cattle cycle info

[topper]

since september the cattle market seems to be heading in one direction(down). I was wondering what opinions are out there on where we are in the cattle cycle(are the good days over? is this just a stall? maybe the best is just around the corner?)

[pandiana]

My best guess is that 1. in areas affected by drought a lot of cattle are hitting the market because of short feed supplies providing a buyers market. Nobody will keep anything around that doesn''t have a clear potential to pay for itself.

2. Demand is reduced as summer barbeque season is significantly delayed because of the unusually cold weather.

Unless the demand for beef fails to recover because of lack of consumer demand, reason would seem to indicate that as the supply is probably lower than it has been for some time, a sellers market must be forthcoming soon.

[cowman]

Harlan Hughes says the peak is still a couple of years away. But then he doesn't own them!
I'm a little leery right now! When I hear the governor of the Bank of Canada saying good times are right around the corner, and we need to crank up the interest rates, I tend to clutch my wallet a little tighter!
There seems to be a pent up desire by many people to get out there and buy cows. Only the threat of no grass or feed seems to be thwarting this desire! However if you look at the prospects of making some money it is slim to none!!...barring some sort of miracle! At least that's how I see it. It just seems an awful risky gamble, to me!

[mbfarmer]

With so many cows, and replacement type heifers hitting the market, the possibility of the national cow herd growing is slim to none. If the majority of these cows and heifers are slaughtered and our national herd does not increase by much, this downward spiral should not last too long. Back in 1996, feed grain prices went up...cattle markets came crashing down but we recovered fairly quickly over the next 4 years. Maybe history will repeat.

[cowman]

mbfarmer: You could be right. I have a couple of concerns with the cattle cycle concept right now. The main one is the Americans efforts to change the rules and our own governments lack of a spine. And of course the continuing threat of drought.
A typical example would be what happened with corn and feed barley this past winter. With the widespread drought in the main barley growing region, the supply was down. Prices started to rise but were effectively stopped by cheap subsidized American corn. Now we all know the American government was subsidizing this product but did our government do anything about it? No. And I guess if they had put a tariff on, the feeders would have just moved across the border. Which is what is happening right now anyway.
In the meantime Australian beef is flooding into our market at a greater rate than last year.Why? Because the powers that be have decided beef is too high. Basically we are maxxed out at the market place. The retail shopper won't pay anymore. Now if grain continues to rise then you the cow/calf guy must take less. That's just how it is.
The grain farmer is getting sick of being screwed. Barley should have been a lot higher than it was this past winter. If the government won't protect the domestic feed market then the farmer won't grow for it. When I was a kid barley was just about the only crop grown(pre-canola days). Wheat was pretty much a novelty. Now I would think barley is about the third crop around here behind wheat and canola.

[crazeeakerz]

Several months ago I read an article in which the writer (I can't remember who)discussed the cattle cycle as it related to historical trends. By use of statistics and charts he showed a cycle of about 10 years and that we are now approaching the downward part. According to his reasoning we should bottom out about the year 2005. Makes you feel so good, doesn't it?

[cowman]

That was probably Harlan Hughes. He has sort of revised his projections and now says the peak will come in 2003. 2004 will be about the same as 2001, with 2002 in between. I think he's predicting 2007 as the absolute bottom. I think he's pretty much on the ball and probably not too far off. Incidently he's predicting the peak at $1.04 U.S. for a 500/600 lb. steer! That is $1.66/lb. Canadian or $915 for a 550 lb. steer! Hope he's right!!