Even more getting out of cattle?

[riders2010]

I see with the prices at this level some of the last cattlemen in our area here are taking advantage and packing it in. Instead of optimism they distrust the industry and are getting out. Do you guys think prices will stay stable at these levels or drop?
I think the industry missed the boat in so many ways. People are catching on to knowing what they are eating, catching on to the taste of less feedlot style cattle, or not?

[grassfarmer]

I think we are in a "new" trading range with cattle prices and they are likely to remain there. I'm guessing they might be at the top of this new trading range just now and they will drop back at some point - but not into the lower range that we were trading in even this time last year.

Looking at Darrin Qualman's research for the NFU where he compared inflation adjusted cattle prices 1930s onwards it is clear we are not in "new" price territory at all - we are reverting to what was typical from 1942 to 1989. He showed that Ontario 8-900lb steers traded in a range between $130 and $280 throughout that whole period in today's money.
Similarly fat steers in that period traded $130 to $280.
So maybe I'm wrong, maybe we aren't near the top of the "new" (old) trading range?

[kato]

As a group, we are all getting older. A lot of producers are thinking of retirement looming, and with the distrust of markets that's been pounded in to them, this is looking like a good time to cash out. I don't think the sell off is done quite yet. I think we will have to have an extended period of profits before it will seem like there is a reason to stay.

We've been having this discussion at home for a while, and our personal conclusion is that we have a cow herd that's worth a huge amount more than it cost, but they are producing calves that are worth more than we would ever have imagined even a year ago. We have decided to cash in on our investment by selling some valuable calves, rather than cows. Keeping the cows makes more sense to us. After what we've all gone through these last number of years, it's time to enjoy this business, at least as long as our health stays good.

The bigger worry in my mind is how we are going to attract the younger generation back in. Our sons will not be raising cattle when we retire, and that seems to be a common scenario on a lot of operations. It has gone from being non profitable to being too risky and expensive to buy in in a very short time. It will take a couple of years of consistent profits to solve this problem too.

There is not much appetite for financial risk out there. We have to wait a while until it seems the market has some solid foundation under it.

[ag-boy]

yes we are getting near the top of the market!
so what is wrong to cash in and take a big profit !
get back in when the market is dropping 200 to 300 dollar a head , believe me as a old timer this will happend again .

[15444]

You can't replace the exiting farmers, only a percentage of them, and 1/2 of those entering probably have no clue what they are doing...only that there is lots cash flowing around and they want a piece of it.

My new neighbor, not a cow person, went out and spent 137k on feeders last fall. Up to this point, 1/3 have died as he doesn't know what he is supposed to do to keep them alive, but he is smarter than everyone else. He is on the edge of losing his newly purchased operation because all he sees is dollar bills, no real work involved.

[ag-boy]

nice reading this smart man lost so many cattle he had fun and free enterprice is the game to learn from
believe or not the story????

[15444]

Well he thinks he is smarter than everyone else. Doesn't think too highly of my opinion. When he first came here, he thought of growing barley for silage. Told him that was a very bad idea. A good barley year here is once in every 10-20 years - far too wet for it. Do oats instead. So he listened to that bit of advice. Fast forward to the fall, he harvested a grand total of 800 bushels off 80 acres, which consisted of 500 bushels of weed seeds, and 300 bushels of pathetic oats. So even though he showed he was a pathetic farmer, I got blamed for that in his mind. Last year, he sought out to go barley as he originally thought. I warned him again. I am just dumb kid I guess. So he plants 100 acres of barley. Fast forward last fall, barley is short and stunted. Cuts it all with a haybine. And then the rains come. Sits for 3 weeks, starts sprouting. Gets the neighbors in with new JD baler to bale it up. Far too wet and rotten even for silage. So they bale up about 80 bales worth and it still sits to this day, rotting around the edges of the fields. This year, he made one pass on those same fields with a cultivator and drilled in oats. I can barely make out a few oat plants in some of the fields, amongst all the weeds.

[littledoggie]

We are 60ish and talking about our exit strategy. One thing for certain, it won't all happen at once. Unless one of us gets ill. We are seeing some people downsize the cows, but staying in. We are seeing some operations get much bigger. There are some younger guys in our area, 35-45 years old or so. The industry is changing, no doubt. Up here in the Peace, the auction mart business has just undergone a change. The Grande Prairie Auction Mart has closed and Willowview Auctions in Beaverlodge has been sold to VJV of Ponoka. Don't know what VJV in Dawson Creek will do - there is speculation that VJV will relocate to a more central location in the Peace.

Stay tuned....

[kato]

We watched cull cows selling for over two thousand dollars today, and a couple of big cull bulls for over three. The plot thickens.....

[westernvicki]

I bought cows this spring. Reasons: cattle numbers low, demand from Asia increasing, average age of cattle producer old, and unlike grain, there is a continental market which when the export market cools remains somewhat stable. Doing the numbers on todays cattle prices, indeed those of you who weathered the mad cow indeed deserve every penny of this rally. Even at todays prices it would take a huge number of cattle and a whole lot of assets to replace the wages one can earn in the skilled labour job market today.

Cow herds are difficult to define in economies of scale in many regions of the world; leaving the cattleman and hopefully his equally enthusiastic partner(s) a rare and vanishing breed.

Will some come back? Well maybe a few years of 5$ wheat, and half a million dollar combines later, yup. NO rally is forever but one cow, one calf 50% heifers less replacements to the herd and culls it may take a few years.

Enjoy you old timers and cattle folk REALLY deserve this rally.

My girls are doing well. Picked a fine year to get in, even with cow prices being up.

[littledoggie]

Cull cows for $2000?! Wow, that sure gives you pause. Why wouldn't you keep replacement heifers and get rid of those old cows? Keep your herd young.

[wlc]

900 lbs hfrs @ $2.00/lbs to go on
feed is $1800 .Can they be kept for
cows ?

[littledoggie]

What were those heifers in May or June? Of course there was no way of knowing what prices would do. Hind sight is 20/20. I wonder what bred heifers will bring this fall.

[Horse]

Littledoggie I say bred hfrs at feedlot price plus a dollar. No intrest in getting back in for the young fellows to much money and to little return. That is unless you can play the welfare cow angle. Land to costly and intrest rates about to rise. IMHO

[littledoggie]

Sounds like a bred heifer is a win/win if she costs less then a cull cow. Keep your herd young.