Will Ranchers Be Holding Back More Heifers in 2010 - Herb Lock, FarmSense Marketing

[kato]

I agree. I've heard farmer's markets described as a "sleeping giant" in the media. The media is correct. I'm at the market every week, and see it in person. People really do want to know where their food comes from. We raised a few meat chickens this year for ourselves this year, and just to test things out, I put a sign up at the farmer's market to sell a few spare birds. It took about 10 minutes, and one fellow took them all. I got requests for a couple of weeks after by people who had seen the sign, even though it was only up for 10 minutes. The demand is there. No doubt. More chickens next year.....

As for the beef side of the equation for our farm, Hubby has absolutely no interest in finishing cattle, or dealing with the public. It's just not his thing. In fact he really REALLY dislikes it. If we lived closer to a big city, I'd work on him to change his mind, but at this point, I don't see it happening. You never know though, he may change his mind some day. In the meantime I'll hone my marketing skills. LOL

I also agree with the unsustainability of large scale fossil fuel based agriculture. Bigger is not always going to be better. You hear people speak about "quarter section farms" with a condescending attitude. I don't remember back to the days when there was almost literally a farm on every quarter, but I do remember when there were a lot more smaller farms than there are now. One thing that comes to mind is how people on these farms reacted to market downturns. I think that back then market signals actually worked better than they do now.

At one time, prices would drop, livestock numbers would drop, and prices would come back up. The main difference between then and now is that at that time, a lot of people would cut back a bit, and now, a few people have to cut back a lot. Back then no one lost the farm over it. Today, in order to correct the balance, farms will be lost, and the skilled people running them along with them. And the really big ones, I'm thinking along the lines of million dollar hog barns for example, will not cut back production simply because they've got too much invested. When that happens, the market and supply balance does not exist any more, and you see the kind of mayhem that just took place in the hog business.

[kato]

As for heifers, we're trying to figure out a way to keep some and replace some of these old girls who've been hanging around longer than they should have. We'll not be expanding though. Just staying the same for now with any luck.

[riders2010]

The individual farm market idea is great, many people buy local from the farmer, don't want to start the argument but they do because of just as good if not better product than at the store and you know where it comes from etc. However we are a relatively small population the amount of downsizing would have to be huge wouldn;t it to get to a point where just enough animals for all to make a living at it? And in grains wouldn't take many farmers to supply the local grain requirements etc.

[burnt]

riders2010 - it will be interesting to see how close we are already moving down toward meeting domestic supplies only.

We have historically been heavily dependent on exports but with the shrinking cowherd, I think that balance will be shifting dramatically before this herd size stabilizes.

While producing only enough for the domestic market may sound like a good thing, I think it is a scenario that comes with its own Trojan horse.

That horse would contain the unhealthy dynamic of having no competition for our finished product, however tight the supply might become.

The consumers would be the losers for sure. The commodity beef producers would be just as well or poorly off as they ever have been with their prices only reflecting the usual, disproportionately small share of the retail value.

The winners would be those who are direct marketing since they would be in a position to capture full retail price plus whatever premium their product commands.

Meh, but that's my humble opinion only.

[grassfarmer]

Riders 2010, Is downsizing a bad thing though? If a cattle producer can make $400 an animal versus $50 he can sell 10 instead of 80 to get the same margin. Maybe instead of reducing to 10 he chooses to sell 20. He only maintains a quarter of the animals but nets twice the margin. Is that downsizing a bad thing? Who gets hurt by the downsizing? a couple of multi-national packers, some mega "captive supply" feedlots, auction marts, truckers, vets and other associated input suppliers. Sure there are some good guys in there but my priority is cattle producers because that's what I am. I don't think it need be bad for cattle producers.

[riders2010]

Good points grassfarmer and burnt, I maybe should not enter into these cattle conversations because not in the industry, I just see some simularities to the grain part. I am selfish somewhat I don't want the neighbors producing their product to quit they and you produce an excellent product that I enjoy greatly over the store stuff generally speaking.

But you guys would know more of the answer to this, so assume we are at the point of only domestic product, at that point market is only domestic the big processors exporters etc. out of business, the store price given to farm direct there has to be alot of room for the next guy to say hey I can do that for 350 and the next hey 300, so where does that end up throw in the store with foreign cheaper beef?

[riders2010]

I guess should be reworded what factor is the store with cheaper imported beef i'm sure they can lower the price alot for a long time to gain market control should foreign beef be limited etc?

[kato]

Foreign beef is the wild card. If our domestic supply dried up to the level needed for domestic markets, I'd bet we'd be down to one big packer in the West, anyway. Therefore lower prices. And if we did still have two packers, the stores would bring in foreign beef, therefore lower prices.

