AG Bull
Tommy Grisafi creates content for Ag Bull Media.
The Ag Bull Podcast showcases agriculture's top talents in a long-form video format.
AG Bull
Ashley Lowe Nesvick Trading Group
ashley@nesvick.com
901-766-4575
Ashley Lowe, associate person at Nesvick Trading Group and cattle market expert, joins the Ag Bull podcast to discuss the unprecedented bull market in cattle. From its origins at pandemic lows to current record highs, Ashley breaks down the complex factors sustaining cattle prices while other commodity markets struggle.
• Ashley is hosting a cattle market meeting in Dodge City, Kansas on August 22nd at the Boot Hill Museum
• The current cattle bull market began with pandemic-related liquidation around 68 cents/pound
• Drought conditions in western Kansas and other regions further reduced the cattle herd
• Unlike typical fund participation that pressures prices lower, funds are helping sustain this rally
• The market consistently finds buyers on breaks, showing remarkable resilience
• Cattle production cycles span multiple years from conception to consumption
• Evidence of heifer retention signals rebuilding has begun but won't impact production until 2027
• Potential market threats include screwworm detected just 270 miles from the US border
• Proposed 50% tariffs on Brazilian beef would further support domestic cattle prices
• Cattle prices historically "take the stairs up and the elevator down" with quick corrections
To attend the August 22nd meeting in Dodge City, contact Ashley at ashley@nesvick.com or call 901-766-4575.
There is a risk of loss in trading futures and options, and it is not suitable for all investors. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RETURNS. Nesvick Trading Group LLC is not responsible for any redistribution of this material by third parties or any trading decision taken by persons not intended to view this material
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Thank you, Tommy G
welcome back the ag bowl podcast. Happy friday. This is a ag bowl trading segment. I'm here in nashville, tennessee. I'm at the nesvic office. We have offices in both memphis and nashville. My name is tommgrosafi, you know that. But our next guest is Ashley Lowe. Ashley is an AP. That means associate person at Nesvik Trading Group. Ashley, welcome to the show.
Speaker 2:Hi, thank you so much for having me.
Speaker 1:Now, ashley, what people don't know is you are an absolute expert on cattle and they have been going up. But before we talk about cattle and before we talk about your background, you have some exciting news about a meeting in Dodge City, kansas. Do tell my friend.
Speaker 2:I do On August 22nd in Dodge City, kansas, at the Boot Hill Museum.
Speaker 1:The Boot Hill Museum. Last year I thought you had it at the casino.
Speaker 2:I did this year. We decided to do a little bit of a venue change. I think this is going to be a lot more fitting. The museum is a really great place. It's going to be a really great spot. So 1-30 August 22nd at the museum, I'm going to have a couple of speakers. I'm going to have Craig Solberg with Nesbitt Trading Group, I'm going to have Tony Greer with TG Macro to do the um well, the macros, I imagine, is what he's gonna do yeah, that's right.
Speaker 2:And then mike sands, our um cattle analysts, will um close out.
Speaker 1:After that we're gonna have happy hour at the distillery next door and then dinner at prime on the nine and how do people, if they want to get signed up for this or know about this, what's the best way to get involved in this show?
Speaker 2:They can either call me at 901-766-4575 or email me just ashley at nesvikcom. That's N-E-S-V-I-C-K.
Speaker 1:I like it. Now let's get to the show. All right, You're going to help me with the Ag Bowl podcast occasionally and the new Ag Bowl website, wwwagbowlcom, is coming out. It's out there right now. If you go to agbowlcom you'll see a website, but we got a new and improved one where we're going to be releasing a lot of content. Some is free for the world to find out and some is premium. I definitely know you're going to be helping me on the premium side with this cattle market. It's the hottest thing people want to talk about, versus talking about corn. You and I and the Nesbitt folks were out and you know what do you tell someone about corn? It was down five and then it was up five. I mean cattle, holy cow. Talk about your background, how you became a commodity cattle broker. I mean you're broker and everything, but I really think of you as someone I go to in cattle.
