how about that cattle cycle..

[tweaker101]

Whats your thoughts on the current cattle cycle?, should a guy be buying or selling?. I was thinking of buying a few bred heifers this fall.

[perfecho]

Looks like I picked the right time to downsize....not! We only put up enough feed so I would downsize, for sure this year. Being 10 miles from Nisku doesn't make hired help feasible.
Personally, I believe 5 years from now cattle will be high again...but the next year or two everyone will plow hay fields and grow as much grain as possible. Herds will be sold in favor of the less labor and more profit in grains. Then, when the world market has a bumper crop, grains will tank, and people will be looking for cattle to feed. Just my humble opinion.....so if your looking for some good cattle.......

[rkaiser]

No more cycle tweaker 101. BSE and now the biofuel thing have looked after that. Those who looked at cyclical markets and made predictions based on those numbers would be foolish to suggest that we are still involved with a cycle. As far as selling high and buying low, this would certainly be a time to buy --- if you have the fortitude to move forward and dedicate yourself to the industry. There are, and will always be opportunities for those who put effort into this industry.

[grassfarmer]

We certainly have not participated in the prosperous cattle cycle enjoyed by our neighbors to the south - so much for a "north American" cattle industry.

Kato raised the issue of the Federal Government advance program in another thread. This got me thinking.... with feedlots paying a flat rate for calves from 5-800lbs it seems clear they do not want to pay for young calves. I think this is an opportunity for ranchers to background calves on their ranches on cheaper forage based diets to the heavier weights. The big problem for many is cash flow. So I checked out the program Kato mentioned. Up to $100k interest free loan re-payable when cattle are sold, based on the program that the grain farmers use. That sounds like a good idea but when you try to access it you hit problems. The Feds say it is up and running - administered in Alberta by the feeder CO-Ops. The feeder co-ops don't know much about it, Alberta Agriculture knows nothing about it. I think this is a crap deal - this is potentially a helpful program but it's October 10th, it's not operational yet and it's very hard to find out about the program. How can the average rancher plan ahead of fall sales with no information? Whereas there are producer meetings to learn how to CCIA tag calves there is nothing promoting this program to producers. Is the Federal government trying to save money here by making a poor job of marketing?

[cswilson]

We just closed a deal on a load of bred heifers-we got treated pretty well by the buyer so there is still some demand for the right type of cattle. If I could find grass for next year I'd be on the calf market right now-there's some money to be made.

[tweaker101]

thanks for the input, if you were gamblers what would you think that the price of a 550lb steer would be next fall?, do you think that it would go down a low of .80? , I was doing some research as I think that Kpd was talking about this a while ago? any ideas what happened to Kpd as I don't see any posts.

[grassfarmer]

You said it tweaker "if you were gamblers..." We pretty much have to be in this business. Calf prices next fall?? who knows, what could you base the guess on?
Just look at the predictions in all the farm papers from a couple of months ago that were talking about strong calf prices through the fall run. Why are we facing a scenario so different now? Personally with US corn prices falling I don't see why calf prices should be so far back. I think it is the feedlots showing their strength by refusing to bid up calf prices - protecting margins by externalising the risk. In blunt business terms I think if some cow/calf guys are willing to sell calves at any price they deserve to be taken advantage of - we are all supposed to be in business after all.
I'm rather surprised by the cull cow prices - down 10 cents from the 40-44cent tops of recent months. With US prices at 56-58 cents and a potential border opening coming in a month why have they dropped so much? Is it just a case of ranchers being weak sellers again, dumping cows on the market when weaning or when they run out of grass?

[PureCountry]

I agree grassfarmer. I can't understand for the life of me why some folks are taking their 4-5 weight calves to town and giving them away. It makes no sense at all. Put the little buggers on the swath-grazing or bales with the cows, they'll do fine. It's purely a lack of ambition as far as I can tell. I don't mean to judge people's situations, but things would have to be in dire straits around here before I'd sell 400lb calves for 85-90cents. If I needed cash flow that bad, I'd dump the bottom end of the cows first.

[cswilson]

I've always told my friends to buy and sell a few cattle every year so they have some money lined up for this kind of year. You can sell yearlings and double your inventory for the same money.

[Reitnorf]

cswilson......you need grass? lets make a deal, I have grass, but a little scared to borrow money to buy more cattle, perhaps we can help each other out.

[cswilson]

Where pray tell.

[kato]

We've been in this business for 33 years now, and we've seen a lot of ups and downs. What's going on now doesn't feel like your usual cattle cycle type price drop. I think Randy's right about the ethanol and BSE driving things. This is more like last winter when the corn specualtors got all revved up and cattle tanked for a while.

The big feeders are building a cushion into the price of calves to cover any further fall in price, and we have to remember that they will make it as big as they can. We're working both sides of this street because we're buying steers to background, as well as having our own calves. For now we'll keep buying, but we're going to hold on to ours for the time being and see what happens.

I think the Canadian cattle industry could well be going through a downsizing right now though, with guys who would have retired a couple of years ago but held on for better returns finally saying they've had enough. It's happening around here quite a bit. Lots of bred cows for sale. I counted up the number in a column in the Co-operator for sale ads, and within about half a page there were over a thousand bred cows for sale. Big and small herds from 4 cows to a couple of hundred.

The cash advance is up and running in Manitoba. MCPA is overseeing it.

I guess if we have to try and find a bright spot in these prices, I guess having low year end inventory values for CAIS could be one. LOL ;-)

[Reitnorf]

southeast sask cswilson