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HESITANT management might make The Midwest Cattleman · February 23, 2023 · P17
continued from page 15 sense.” ‘even Scott Brown can make
For example, livestock risk money in the cattle business’
think demand for many of protection (LRP) insurance aren't going to generate the
our ag products is becoming contracts might be a valu- same level of profitability in
more inelastic—so very small able tool to help minimize 2023 and 2024,” Brown ex-
changes in supplies get us downside risk in the mar- plains—there is simply more
from record highs to record kets, Brown suggests. risk and more dollars out
lows and in short periods of Considering interest rates, there on the input side of the
time. I'm afraid that volatili- hay prices and other inputs, equation.
ty is not going away anytime producers face higher prices
soon.” across the board—impacting
While Brown believes the their bottom line.
demand is there, he wor- “The prices in 2014 that
ries there’s the potential for were record levels that gener-
downside risks—price of hay, ated years that I always said,
future corn yield and pric-
es—could greatly impact the
producers’ bottom line in the
coming months.
How Much Risk Can You
Afford?
“It's not one size fits all,”
Brown says. “We have opera-
tions out there who are bor-
rowing no money. They can
certainly self-finance that
risk side a lot better than
those that are more highly
leveraged. So, for those car-
rying more debt load, making
sure that 2023 and 2024 are
as positive for them as pos-
sible and using a little risk
Callaway
Livestock
Center, Inc.
On I-70, 4 miles east of
Kingdom City, MO on outer road
573-642-7486
Feeder Sale
Monday
12:30 p.m.
1st Thursday Night
of Each Month
6:00 p.m.
Special Cow Sale
Jack Harrison
573-386-2138
John P. Harrison
573-386-5150