Speaker 2:Sure, I started in Memphis, tennessee, in 2009. I was a research analyst for about 12 years there in Memphis. I grew up in the Southeast in amateur rodeo and everything and it always interested me, and so I, um, I, I found a place, I learned from a lot of really great people and I still you know, obviously I still am a broker and trader with Nesbitt and then I rodeo on the side for fun well, I think all the cowboys out there will uh, you know that we're going to go off subject a little bit.
Speaker 1:But that Western lifestyle, that RFD TV and all those folks they go out to Las Vegas for this 10 day show and I have clients from all over the country who love going to Vegas for the rodeo Right. It's like December 8th, 20th or something. I mean that's a big deal, but not. People grew up Like I grew up outside Chicago. I thought like a rodeo was something that happened once while I did. It's a big deal.
Speaker 2:Well, and right now we're coming up on County fair season too, so every every little County around the South has their own fair and it's it's kind of a busy time of year for people like me that enjoy rodeos, whether you're competing or just go to watch. It's a lot of fun, something to do with the family on a Friday or Saturday night.
Speaker 1:You know, I absolutely, and it also it seems like help me out here. But people who raise cattle, they a lot of times tend to have horses right.
Speaker 2:Oh sure you know horses are really useful on on the ranch, whether you're, whether you're going to check fences or doctor cattle. Typically they can get places. A four-wheeler can't or a side-by-side can't. They may give you a little bit more attitude.
Speaker 1:You're talking about using horses for real. We're not talking about the people who have expensive horse habit. You're talking really using the horses on the ranch right, absolutely, and the horses love to work too. Yeah, sometimes when I drive around in Indiana we go out to a lake and there's a large Amish community. My wife always feels bad that the horses are pulling. I say I think they like it.
Speaker 2:I know that my horses like having a job.
Speaker 1:Yeah, who the heck wants to sit in a barn all day? Well, let's talk about one market that's not sitting in the barn. That's cattle market. I want to go back a little bit. Remember. I said this podcast is going to be short. I lied we're going to go long school. How did this bull market start in cattle? I'm going to ask a question. I think I answered it, but then you're going to correct me. I think this started when we put in the lows during COVID, when we went to whatever it was. It was embarrassing 68 cents a pound, is that correct?
Speaker 2:I think that was part of it. I really do At that point. That was a non-drought induced liquidation. I think a lot of guys just said you know, this is a lot of work for not a lot of money. I'm out.
Speaker 1:Yeah, and that was ugly. There was some big, big, big pain during that period for so many people in so many different ways. Some markets benefited, some didn't. Cattle definitely had the wrong side of that. It's that's all changed. We've also had you talked about non-drought liquidation. I remember in 21 we had a big drought in the northern prairies, I think, and then they was it 22, also in the west. So go, go over the years, we go. 20, the pandemic, yep then. Then where was this drought that moved cattle around the country?
Speaker 2:well, the Drought through pretty much dead centers of the state Kansas, especially western Kansas, took it pretty hard. That's where we raised a lot of wheat pasture cattle. I think during that time, if I remember right, wheat was fairly high-priced so it didn't pay to graze it anyway. Didn't pay to graze it anyway and cattle were very low priced so it didn't really pay to put cattle on wheat because they weren't worth as much as they otherwise would be.
Speaker 1:And then you flip that around from when wheat made highs during the Ukraine invasion, Now wheat's at multi-year lows and cattle are at all-time highs. So we flipped.
Speaker 2:Yeah, that's right. In 2021, when we, um when the russia ukraine war started, wheat shot up like a rocket, and I think that started late february, which is, um, I don't know what, I lost my train of thought, but well, it started in late february and then it just it just keeps going and going this market.
Speaker 1:I I mean it never ends right.
Speaker 2:And then the wheat market topped out in May and has basically traded lower since.
