First hard freeze hits farm areas

One of the seminal events of winter for farmers and ranchers has hit: the first hard freeze of winter.

In many areas, this means the winter grass has hardened, there is no more growth or maturation on the crops--so have to be gotten out of the ground with all haste, while they're still useable.

Many cattle buyers don't get serious about buying calves for winter feed until the first freeze. They know that ranchers then have to sell, as they're out of feed, and might get a better deal. It's a standard sign post every winter, and it's just happened.

Cash feeder cattle prices have dropped in the last month, due both to seasonal factors and the general economic crash. The good news is that they haven't dropped as much as cattle futures or as much as the Stock Market debacle and credit crunch indicated they might.

It has been a warm fall in most areas, allowing many of the late-maturing crops to finish and be harvested, and for ranchers to hang on to their calves longer than they are able to in many years.

As bad as it would be possible to think it is, for cattlemen and farmers, things look a lot brighter than you might expect.

Mass media finally discovers ethanol fraud

Belatedly, the mainstream press is discovering how the environmentalists who shoved Congress into subsidizing ethanol production as an alternative to imported oil, wrecking the U.S. food system and driving up prices.

No small part of the current U.S. economic crisis is the run-up in food prices, which can almost entirely be traced to ethanol production competing with food production for the U.S. corn crop. While corn prices have backed off now, they hit nearly $7 a bushel last spring, far above the usual $2-$3 price that undergirded the ability of soft drink manufacturers, baked goods producers and livestock producers to provide inexpensive food for U.S. consumers.

The disaster is about to get much worse, as ethanol producers have already started going broke in droves. As oil has dropped to $60 a barrel from its $150 summer high, and gas has plummeted well below $3 a gallon (It's $2.31 in my neighborhood tonight, with E-85 fuel from ethanol at $2.09), ethanol has become increasingly uneconomic.

E-85 gets about about 25% worse miles-per-gallon than gasoline does, so with only a 22-cent a gallon difference, gas is actually cheaper. Gasoline also burns hotter and gives better acceleration, so why would you buy ethanol at this little price difference?

Ethanol is subsidized by taxpayers to the tune of 58 cents a gallon, or it would cost at least $2.65 a gallon--way more than the present price of gas--for an inferior product. This is all coming unraveled, several ethanol companies have filed for bankruptcy already.

Food prices haven't dropped, as the mass media is finally pointing out, as manufacturers just take the cheaper corn price savings and put them in their pockets.

As they say--it's just starting to hit the fan.

Livestock like leftovers

Tonight, rather than go out and blow $10-$20 for dinner at a restaurant, I rummaged through the freezer and frig, and came up with enough chicken, peppers, mushrooms and onions to make a stir-fry, that actually wasn't too bad. It was all made out of stuff that had been there a long time, and was close to be being tossed.

That's how farmers and ranchers have to think about feeding their livestock in these volatile times. Corn stalks, beet tops and other leftovers after the harvest in the fields, work fine for cattle feed, and cost virtually nothing. Cattle like them, and while there is some soil nutrient value in plowing them under, its not enough to avoid fertilizer next year.

Of course, ranchers want to graze their pastures as long as they can before they are covered with snow, but then they have to look for others sources to feed until the pastures turn green again in the spring.

In a tough year like this one is turning out to be, buying hay or grain and hauling it in, can throw an operation so impossibly into the red that cattle prices can never be high enough to pay it out. These are the kinds of losses you never recover, and piled up year after year, can put you out of business.

It's easy to be a brilliant manager when livestock prices are high, the weather's good and grain's cheap. Your mettle is really tested in times like this, when it's all working against you.

Cattlemen can thank their lucky stars

Cattlemen can count their lucky stars that they sold fed cattle to the meat packers on Wednesday last week, before the Stock Market melted down on Thursday and Friday. Of course commodities, such as cattle futures, joined the meltdown at the Chicago Mercantile Exchange and grain futures at the Chicago Board of Trade, and later week trade would have been much lower.

