To All of Our Customers, Friends and Neighbors,

Happy New Year. What a great year 2011 has been for the cattle industry. Record high cattle and beef markets, great weather in the West, record beef exports, new foreign trade opportunities…the list seems to go on and on. At Beef Northwest, we’re seeing an agriculture community as healthy as we’ve ever seen before and it’s a good feeling.

As Beef Northwest assesses this healthy financial climate internally, we’re asking where the risks for the industry are as we look ahead. Although there are always a lot of areas to be focused on, we believe complacency may pose the biggest risk for the industry right now. Ranchers are bringing home $750+/- for a 5-weight calf. For many of us, it’s a good margin and very easy to put that in our pockets without looking for more opportunities out of our calf production. We’ve heard the occasional rancher state that $75-$100/head profit was not enough money to make it worth taking a calf to a yearling or a fat animal. Three years ago, we would have jumped inside-out for the opportunity to make an additional $75-$100/head profit on our calf crop. Our point is that good businesses always need to look for and assess margin opportunity. We can’t overlook prices that bring $1,000+/- for a yearling and $1,525+ for finished cattle. If there is one thing we’ve learned in this business it is that we always need to plan for the risk that markets, weather, health and other issues can pose for us in the future. It’s important to fight off complacency during the good times because that is where we usually see the best opportunities.

Now that we’ve said our piece about the risk of being complacent, we have to say that things really look good for 2012. Cow numbers are not increasing yet so supply is in check, demand seems to be steady or trending slightly higher, feed costs seem to have settled and we’re optimistic the fall elections will bring changes that are friendlier to business in general and Agriculture specifically.

We thank all of you for the business, friendship and relationships. Let us know what opportunities we can help you with or be a part of with you in 2012.