Speaker 1:Yeah, I mean talk about a long tail on that market. Yeah, so corn, wheat and beans as everyone knows who's listening are not at exciting prices. We had a great week this week. We'll take a win for the team, but uh, we're we're still not doing well. I don't know if we're like bad, like the socks, or bad, like the cubs, bad, but uh, grain markets have some issues. The cattle market I spend so much my day, um, I particularly on my screen. I have three cattle tickets up, three, three uh feeder cattle tickets up. I don't even have hogs up, I have it on a different quote board, and then you have your options, markets and everything else, but those cattle are just whipping around daily. What would you say as far as the risk management point has changed in the last few years here with cattle? Obviously LRP would be one of them.
Speaker 2:LRP would be a big thing. I'd also think the fact that the funds are very interested in our market has helped us out for the better for once. Normally, when the funds get in the cattle market, they like to sell it and depress it and keep it way lower for way longer than it should be. This year has obviously been the exact opposite. Not that it doesn't deserve to be as high as it is now, but I don't think that we would have gotten here without the fund participation and the market just continuing to rally. Even on a break, the market will recover and find buying at these lows. We didn't used to see that 10 years ago.
Speaker 1:Yeah, Look how we opened up this week. Monday was ugly Came back. I don't know. Did we come back every day? Tuesday, Wednesday, Thursday we closed a little lower back. I don't know, Did we come back every day? Tuesday, Wednesday, Thursday we closed a little lower Friday. I don't know. We could be unchanged on the week. For all I know we could be up a little.
Speaker 2:Yeah, I mean we did not take out our low from Monday today. I kind of looked like we might for a little bit, but as usual, the market found buyers and I think that that's probably due to next week. The index is probably going to print somewhere over three 25.
Speaker 1:It's unbelievable.
Speaker 2:Cash will not break, and a lot of times too. What we've seen more so this year than normal is the board will break six or $7 and the cash will not like a room or vice, uh rating, a packing plan or something.
Speaker 1:Anything. You screw worm. Let's go over all the drama we've had right sure.
Speaker 2:I mean, we've had threats of plant closures, we've had, you know, up the screw worm is. It's not a matter of if, but when it gets here, and you know that is that is a big risk to our market right now. I do think that when the screw room is announced, we will be lower for a day or two or three, but eventually, once again, if the cash does not break, I think the market will still be in pretty good shape.
Speaker 1:Let's talk about what. Maybe, if someone's a fan of my podcast or whatever it. The cattle herd versus hogs, like if, if, if there's a disease in the hogs, whatever we can rebuild so much quicker. The cycle from start to finish, from the time a calf is conceived till the time you're eating a burger, is multiple, multiple years, correct absolutely so.
Speaker 2:let's say we are seeing some heifer retention right now. I do think that there's definitely some heifer retention going on in pockets of the country right now. I do also think that there are some guys that are just going to ring the register and sell their heifers, take them to the sale bar and maybe they'll end up at another home as a replacement. You know, you never know. But so far, year to date, I think, our auction receipts are down about 200,000 head on the heifers compared to a year ago. So to me that may not be the best way to track it, but that's the data that we have and it's starting to show some heifer retention. So you retain those heifers this year, you maybe breed them in the fall and nine months later you have a calf and then 14 months later or, as we're feeding them right now, it'll be 15 or 16 months later they end up on your plate.
Speaker 1:Well, that's making me hungry. We'll probably go out for steak tonight. Huh, we're in Nashville. We're with Ashley Lowe. She is an AP of Nesvik Trading Group. She's having a meeting in Dodge City. We're going to talk a few more minutes about what you need to look out for. We're halfway through the year. We're actually a little further. We're in July. It's an exciting market. I know she gets up early, goes to bed late, she always answers her phone, she has a, without saying, she has a healthy book of cattle business and your customers love you and that's so important that you love what you do. Your customers love you and you're continuing the education process here. What are some things we have to look out for the next few months?
