthew, Maggie and Brad Jr., as well, sees the changing face of agriculture on a daily basis.
Which is just about how quickly things can change.
“When Dad started this in 1956,” Brad says, “most cattle were finished where they were raised and then sold to the packing plant. More producers backgrounded their cattle, where now, I think there are fewer who do so.”
In addition, Cobbie said that he believes that while the quality of cattle has improved over the years, and the numbers have stayed about the same, the number of producers has shrunk.
“There are fewer operations, but the ones now are much bigger,” he said.
Matthew echoes his grandfather’s thoughts. “Cattle are bigger and better.”
“Cattle feeders have done the work to produce a quality and tasty product,” Brad said. “Because in the end, whether they are fat cattle or old cows, they all have to be eaten.”

To glimpse the future, taking a good hard look at the past is in order. Looking at the website tradingeconomics.com, cattle prices over the past five years peaked in late 2014, with a price of $240 per hund-redweight, or $2.40 per pound. Since then, the pricing chart resembles a distant mountain range, with sharp peaks, followed by deep drops. The low price in that same five year period was just below $119 per hund-redweight, almost exactly two years later.
“Cattle prices had a run-up to 2015,” Matthew said. “Since then, we have seen lots of volatility in the market.”
“And that volatility can be week-to-week or even day-to-day,” Brad said.
“For many producers, their margins are so slim that the extreme volatility makes turning a profit vs. losing money a real challenge,” Matt said.
Brad said that their market’s responsibility remains to expose their customer’s livestock to as many potential buyers as possible on a given day. To that end, they began offering all of their auction services through the worldwide web, and have seen the impact. South Dakota remains ensconced in the Top 10 for cattle production by state.
“We have sold cattle all over the U.S.,” said Brad, “but to local people too. We’ve had an auction and a local buyer made a purchase through the auction site online and shows up later that day to pick up the livestock. It fits what they want to do and their schedule.”
Everything that you would get sitting ringside at Magness Livestock can be seen on a computer screen, from who is selling the livestock, to the number of head, their average weight and the pricing.

Cost of production
“The number one cost of cattle is the cost of feed,” Cobbie pointed out. “When you have cheap grain, it’s cheaper to produce cattle.”
But while lower grain costs are encouraging more producers to dip their toes back into cattle production, almost all of those producers are selling feeder cattle instead of finished cattle destined for the packing house.
“A small guy will bring cattle to the sale barn,” Matthew noted, “because it’s tough to get a foot in the door at some of the packing houses. They are looking to purchase cattle for slaughter from places they are familiar with.”
“In the ’60s and ’70s we would see 70-100 consigners with feeder cattle,” Cobbie said. “Now it’s more like 20, although the number of head is about the same.”
Magness Livestock deals predominantly with cattle, although with the recent drought/excess divide in the state, they began holding a hay sale.
“We were kind of right on the line between where producers had extra hay in the east and guys further west were looking for feed,” Brad said. “The hay auction has been good for everyone.”
In addition, the market will be holding a sheep auction this summer. Producers have been hauling sheep to West River auctions for sale, and eventually posed the question to the Magnesses about perhaps having an auction here.

Farm auctions
An age-old indicator to the health of the ag industry is the number of farm auctions taking place. Cobbie noted that they haven’t had a farm auction “in quite awhile.”
“For awhile, land prices got crazy and folks were selling land left and right,” Matthew said. “That has pretty much leveled off. Pastureland is extremely limited however.”
“Five years ago farmers were looking for more and more tillable land,” Brad said. “They even took out tree strips to find more land to plant. Now, as grain prices have slipped, and they need more pasture for more cattle, there is a trend to planting grass.”
“Or,” Matthew said, “instead of row crops like corn and beans, we’re seeing more forage being planted.”

Looking forward
As it is with any business with an aging population, getting young people involved is a challenge, Mathew said. “Getting younger producers interested in a cattle industry where there are fewer producers and they are bigger is challenging.”
He said that one of the things that Magness Livestock has done is to sponsor  the 4-H Range Management Project award.
“The award is the loan of a bred heifer for five years,” Matthew said. “It gives the young producers a chance to get started and to generate some profits.”
“The hope,” Brad adds, “is that if we start them young and give them a toe-hold, maybe it catches on and they see that with some planning and hard work, they can make a go of it as well.”

Onlookers watch as cattle are herded into the sale barn during an auction recently at Magness Livestock.