I have had a Blackberry for about two years and have a love-hate relationship with it.
I love having it to glance at and to answer emails; it saves me a lot of time when I am on the road and allows me to stay caught up with messages. I also have the internet feature that I use to look at the markets and see what is happening on the Chicago Board of Trade with grain and hog futures. It keeps me up-to-date and apprised of the markets.
The hate relationship part of this is that I never seem to be able to escape information because it is coming at me 24 hours a day, 7 days a week. There is so much information that there are times I would like to be on a deserted island to get away from it for a while.
The reason I am bringing this is up is I was looking at the markets this morning (Sept. 15) and the grain markets were called slightly higher and hogs were called 25-50 cents higher. I went to a meeting for three hours and when I checked the markets again, corn was up 25 cents/bu., soybean meal was up $17/ton, and hogs were up almost $2/cwt. for each month on the board. This all occurred before 11:00 a.m. I shook my head in disbelief – and I’m not even a producer.
The point I am trying to make is that we remain in a time of unprecedented volatility and I do not see this changing for a while. I know when you have this level of volatility it makes decisions concerning risk management even more difficult. Many successful operations now have people strictly dedicated to managing margin risk for their operations. The importance of spending time and/or dedicating resources to your business on this is more important than ever.
For now, my Blackberry is by my nightstand. When things get better – and they will – I will shut it down for the night. I can’t wait for that day to occur.
Sow Liquidation – I get at least 4-5 calls a day concerning sow liquidation and who is liquidating. My general response is that we’ve only had three weeks of steady liquidation. Until we have at least 24-30 weeks of sow slaughter that is close to 70,000/week, we have a long ways to go.
Sow liquidation is occurring, but it must continue for the market to improve. From what I have seen, most farms are not dumping sows quickly. It is a more prolonged process. The difficult decision for most producers who have decided to exit the business is how to maximize the value of the inventory they have in place. Two weeks ago, producers were getting virtually nothing for their weaned pigs. Today, they can expect over $20. This environment makes culling decisions difficult – even for people exiting the business.
How do we prevent from this happening again?
I think I have mentioned in previous articles that I am a runner. Sundays are the days I go for a long run, where I reflect on my personal life and on the industry I am involved in. It’s also “no Blackberry” time!
Two points surfaced during my most recent run that I would like to share with you. First, I have been blessed to work with people who have a passion for producing food for the world and I am honored to be able to work with some of the most efficient people in this trade. The second point that I asked myself was: How do we prevent an economic crisis from happening again in this industry? What lessons have we learned? Once this industry improves financially, we do not want to make the same mistakes. I would ask each of you to ask yourself the same questions. And, when you have time, I would appreciate your feedback.