Speaker 2:I think the next few months we will most likely have a APHAS announcement of screwworm being somewhere in the United States. I think that we definitely, I obviously keep my ear to the ground for that. You know that you just you don't know when they're going to release that sort of information. I'm obviously tracking it coming up north through Mexico. The latest one we found was just 270 miles south of the border north through Mexico. The latest one we found was just 270 miles south of the border.
Speaker 1:That is dangerously close. We are imminent. Wow, that's scary. Let's talk tariffs. We didn't talk about that.
Speaker 2:Oh sure, the 50% tariff on Brazil. We import a lot of grind materials from Brazil. That's a big thing. Right now, cows are bringing you know 160, 180. That price will increase if we have to pay a 50% tariff on Brazilian beef.
Speaker 1:Yeah, let's just hope that was a starting point, not a finishing point. What about what's going on with cattle coming in from Canada? So we're America, we got north, south. It's like everything you could ever add to a bullish market. You know what would be really bad is if they wouldn't let us import cattle from Mexico. Yeah, that'd be bad. You know what would be really bad is if they put a tariff on Brazil. Yeah, that'd be well bad. When I say bad, it's bullish, but it sounds weird. I think people are tired of this bull market. I think people would like to see cattle trade both ways.
Speaker 2:I think. So You've got to think there's probably a break in here somewhere. It's just can it sustain it? Can it be on a sustained break? Cattle is notorious for taking the elevator up, or taking the stairs up and the elevator down. It'll take you weeks and weeks, or months and months, to put $20, $30 on the market and we'll take it away in four or five days. On some bad news.
Speaker 1:Rumors. We have rumors. I was listening to a radio show the other day and they said this bull market's so old it just stepped up to the bar and ordered a drink. What do you think of that?
Speaker 2:I think that's probably right, but I think that right now we've just started effort retention, which should make the bull market continue plus some. 2027 is probably the next time that we're going to see beef production increase due to herd size, not weight, and feeding the cattle longer.
Speaker 1:We're talking cattle, we're talking mathematics, we're talking making baby cattle and we're going to talk a lot more about that. Let's finish the show. Number one thank you for coming on. You're in Nashville today. We're recording live in the Nesvik studios. You're an AP of Nesvik Trading, so am I. This is the Agable Trading Podcast. We're with Ashley Lowe. Tell everyone one more time how they can get ahold of you where your show is that beautiful lineup. We want to fill that room out there.
Speaker 2:Sure they can email me at ashley at nesviccom. They can call me 901-766-4575. You can also text that number. August 22nd, Dodge City, Kansas, at the Boot Heel Museum, From 1.30 to 5, we're going to havea meeting. I have Craig Solberg, who is our meteorologist and resident grain expert, Then we will have TG Macro, Tony Greer with the macro part and then Mike Sandsands who is nesvik trading group and also um mbs research.
Speaker 1:Then after the meeting we will have happy hour at the boot hill distillery and dinner at prime on the nine sounds good, I'll be out there and, uh, we're going to be going live, we're going to be recording some stuff, we're going to go live, I'll probably tape it and then, uh, but we want people. People are getting used to coming back out to meetings. They're ready for meetings, unlike if this was a grain meeting. You and I spoke the other night. I said you will have a packed room. This is a meeting about cattle, macro markets, weather. This should be an exciting group out there. You also help people hedge, uh, corn and wheat.
Speaker 2:I imagine more wheat than corn, huh more wheat than corn here lately, for sure for sure.
Speaker 1:Yeah, let's hope we get these grain markets going back up, but we're going to have a harvest here 30, 60, 60, 90 days away from a big harvest, and it looks like we're a lot closer to a big harvest than a bad harvest. I always say I'm in the bushel business. Let's not swear off big bushels, but we still need to find a home for them. With that we're going to wrap up the show. Folks, you know how to get a hold of me. I'm going to list all this great stuff at the bottom of the podcast Visiting here with Ashley co-worker, big meeting, Dodge City, kansas, tom Grisoff of the Egg Bowl podcast, ashley Lowe AP and Nesvik Trading. We'll see you all next time.
Speaker 2:Bye, thank you.
