Dear Mastermind Member,

The past few newsletters have stimulated a few questions about being able to value grass.

As I had said earlier it isn't easy to place a given value on grass as it is constantly moving along the scale of value to valuable and back.

This is then purely perception. So the value grass has to you is different to the next person.

What we do know however is that grass has a big impact on livestock prices so are we actually trading the livestock market or the grass market?

There are obviously other factors that influence livestock prices but none so regularly as grass.

In this newsletter and next week I have examples of how two clients have valued their grass.

Firstly Andrew Lawrie.

While grass in many areas was starting to become a scarce commodity, Andrew saw an opportunity to sell heavier steers and buy back in lighter but better quality steers.
He achieved two things.
Firstly and very importantly a profit on the trade even though he was improving quality.
Secondly he was buying back some grass by having lighter animals.

So was he buying back that grass while it was overpriced?

Andrew's rationale was to conserve grass by having lighter stock but the balance of the grass that they would now eat was "overpriced" but being sold to these "underpriced" livestock.
Now when it rains Andrew has the option if the market so dictates of selling the steers and buying back grass or replacing the steers again at a profit.
If it doesn't rain Andrew has bought time by having the lighter stock and keeping his grass inventory in better shape.

Cheers Rod