As it was, many received $1 higher prices at $91 in the cash trade, after several weeks of dropping prices from a high of $99 about six weeks ago. The fundamentals of the cattle business are strong--cattle numbers well under control, grain costs dropping and consumer demand for beef still hanging in there. But some things are beyond the control of mere cattle producers, and all they can do is stand back and watch the broader world economy make a shambles out of their corner.

Once the Stock Market hits a bottom, and nobody knows when that will be, and prices begin to stabilize, profitability should return to cattle. All the economic indicators are strong. Even foreign beef sales have been climbing, although growth will slow as the U.S. dollar has gotten stronger against other currencies.

We can all mourn the overall U.S. and world economic collapse. But the cattle industry has great potential for coming back strong.

Blogger messes up posts--like the Stock Market

The idiots that run Blogger have eliminated the "publish post" button from the bottom of the posting form--so I've been unable to post anything for several days. If this one sneaks through, it'll be a miracle. I can't imagine running a service that stresses ease of participation and then, all of a sudden, making it infinitely more complicated. Oh well, the technical "mind . . ."

The topsy, turvy Stock Market continues to roil farm prices and agricultural markets. This is a major disaster for farmers and ranchers, many of whom are small businessmen and lack the resources to play with the Big Boys.

Particularly in the cattle business, the fundamentals are sound, with supply and demand in excellent balance. With grain prices way down, along
long with fuel prices, prices should be strong--if only Wall Street could get its act together.

Financial markets are expected to be a mess until at least after the election. We might as well fasten our seat belts, grit our teeth and enjoy it.

Food companies keep prices high

It has always burned farmer's shirts to see what a tiny percentage they get out of a loaf of bread or box of corn flakes at the supermarket. A $3-$4 loaf of bread at retail returns 30-40 cents to the farmer who raised the wheat to make it.

The percentage is even less on corn flakes and other grain-based products. Most of the expense is in marketing costs--designing, making and printing the box it comes in, producing and buying the radio and TV ads to sell it, and paying salesmen to go to the retail outlets and beg shelf space, paying spiffs if you will, from which to sell it to the consumer.

Second in the expense list is the factory and the union-scale workers who manufacture the product. The non-farm ingredients are more expensive that what small amount of wheat, corn, oats, etc. the product may contain.

So it is in these economic times, with commodity prices dropping like a rock, food companies haven't dropped the price of corn flakes, bread or oatmeal a single penny. Corn, for instance, is down from a high of $7.50 a bushel to about $3.67 a bushel. There have been no price cuts in corn flakes.

With tight budget times for the average homemaker, cutting expenses in the food segment has proved difficult, because prices haven't gone down. You can eat lower on the food chain, but prices haven't dropped.

You can only imagine the budget of the farmer who raised the corn, seeing his return drop from $7.50 to $3.67. That's where times are suddenly real tough.

Cattle prices--tail swinging the dog

Today's U.S. Department of Agriculture (USDA) cattle-on-feed report reaffirms what the numbers have shown all along: that the fundamentals of the cattle business are very strong, with the cattle population down, cattle-on-feed down, exports growing and beef demand steady.

The perfect formula for a strong, profitable period in the livestock industry. Right?

Wrong. Outside forces, with little to do with the cattle business, are in control, and about all cattlemen can do is sit back and watch what they're doing to us. The sub-prime mortgage crisis has morphed into an international financial disaster, dragging the Dow Jones and the Stock Market down with it.

Financial markets are roiled by uncertainty and loss, and want everybody to feel their pain. This has spilled over into the commodities business, where the speculators on Chicago Mercantile Exchange and the Chicago Board of Trade have used the Stock Market crisis to drive futures up and down, to generate all kinds of trading commissions.

The cash market for commodities like cattle and beef, sound on fundamentals, follow the futures--skewing prices and markets in all kinds gyrations that defy basic supply and demand economic principles.

