Are prices going up or down?

[forage]

Just bought 50 head of red angus cross cows with char. calves at foot for 1200 to 1350 last week, average age sec to third calvers for the high end and 4 to 6th calvers for the low end. Doesn't make sense to pay for a 1200 pound heifer for 1200 dollars no matter what they are worth this fall.

[grassfarmer]

Here is a report out of the US that might show some
of the dangers to threaten high cattle prices.

http://www.cattlenetwork.com/cattle-
resources/cow-calf/USDAs-Corbitt-Wall-Feeder-
steers-heifers-plummet--160887775.html

[ASRG]

I think the price forage paid for those pairs is pretty attractive? I didn't realize pairs had slipped that much. My neighbor just told me they weren't worth anymore last week at Olds auction!

[ASRG]

grassfarmer: I understand your caution after reading about what is happening in the US. Corn crop not doing well and prices going through the roof, lots of cows hitting the slaughter market due to poor pasture conditions.

Apparently the so called "recovery" in the USA was fueled by exports and with a general slow down in the world economy, exports are starting to dry up?

It kind of bugs me that my old cows are doing their job (and I'm sort of doing my job), but the bright lights in government and banking sure as hell aren't doing theirs!

[kato]

Steers 666 lb @ 1.5125 = $1000.33
Heifers 707 lb @ $1.380 = $976.37

And that's a wreck?

[gaucho]

I find ironic reading this post about guys whining about having to pay too much for replacements or cows and yet they themselves are cow calf producers and if the shoe was on the other foot where they had surplus females, they themselves would not sell for anything less. I agree that there are still some opportunities at the right sales but its always amazing how many want to get in when things are up or going up.... then sell out when things are in the tank

[kato]

Our policy has always been that when the banker says we need to buy cows, then it's time to "Run Forest Run". They are the worst ones for missing the boat, and they are very consistent at doing it. I suspect they are doing it right now, or at least last winter. When prices are high they can't hand the money out fast enough. As soon as they crash, they want it all back. Never fails.

The fact is that over the lifetime of a really good cow, her value can double, then drop 50% and then double again. Cows are long term investments that you need to keep through the ups and downs if you're going to come out on the plus side. And it could take years to do it.

[T.N.T.]

I don't quite agree with that Kato,during the bse years the boys put together a fair sized young herd and cheap and they did a lot of it with farm credits money,and they were never rejected money once.There original investment has already at least quadrupled in value since then.I guess they did learn something from the old man after all .

[kato]

Ah, but I said bankers, not Farm Credit. Two different things, IMHO.

We used to deal with one of the big banks, and the market crash in 96 pretty much cured us of that. We took most of our business to FCC, and were happy that we did. We did still keep an operating loan at the bank, but that was all.

When BSE struck, the banker told us "Don't worry, we'll stay with you through this." They actually called us a couple of weeks after May 20, and asked if we needed any money. We said "No, not right now, thank you."

Fast forward to year end 2003. The market was going up down and all over the place. It got really really bad. One week my husband was at the auction mart, and watched our neighbour, who had panicked, sell his calves for 45 cents a pound. We called up the banker and said, "Remember when you offered to lend us some money? We would like to get a bit from you so we can feed our calves for a couple of more months until the market improves." His response? "No. You better sell them now"

Off to FCC we go. Got some feeding money, an operating loan, and kept the calves until February. We made almost $40,000. more than if we had listened to the bank.

Your boys did well going with FCC. I really have to say that we appreciated them during those tough years. When equity took a big nosedive, they pretty much stood back and gave everyone breathing room. I don't know of anyone who was shut down by FCC in those years, but I know of a number that were forced out of the business by banks who had no faith in them.

And I bet that those same banks have been pushing money out for cows again. I just hope that they don't jump ship when the inevitable ups and downs come along.

[T.N.T.]

Kato you are right,i just lumped them all together.The boys when they decided they were going to take advantage of the low cattle price,first went to the bank and were turned down also.Then they went to fcc and by the next sale they were ready to start buying cows.

[kato]

They were smart fellows. Good for them!