Dollars...

[PureCountry]

What kind of different roads do you foresee Sean? I see alot more backgrounding on farm as grassfarmer and rkaiser eluded too, and alot more direct marketing. Nothing increases cash receipts at the farmgate like town folk driving in with cash, and leaving with produce. I see a few changes like these in the future of our own place, because it's something we can do without great expense. We have the grass and water to grow beef. We may not be able to sell every animal consumer-direct yet, but the more we can, the more dollars stay in my pocket and not in those of ABP/CCA/XL/Cargill/feedlots/auctions/order buyers, etc.

[grassfarmer]

Pandiana, I'm not sure what the article you posted was really about but it doesn't make a lot of sense to me.
Among the most crazy statements in it were the 19% increase in slaughter plant capacity coming on line by the end of 2007 - where is this happening and are we also remembering to reduce cull capacity by the number of closures we have had?

Also the statement that slaughter capacity has risen 3.5 million to more than 5 million. That implies we started at 1.5 million which means we have increased capacity 233% doesn't it?.... since when 1970?

Also in the conclusion "or the outcome by way of a more competitive packing sector." How is it more competitive? there are less players now controlling more of the capacity. The article indicates "our" packers are not as competitive with US ones as they were in the 1990s due to higher wages.

[smcgrath76]

I see a couple of opportunities including the grassing/backgrounding one. There are some opportunities for lowering winter cost for some operations based on aftermath of grain production. For a lot of guys electric fence and controlled grazing is an opportunity they have not yet taken advantage of.
On the other end, I think there is opportunity for retained ownership, some direct marketing (although never forget there are only 32,000,000 Canadians), and further foreign marketing opportunities. I also think we will see some ownerhsip opportunities for producers in regards to processing facilities. I am not sure what these are yet, but I think it certainly has some potential.
I do think that many producers are going to leave the industry like it or not, and the big will get bigger. I just heard of an expansion last week to be at 3000 cows.

[kato]

It'll find a balance, eventually, but in the meantime, I think we're going to lose more producers. I heard the other day that in Manitoba the bred cow sales are booked until the end of the year already. In our province there are a lot of older producers who just want out. They've had enough.

We, on the other hand, being the thrill seekers we are, will stick it out. I guess we're just adrenalin junkies.

One bright spot to a high priced grain market is that overweight cattle just aren't there to add to the burden.

[cswilson]

It will all come out in the wash. We'll finish our cattle again I imagine-the feedlots will compensate for the high dollar and high grain with the prices they pay for cattle. It's amazing how some of the best years to buy and sell cattle end with a '6 or 7'. The most money I ever made on grass cattle was spring of '96 when the price cratered. The old adage 'When your crying you should be buying' was true then and I have a feeling is true this fall too. Most guys will do the lemming rush to the stockyards though I imagine.

[grassfarmer]

True enough most calves will get sold at auction regardless of price, but if you are having your cattle custom fed won't you be paying for the high priced grain too? I imagine the custom lots will be protecting their margins on this enterprise in a similar fashion to bidding down calf prices.

[cswilson]

Most times when feedlots start to buy their breakevens they tend to crack back orices a little more than they probably have too-when they get the rose coloured glasses on they tend to spend more than they should too. I'll take my chances on feed before I'll do the dump and cry.

[DiamondSCattleCo]

One of the biggest problems we have are all these futures traders and industry forecasters being complete damned idiots. I've been watching grains going up and up and my calf prices going down and down and then I hear on the radio yesterday:

"US futures prices took a hard hit today when industry analysts realized that the US harvest is going to be far in excess of original expectations and that demand for ethanol was going to be lower than expected due to lack of plant construction in the US."

I say we ban futures trading from the commodity market, as these idiots don't really have a clue whats happening from day to day, yet we producers have to pay for their mistakes.

[perfecho]

Good luck banning future trading....I have always been amazed that you could make more trading farm products, than actually growing them....especially if you invested the same amount of capital!So... who is smarter? Traders or growers.

[kato]

I wonder if the new cash advances will keep some calves off the market this fall?