About cattlemen can do is try to hold as many head off the market as they can, until things stabilize and go back to being guided by the supply and demand realities instead of spill-over emotion and outside forces. Those who are forced to deal in the present market are getting a haircut.

WTO blasts Europe on U.S. beef imports

For over 20 years, the European Economic Community (EC) has kept U.S. beef out of its member countries falsely, alleging that it contains growth-promoting hormones that are unhealthy for humans.

The U.S. has continuously fought the ban through the slow, laborious procedures of the World Trade Organization (WTO) and the World Court, winning at every turn, but just as continuously appealed by the EC, successfully keeping U.S. beef out.

This is a trade barrier to protect European farmers, who use stilbesterol--outlawed in the U.S.--to promote growth in their cattle. It is far more dangerous than the naturally-occuring vegetable substances used in the U.S. Beef in Europe is a by-product of the dairy industry. As most travelers to the continent will tell you, European beef is terrible. Tourist hotels are importing U.S. beef, due to popular demand from their customers, finding ways around the U.S. beef ban.

Now comes word that the WTO Appellate Body, acting on one of the EC's appeals, said the ban of U.S. beef has to be on the basis of science, not artificial trade barriers--all that the U.S. has asked for all along. A lifting of the ban is probably years away, even now, as the EC can thumb its nose at the WTO and World Court, as their judgements are largely unenforceable.

In addition to the hotel/restaurant trade, the U.S. heavily exported organ meats, such as hearts, livers, kidneys and tongues, to Europe, where such products are considered delicacies. In the U.S. they are largely considered offal, and wind up in cheap hamburger. They sold in quantity at much greater prices in Europe than is ever possible in the U.S. domestic market.

The WTO Appellate Body action is a ray of sunshine, encouraging--even if it doesn't represent any immediate change in the status quo. The U.S. beef industry has to "just keep on keepin' on" as the young folks say.

Ag policy it ain't, but ag must respond

A lot of things get dumped into the U.S. Department of Agriculture (USDA) besides things that have strictly to do with the propagation of crops and husbandry of animals. Over the decades, social welfare programs, foreign policy points and small town construction projects all fall under USDA purview.

One such program is school lunches. It probably began with farm programs that buy up excess production to keep farm income strong. To get rid of it, USDA started parceling out the surplus to school lunch rooms, military bases and government hospitals. Ultimately, as the social do-gooders decided to reform America's diet in the schools first, USDA wound up dead in the middle of who should pay for school lunches and who should get them free or at reduced rates.

This had led to all kinds of dictatorial policies about what can and cannot be served in the school lunch program. Lost in all the healthful mandates is "willl the kids eat it?" Salad and vegetables get thrown out in school lunchroom trash in droves, but the diet-health radicals pride themselves on having served them.

Now another Johnny-come-lately has proposed outlawing processed meats like bologna, hot dogs and Spam in the school lunch program. They ignore the protein, zinc, iron and B-complex vitamins that come from these meats. They scream "excess salt and nitrates," period. Many are vegetarians who wouldn't eat meat no matter what it contained, so are fine ones to talk.

These meats have been made a great deal more healthy in recent years, and with tight school lunch budgets, are one of the only ways many districts can afford to serve meat. It wouldn't matter if they were serving sirloin steak or poached chicken breasts--if it's meat, stamp it out.

New York City led the way in forcing fast food restaurants to cut out saturated fats in fried foods. Other liberal interventionist groups have followed suit, but been unsuccessful on a federal or state level. They don't care if its public preference, or the replacement tastes so bad sales drop. The socialists want to impose their vision of what's good on all of us.

That's why they're sneaking in the back door through the school lunch program.

Seen any COOL labels at the meat case?

October 1 was to be the deadline for implementation of Country of Origin Labeling (COOL) of meat packages in the grocery store meat cases. There are gaping holes in the law, and locally, no one has seen any labels.

