Cattle brokers offer guidance during tough market cycle
With the current market, cattlemen are looking for answers and seeking advice from those they trust.
With the irrationality in the cattle market, Bryan Prins, 55, a cattle broker based in Sisseton, says he’s strongly thinking of changing his line of work from livestock buyer to psychiatrist.
He has become an expert at listening to people. Each day, he talks with his customers and learns from them what types and sizes of cattle they’d like to have him buy or sell. He listens. Prins has earned their trust. They know he will work the best deal for them. And he knows cattle as he raises Black Angus on his ranch.
Sometimes the animals he wants to purchase are at local sale barns, other times they are in the country. Since he’s been in the business since 1987, he knows what he’s doing, and his customers trust him to make decisions. They open up their checkbook when he says it’s a good deal.
Living in the Sisseton area, Prins is a licensed and bonded livestock broker. He owns Prins Cattle Co. at Sisseton. Five years ago, his son Jake joined him in the business. The two men travel around the state and area each week representing clients, covering their territory, with a presence in more sale barns.
“Personally, I feel very fortunate that the business has grown as it has,” Prins said. “Our customer base ranges from those that want 10 head to feedlots with a 200,000 capacity. It’s a nice mix of customers from large and small operations, from farmer/feeders to commercial cattle feeders. I’ve been very fortunate to have many of the customers become good friends.”
Prins said he is pleased that he’s buying cattle for DemKota Beef.
In his dealings, Prins buys animals mainly from South Dakota, North Dakota, Montana, Wyoming and Minnesota. They sell the animals of their clients to those states plus Wisconsin, Iowa, Kansas, Nebraska, Texas, New Mexico and some to Mexico.
“The volatility in the cattle market is serious and devastating to my customers,” Prins said. “Through the years, my customers have turned into my friends. Imagine the conversations we have. They trust me with their money and trust me to work out the best deal for them.”
In the last 29 years, he’s seen ups and downs as markets work through cycles.
“I read in the CattleFax newsletter that from January 2015 to September of 2016, there has been a 38 percent decline in cattle prices, the largest 2-year decline in 45 years,” Prins said Sept. 21. “There are few who have seen anything worse than this.”
He said he deals with people who are successful, upbeat people. They are in the cattle business and they will weather the markets. They are intelligent and savvy people.
“It’s demanding right now,” Prins said. “Cattle feeders have been having a tough go. This has left a mark.”
As the weather cools, cows and calves are being moved from summer pastures to lots at home. For many, it’s the time of the year when they sell the calves and collect their yearly paycheck. This year, those calves may bring $400 to $500 less than they did two years ago.
“Because of that, it’s tough to predict what my customers will do,” Prins said. “Many sell their calves or purchase new ones at certain times of the year. In better times, I may push my customers to do things. Now, I don’t feel I can push anyone. We are in a downturn. The clients are the only ones who know what is right for them.”
He questions how he could justify telling someone to hang on to their cattle, telling them things will get better.
“These are very savvy people,” he said. “I place the cattle. The buyers are successful and know what they are doing. We talk. I don’t tell them what to do. They let me know what makes them comfortable.”
Some producers face reduced equity which ties their hands. Overall, clients are cautious, as they have suffered in the last two years.
Buyers are extremely wary. Producers depend on turning the feedstuff they grow into pounds of beef. Prins believes smaller customers are more likely to be speculators, taking a chance to jump in and out of the market.
On the flip side, Prins said, after weathering such a steep decline in price, there is a pretty slim chance that the market will see another 38 percent decrease in prices.
Prins said that cattle people have better odds of making money in this year than the last year,
Jake Prins, 27, studied entrepreneurship and ag business at South Dakota State University which provided a good background for the business. But some of the most important lessons came from this dad.
“I learned from dad to always be honest and tell the truth,” Jake said. “Put everything right out front is what he always told me.”
Jake said the fun part of working with his dad is that he’s open to change. When Jake suggests something new, Bryan agrees, “Yes, let’s try it.”
As Jake is also a young producer, he has concerns about others his age who jumped into the cattle business when everything was plus, plus, plus.
“With current conditions, the young producers have to retrain themselves to use the markets to make smart decisions so they don’t bury themselves early in their career,” he said. “The young guys haven’t created a solid base that exists for the experienced cattle people. They have to learn and think smarter. Some may have a tough time and that may mean they need to a variety of income streams.”
With his experience, Bryan Prins says he’s seen big changes in the cattle market. “In the beginning, we’d fight with customers to negotiate 25 cents to 50 cents. Now it can change two, three or four dollars in the blink of an eye.”
The quality of the animals, without a doubt, has improved tremendously in the eastern half of South Dakota. Herds are bigger. Producers have moved from exotic breeds to 85 percent Angus over the years. With that, the animals are bigger. In 1987, those calves coming off pasture were around 4 weights. Now they are 5s and 6s.
In listening to his customers, Prins knows, “Those in the cattle business view current times as part of the market cycle. Many are trying different ways to control risk management. Cattle feeders are resilient. There will always be someone who will feed the cattle with enough equity to stay in the game. “
Connie Sieh Groop is a freelance ag journalist. She and her husband farm near Frederick, S.D., where they grow corn and soybeans. Follow her on Facebook and read her blog at inkaboutag.com. If you have any suggestions for ag stories, email her at email@example.com.