Ranchers and row crop farmers face a paradox: high prices tempered by unprecedented production costs and market uncertainty. And it’s creating market paralysis for many.
"It doesn't really matter if it's the livestock market or the grains markets. It's a lot of geopolitical headline risk," says Tyler Schau, partner at AgMarket.Net. "They've been driving markets higher and lower in a whipsaw action over the past several months."
Speaking on this week’s Ag Marketing IQ In Depth, Schau emphasizes the value of flexible risk management tools like put options and Livestock Risk Protection insurance over rigid forward contracts. Putting those protections in place can help farmers and ranchers move their marketing strategies forward despite uncertain economic conditions.
Ultimately, he says: "A producer's got to go back to that hedger's mindset. What is the most important thing that you need to protect using futures options? Or LRP for the livestock folks? And that's downside price risk."
Both downside fear and upside hope can slow a producer’s decision making. On the upside, feeder cattle and fat cattle prices are approaching record territory, while corn is flirting with $5 per bushel and soybeans are rocking $12 per bushel — levels not sustained in over two years. For western North Dakota cow-calf operations, the North Dakota Farm Business Management Association projects profitability around $1,200 per cow, a dramatic improvement from years spent below $100 per head.
Downside this week includes lower prices at the cattle sales barn, raising concern about the beef market. But this dip is likely a softening created by herd reduction in drought-stricken areas. Market reaction to Trump administration rhetoric for beef and row crop markets also is a fluid dynamic.
For row crop farmers, making a decision to sell 2026 crop is slowed by concern over rising input costs. Fertilizer and fuel expenses continue climbing faster than commodity prices.
Whether growing grain or running cattle, Schau’s message is clear: protect those gains now, because market conditions can shift overnight.
For actionable tips on market strategy, watch more from Schau on this week’s Ag Marketing IQ In Depth.