One of those "hot damn, we oughta' do that" ideas that is better in theory than execution, COOL was hijacked by the food safety crowd, so meat can be traced back to its birth in case of a public health outbreak of something like BSE, listeria or E. Coli. Instead of benign labeling of meat packages, to gain an advantage for U.S. beef over its foreign competitors, COOL has turned into a bureaucratic, expensive and onerous burden for meat producers.

The rules are so unclear, cumbersome and full of loopholes, that you may not be seeing any COOL labels anytime soon.

For one thing, meat with multiple countries of origin does not have to be labeled. This applies to a big share of meat produced in this country. Cattle imported from Mexico or Canada into the U.S., or U.S. cattle shipped to one of those countries for processing and then the meat shipped back into the U.S.--are exempt. If one parent of a carcass follows this route, the meat is exempt.

There's also a gaping hole over whose responsibility it is to do it. A carcass, or primals, may be labeled, but when cut into retail size packages at the store--things fall apart.

We're being told its just the shake-down cruise, and we'll be seeing labels shortly.

Don't hold your breath.

Dow charge should rally farm prices

Today's record 936 point run-up in the Dow Jones industrial average, and comparable advances in Standard and Poors and the other indices, should spill over into ag commodity prices and lift some of the gloom from the nation's farmlands.

A rising tide lifts all boats, and now that the markets have finally bought into the U.S. and G-8 actions to bolster the world's credit and banking systems, it should rub off on livestock and grain prices.

Agriculture, for better or worse, is a credit-based, credit-dependent business. Lack of confidence in the banking system hits at its foundations quickly. A recessionary economy leads to reduced consumer spending, so the gloom leads commodity traders to drive down futures prices. This impacts the cash market, so farmers and ranchers take it in the pocketbook.

It remains to be seen whether this is a new trend or a one-day bounce, but is strong enough that it should signal a recovery of some magnitude. This is critical in the busy fall harvest, when livestock and crops are coming in out of the fields and on to the market. It's a once-a-year payday for many in agriculture, and a narrow window at that.

For the first time in two weeks, there is at least some reason for optimism.

Redoubling beef sales efforts in South Korea

The U.S. Meat Export Federation (MEF) has its executives, including head man Phil Seng, in South Korea, to redouble U.S. efforts to sell beef there. It has been a rocky road, with U.S. beef banned for two years due to alleged BSE contamination.

This itself is a farce, because South Korean domestic beef has far more exposure to BSE than any in the U.S. There have been only two BSE cases in the U.S., both in dairy cows imported from Canada

After heavy pressure from the Bush Administration, the South Korean government has very reluctantly opened its borders to U.S. beef again, with very severe restrictions. Despite that, all the beef that's jumped through the hoops has been snapped up and there is strong demand for more.

U.S. vegetarians and animal rights radicals funded professional South Korean demonstrators--quite common in Asian countries--to march and picket against U.S. beef. The pressure on the government nearly banned U.S. beef again, but the Bush Administration stood firm and it is still there.

It is against this backdrop that Seng and MEF are in South Korea, campaigning for U.S. beef. It is an old bromide of sales that it is easier to sell more to your best customers than to develop new ones from scratch. Before the badly-overblown U.S. BSE scare, Korea and Japan were huge U.S. beef export markets.

We can only hope that MEF's efforts restore this luster.

Here's another wild horse column

I've discovered that the greatest way to get hits on my ag blog is to expose the hypocrisy and stupidity of the "horses as pets" crowd. I wrote another blog a few days ago about the bottling up of a horse slaughter bill in a congressional committee until next year, and it brought them out of the wood work.

Anyone who dares question their carefully conceived defense of horses, and points out horses as the beasts of burden they are, gets blasted. Memories have faded of the pre-tractor days, when horses pulled wagons, plows and harvesting machines. To the days when men rode them across country or town out of necessity.

A good horse is a proud worker. Horses get wild and mean if they are not regularly trained and ridden. That's because it is what they were intended to do, and built for.