Some would say it's just as easy to import, but that's a road we do not want to go down. Quality, health standards, processing standards, and exchange rates would be all lined up and ready to cause problems. To say nothing of supply. If you'd have asked anybody in the beef business five years ago if the day would come when Argentina would stop exporting beef they'd say it was impossible. Never happen. Not in a million years. Argentina is the beef producing powerhouse that's just waiting to flood our market.

Not.

Argentina stopped exporting beef. Never say never. We've been lectured about how we're too dependent on beef exports in this country. That's nothing compared to the dangers of being dependent on beef imports. Or the lack thereof.

[DogPatch]

Agriculture (with Livestock) is finished in Manitoba. The government, so long as its NDP and voted within the Perimeter will continue to smoke the Grass, and listen to KD Lang, and whine about the green stuff on their Lakes. Once the pastures get overgrown and our Buddies start lighting fires again will they have another bitch about the fires in Rural areas.

But when we finally get ride the lame politicians, it will be too late for family farmers in MB.

[burnt]

Well from the tone this thread has taken it kinda sounds like not too many are planning to retain heifers this fall . . . heh,heh,heh.

[ProFarmer]

Had one neighbor retain 150 heifers for breeding. All sold and once they are fat in 90 days their heads will come off and the guts will be put into landfill..

[riders2010]

I know it's not an easy fix and it is a pretty basic simplistic way to view it, but with so many people going hungry well actually starving and considering the product produced here it's pretty sad to be talking how low the production can go and that it is a good thing. I still feel it represents such a complete political failure of our leaders and no this is not just aimed at the current gov. but none of them have or had a direction for anything in agriculture. Get the hungry in a position to buy our products man that would solve the need for any gov programs etc. The trade deals where companies here are exploiting the labour forces over seas paying them nothing so they can buy nothing is part of the problem. jmo We have gone way too far in all industries to support free enterprise to the point there is no competition, what is the difference between one or two companies that usually act together dictating the price you will get or a country where there is no free enterprise and some yahoo telling everyone what they will do or not yet filling his pockets. I know I'll get cut down but in my opinion we are a legislated legalalized dictatorship no different than the third world countries in many ways except the people skimming everyone else have a piece of paper instead of a gun saying they have the right to do it.

[grassfarmer]

I think talking about the country being a net exporter, supplier of domestic only or under-supplying the home market are academic as far as competition or higher or lower prices are concerned. When you get the processing industry down to so few players we are screwed anyway. Corporate processors and retailers almost world over have complete control of the supply chain and can manipulate it any way they want. The only way around that is to go direct from beef producer to consumer.

Riders2010 brings up good points - I have long felt it a disgrace that people go hungry while good agricultural land is underused or standing idle. The solution to this is not simple though - you can get food to ports in African countries only for it to lie there and rot. There are logistic problems of transport, political problems with dictatorships who are quite happy to let their people go hungry so they can live in a palace and have the latest weapons. There is no reason that people should be starving in Zimbabwe and needing food grown in Canada - Rhodesia used to be the breadbasket of Africa.
We have a grain based beef production system in north America which arguably is taking feed grains out of the mouths of starving while grasslands are used far below their potential. We have the ethanol insanity fueling the SUV culture with feed grains grown on good agricultural land.
I think we are very close to a total collapse in food supply - the dangers of a handful of companies controlling the worlds seed supply, controlling the shipment, processing and retailing of food. The rising world population, the apparently changing climate. I think we have built an elaborate deck of cards upon a foundation of un-sustainability and it won't take much to bring it tumbling down.

[burnt]

riders2010 - you hit the nail on the head, especially with your last statement about robbery being conducted by guns or pieces of paper.

Payday should be a happy day, but it often is not at our house when my sons come home from work complaining about the gov't taking over 1/3 of their paychecks.

It's all good I tell them because those deductions are funding those retired MP's big fat pension checks, etc.

I tell them to start building a bit of a herd with their money and they look at me like I'm crazy and walk away. No heifers retained here. Anytime soon.

But at least the complaining stops...

[greybeard]

Some very good posts made above. If nothing else it shows this board is probably more interested in cow/calf issues as Annie’s market updates don’t usually get much for comments.
I think the main point here is that regardless if there is finally some profit in cows if that is 25 or 50 or 75 dollars that is not going to save the one man operation in the commodity business. In a business that runs in cycles you need some years with relative windfall profits to make up for all those bad years. I think that is what most of us have been hanging on for and I think that was what Shaney kept hoping to hear when pointing out that the cow herd will continue to decline. $5000 profit per 100 hd is not exactly a windfall.
Some mention was made of technology not helping the cow/calf industry. When compared to the grain side, where direct seeding has probably allowed a father/son unit to produce 2 million in sales and participate in some windfalls due to much increased production at higher prices.
So will the cow herd ever decline enough to return the hundreds of dollars per head to make it profitable and return that $30000 cost of living and respectability to the traditional family operation?
Where do the hobby operations, from the mega large “image “ ranches to the 5 cow “big hat” guys fit in all of this?