Founder’s Note: JC Parets here. Sam Gatlin has learned a lot in a short amount of time and is off to a really good start on what promises to be a fascinating career.
And he always has an interesting take on the stock market. He introduced us to the “Apple of China”… He alerted us to “Flying Tubes and Bad Habits”…
Today, he’s talking about the Homestead Act, family, and futures contracts.
Here’s Sam… – JC
By Sam Gatlin
I’m a kid from Kansas. Born and raised in a small town where farming drives the local economy.
My family first came here in the 1800s, when the Homestead Act opened up the Great Plains to anyone bold enough to stake a claim. All you had to do was build a house, plow the soil, and stick it out for five years. In return, the government handed you 160 acres of land to call your own.
For millions of Americans, that promise changed everything. For my family, it was the beginning of a legacy.
My people came from Europe with little more than grit and determination. They settled in Kansas, broke the hard ground with mule-drawn plows, and planted the first crops.
Over time, that land passed from one generation to the next. Today, my family is still here, working the same soil, raising cattle on the same grass, and drawing oil from the same prairie.
We grow the typical Kansas commodities: wheat, corn, soybeans, sorghum, and alfalfa.
Then there are the cattle. We manage a herd of nearly a thousand head, spread across our pastures.
They’ve always been a part of my life. I can rope a steer, and I’ve even ridden a bucking bronco.
When cattle prices fluctuate, it drastically changes our profit-and-loss statement at the end of the year.
Futures contracts are more than tickers on a screen to me and my family – they’re feed bills, fuel costs, and paychecks.
Despite suffering from depressed grain prices this year, cattle prices have helped us thrive.
It’s also one of the most powerful uptrends anywhere in the world right now.
Feeder Cattle Are Fighting for the Crown
So far in 2025, feeder cattle have gained more than 36%, matching the returns of gold.
Meanwhile, the S&P 500 has managed an 11% increase, while bonds have remained largely unchanged.
The numbers don’t lie, check the scoreboard:
Feeder cattle are leading the pack, returning more than 3x the S&P 500.
It’s an incredible time to be a rancher.
Maybe I should’ve been a cowboy instead of hanging out here with this crazy Cuban guy, JC.
Commercial Hedgers Flip the Script
The Commitment of Traders data tells the story even better.
For years, commercial hedgers – the producers, packers, and professionals closest to the market – have leaned toward the net-long side in feeder cattle.
Then, late last year and early this year, something changed. The commercials started aggressively building a net-short position.
Since then, the price of feeder cattle has gone parabolic:
Today, commercial hedgers are carrying their largest net-short position ever, and ranchers are locking in high prices for their cattle.
It’s exactly the kind of behavior you expect to see in runaway bull markets.
Echoes of 1979
If this feels historic, it’s because it is. In the 1970s, feeder cattle experienced a legendary surge.
Prices stretched nearly 30% above the 12-month average before peaking in 1979. What followed was two decades of sideways action before a new secular bull finally began in the early 2000s.
Fast-forward to today, and we find ourselves in familiar territory:
Feeder cattle are trading at fresh all-time highs, and the distance from the 12-month EMA is the widest we’ve seen since that 1979 blow-off.
The parabolic uptrend may be closer to the end than the beginning, but until price quits climbing, I’m staying in the saddle.
This is a historic uptrend in a commodity most investors never think about.
Across the plains, this bull run has been a life-changing force, just like the ones that shaped the generations before mine.
I’m riding it until it bends, doing the best I can to make my people proud.
Stay sharp,
Sam Gatlin
Chief Cowboy, TrendLabs