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The Importance of Market Reports

Financial Literacy

Anticipation. It’s one of the most important aspects of farming and ranching. Knowing the weather forecast is key to making planting, spraying and harvesting decisions. Although it is out of our control, we can make informed choices by paying attention to signals that indicate what storms might be heading our way. The same goes for commodity markets. Market reports are a tool to help us make informed decisions and put ourselves in the best position to succeed. 

What do market reports do?

Market reports help educate producers on a variety of information regarding supply, demand, price and other performance data. They add transparency to the industry by helping show what commodities are worth. This data can be used to inform price negotiations, marketing decisions and the performance of a producer’s commodity. Ultimately, they help our industry ensure integrity exists when transactions take place so that producers aren’t taken advantage of by other industry players. 

How can I tell if market reports are reliable?

Mistakes happen. All a person can do is try to make the best decisions given the information at hand. But that doesn’t mean there isn’t an obligation to make sure the best information is obtained. At the federal and state level, we have a variety of market reports that are produced with integrity. USDA and VDACS both work hard to report accurate information with adequate descriptions. The most important thing is to, first, consider the source of the report. Secondarily, the report must be placed in context to determine how reliable it is. On the cattle side, a report from a sale without many cattle should not be given as much credibility as a sale with a more robust offering. One thing I like to do is to compare individual sales to our state’s weekly and monthly averages to determine how in line it is with others. Our feeder cattle grading system (and the great job our graders do) allows us to compare prices for similar cattle across the state. It is important to compare apples to apples!

What market reports should I be looking at?

It certainly depends on the commodity that you are raising/growing. Because the cattle industry is what I know best, I’ll focus on a few of my favorite reports here.

What should I keep in mind when looking at these reports?

Most every cattle producer believes they raise the best cattle. That is not to say cattle producers are arrogant or self-obsessed. But we all take a lot of pride in what we do and put a lot of time and effort into breeding quality stock. If you look at market reports and believe your cattle are not bringing what other cattle are throughout the state, you have a variety of options.

  1. Put them through the dirt. By that, I mean sell them competitively. Auctions exist to promote price discovery and can often lead to higher prices (although commissions do exist). 
  2. Participate in a value-added program. For feeder cattle, the Virginia Quality Assured (VQA) program has a tremendous track record of success since its inception in 1997. Other value-add opportunities exist as well. 
  3. Sell at a different time of year. Use market reports to see when we have historically higher prices. 
  4. Look at retained ownership/direct marketing opportunities.
  5. Improve your genetics/get an unbiased third-party opinion. As much as you might think of them, the industry might put a different value on the type of cattle you raise. Use industry resources to improve the quality of livestock you are producing. 

Where can I access these reports?

Thanks to a grant and ongoing support from the Virginia Cattle Industry Board, the Virginia Cattlemen’s Association has launched the VA Cattle App as a one-stop shop to access many of these market reports and other industry information. Make sure you download it from your App Store today!

You can also access multiple reports on the Knowledge Center’s Ag Industry News page, or sign up to receive the KConnection newsletter for market reports, ag news, local events and blog articles.

Customers of Farm Credit of the Virginias have exclusive access to the Member Portal. The Member Portal contains market news for cattle along with cattle nutrition, breeding and genetics, grazing management and marketing and selling live cattle and/or beef resources. Reach out to your loan officer or branch office for login information.

Author:

Brandon Reeves, Executive Director of Virginia Cattlemen’s Association

breeves@vacattlemen.org

540-280-8805

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