We don't eat horse meat in the U.S., but it is considered a delicacy in France and other countries.

To not open your eyes to the reality of the situation, denies credulity.

Irrational commodity markets sinking producers

Any reasonable reading of the fundamentals of supply and demand in the cattle business leads to the conclusion that prices should be at profitable levels, because there is a basic shortage of fed cattle coming out of the feedlot, and a shortage of yearling replacements to go back in the feedlot.

However, the plunge of the Stock Market has spilled over into commodities trading on the Chicago Mercantile Exchange and the Chicago Board of Trade, and futures prices have sunk like a rock. This has led the cash cattle market to be down $4-$10 on feeder cattle, and $3-$4 on fed cattle.

These are not unrealized, theoretical losses for cattle producers. They actually breed and own the cattle themselves, individually. They sell them once a year, in the fall, for their annual payday. The timing of this market crash is an unmitigated disaster for many farmers and ranchers.

Owners of retirement plans and 401Ks are urged to hang on, don't sell, and your retirement investment will come back when the market does. If you don't sell out, you've only suffered a theoretical, paper loss.

For ag producers, there is no hanging on. When the crop is ready to sell, be it grain or livestock, it has to go. Like the old saying of the grocery business goes "Sell it or smell it!"

Farmers and ranchers are taking their lumps as we speak, without any real alternative.

Can't blame ranchers for wind farm

One of the ugliest, and least productive, solutions to the "clean" energy problem is wind power. You can plaster the planet with wind farms, and they would not be capable of providing the electricity the world's population demands.

Wind farms are inefficient, with a very low return of energy for the dollars invested and the damage to the environment. They are only "clean" in the sense that they don't emit smoke or leave tailings. They kill birds who fly into the blades, are noisy and despoil whatever scenery is around them.

Nonetheless, for ranchers and farmers who live in isolated rural areas, they can be an economic godsend. As long as some "greenies" somewhere are willing to put up the investment capital and pay land rent to them, the state of agriculture today is such that farmers and ranchers have to take the money and run.

The crash in commodities futures prices on the Chicago Mercantile Exchange and the Chicago Board of Trade, only underscores the risky nature of farming and ranching. In addition to the fickle markets for their products, they still have to deal with the vagaries of weather, drought, weeds and pests--to say nothing of environmentalists. It is a tough way to make a living, and to have a steady source of income from wind power flashed to them looks like the Hope Diamond.

So it is that a group of ranchers in six counties in extreme northeastern Colorado have signed up with a Wind Power outfit for a large generating farm. It is a dank, windy area that is always risky for farming or cattle grazing--who can blame them for cashing in?

We can only hope the environmentalists will look so kindly when a truly efficient and environmentally-friendly solution to the clean energy problem comes forth--when one of these areas wants to host the building of a nuclear power plant. That will be a sight to see!

Horse slaughter bill bottled up

The main priority of Congress this fall is getting re-elected. They had to put in a few extra days to pass the bail-out bill, giving it the barest once-over, at best. They passed a bloated continuing resolution for the budget, good until next March. And then they left Washington for the campaign hustings.

Many bills were bottled up in committee or were the victims of other parliamentary sleight of hand. One such victim was yet another horse slaughter bill. It will resurface when Congress gets serious again next year, but for know, is buried in the legislative abyss.

It's just as well. No rational thought or discussion goes into the subject. The Horses as Pets crowd have scared enough solons witless, so rather than think rationally, they mindlessly do their bidding.

Western ranges are over run by wild horses, which are multiplying at breakneck speed. Official U.S. policy is that the wild horses have to rounded up and broken to become saddle horses. This is accomplished largely at prisons, and then the horses are available to the public.

There is a shortage of adoptees to start with, and those that do, quickly discover that the horses are not formerly wild. They still are. They last in their new homes a very short time, and then wind up at sale barns or horse rescue farms.

Ultimately, the horses formerly went to slaughter, and the carcassees shipped overseas to countries like France, where they eat horse meat. This was too much for the Horses as Pets crowd, so Congress has horse slaughter restricted and on hold for the moment.

The backlog of unwanted, but unresolved horses is piling up, waiting for something to happen.

Consumer spending drop bad sign for ag

The U.S. financial mess is buttoning pocketbooks nationwide. Americans are spending less on everything, including food, energy, travel, non-essential items like furniture and jewelry--you name it, and its down. They are hoarding cash at the moment, quite justifiable in light of recent banking and Wall Street stumbles.

This is an especially bad omen for agriculture, because so much of what people spend money on comes from the farm.

Food is the most obvious. People do have to eat, but they can eat much lower on the feeding chain, and do it at home instead of in restaurants. For higher valued products like beef, this could be very costly. This fear is being reflected in the commodity futures markets on the Chicago Mercantile Exchange and the Chicago Board of Trade. After a big crash most traders are referring to as Black Monday yesterday, only modest progress toward recovery was made today.

This current consumer spending trend is something of a self-fulfilling prophecy. As revenues drop at businesses, they cut employees and people who are out of work are forced to spend less. Backlogged, unsold inventory in stores and warehouses lead to layoffs and cuts in manufacturing activity--and less raw material is purchased from the farm.

The first line of defense to businesses facing this prospect is a bank line of credit, to tide them over until good times return. Banks are cutting back credit lines right and left. Businesses, including farms and ranches, lay off employees or close down altogether, in response.

Restoring the nation's banking system, as the bail-out attempts to do and the Federal Reserve and FDIC are moving to do, is certainly one of the needed steps.

To the extent that this restores consumer confidence--that's when the real recovery begins.

Big boys make the mess, little boys pay the price

Cattle have dropped like a rock during this last week at the local auction markets, off as much as $6-$10 over a two-week period. The downward trend continued today, at the bellweather Oklahoma City market.

Drying up the credit markets with ill-advised mortgage lending, pulling most of their money out of commodities markets like the Chicago Mercantile Exchange products--both have caused the record price drop. These were factors far outside the purview of the local farmer or rancher. He had nothing to do with causing it, and could not prevent it if he wanted to.

In simple supply-and-demand economics, cattle numbers are down and prices should be up.

And yet he is the one paying the price. The big strings of feeder cattle are being held off the market by their wealthy owners, waiting for things to get better. The little guy can't do this, because he doesn't have the feed to keep them, and having gone to the expense of hauling them to the sale barn, can't afford to take them home. The little guy is stuck with whatever price he gets that day.

Fall cattle sales represent a year's wages for many ranchers, and a price drop of this magnitude is an unmitigated disaster. There is no kinder or more socially acceptable way of putting it.

If you have the feed and capital, you can wait out a market crash like the present one. Most individual ranchers are not in that category. When you read of all the banks being bailed out by the government, taking two or three months to straighten out the credit markets--think of the little guy, who had his credit line halved, if he can renew it at all, because of the lost equity in the sale of his cattle.

That's who's paying the price.

COOL underway, enforcement unclear

September 30 brought Country of Origin Labeling (COOL) into play in meat marketing at the supermarket. It is a can of worms, and it's very unclear how it will affect either the industry or consumers.

COOL is one of those "hot damn" ideas that is great in concept, but very difficult in execution. Cattlemen justifiably believe that U.S. beef is a clearly superior product, and just putting their name on the label--as well as putting an inferior foreign name on beef from other countries--will greatly increase sales and decrease competition from imports.

If only it were that simple. For one thing, a lot of beef has more than one country of origin. Calves may have been imported from Mexico or Canada, but raised, fattened and slaughtered in this country. What label do you put on the beef?

For another thing, the feds and do-gooders have muddied the waters, so COOL is no longer just a marketing thing. BSE, E.-coli and other public health scares have bullied USDA into piggybacking on COOL to require all kinds of expensive paperwork to give beef traceability from birth to the dinner plate, to allegedly help root out disease in meat--and, of course (wink, nod), prove country of origin for the label.

What was a simple, clear marketing plan has become an expensive, onerous, bureaucratic tangle.

The law provides a $1,000 fine per occurance for violating COOL. That ought to make for some interesting court cases, as murky and muddled as the law and its enforcement has become.

First high country snow bad omen for crops

The corn and other grain harvest is behind, as the hurricanes, cool spring and early summer weather, and then later-than-usual summer rains, made the crops develop later.

This, in turn, has resulted in a late harvest, as the crops were just plain not ready at the normal time. This is fine, as long as fall is unusually warm and dry, which it largely has been to date.

However, major snow is forecast for tonight in the high Rocky Mountains, about 9,000 feet. It is then supposed to rain at the lower elevations, such as in Denver. This, in and of itself, is not damaging to the late harvest, but portends a more normal fall and oncoming winter. If the crops aren't out shortly, they aren't coming out.

The U.S. Department of Agriculture (USDA) has already cut its forecast for the grain crop harvest. The nation's financial crunch at first had a flight of capital into commodity markets, insulating them from the first stock market crash. When full-fledged panic set in, the money fled everything, including the commodities, so grain futures are down. The expected late harvest and lower USDA forecast played into that, but it was largely the mortgage crisis that ultimately drove commodities in the tank.

As the stock market showed Friday, the bail-out isn't going to spark an immediate turnaround. The same is probably true for commodity prices like corn and soybeans, which tend to go lower when the actual crop hits the grain bin, rail cars and elevators. Bad weather keeping the crop from even being harvested, on top of it all, is a bad omen.

Markets turn on Bush bail-out signature

The head-long congressional and presidential rush to get a bail-out bill passed and signed has borne fruit, but Wall Street failed Friday to go along.

High unemployment data, and the realization that the bureaucracy could take months to actually implement the bail-out bill, trumped Bush and Congress once again--and the Dow Jones on Friday fell like a rock.

The commodities markets, including cattle futures, did recover modestly, unlike the Dow. But it was far from a triumphant turn-around. Sort of a whimper that they had overdone things Thursday.

The real problem was that many people have sold cattle and crops based on Black Thursday pricing. The mild Friday recovery was too little, too late for producers who sell a perishable product that has to go to market when its ready. Market timing might work on the stock market, but not for live animals on the scene at the sale barn or crops ripening by the hour.

This great media-spun panacea has so far failed to catch fire. Wet logs, lack of lighter fluid.

Maybe Monday will bring some recovery. Farmers and ranchers are eagerly waiting.

Cattle overcome by outside economic factors

Another crash in the Stock Market today, despite yesterday's easy Senate passage of the bail-out bill, took cattle cash and futures trade into the tank.

Futures were massively lower, with January live cattle down the limit and other months sharply lower. This followed much lower cash cattle trade in all areas. Which came first, the chicken or the egg?

Fed cattle, both live and dressed, sold $3-$4 lower, although trade volume was low and some cattle could sell at higher prices Friday, traders said.

In truth, factors beyond the control of either futures traders or cattlemen, finally caught up with cattle prices. The credit crunch and lack of liquidity is undoubtedly limiting buyers of cattle, who notoriously operate on borrowed money. When you can't borrow, you can't bid and buy.

The Black Thursday for the cattle business sets up a likely Rally Friday scenario, as most such crashes are overdone, and there are bargains to be bought, as well as cash on the sidelines, waiting for the smoke to clear.

The conventional wisdom is that the 348-point Stock Market crash was a shot across the bow of the U.S. House of Representatives, warning them that they must pass the Senate's bail-out bill. It only takes a swing of 12 votes in the House for that to happen. It is likely because of sweetening up the Senate bill with an extension of tax credits and increasing federal deposit insurance from $100,000 to $250,000 per account, among other things.

The cattle industry could certainly take a little of that.