Not a great market

[ASRG]

I kept a few heifer calves last year. I doubt they are worth any more than I could have got for them last fall. I guess I'll keep them until September.
Sure am getting sick of all the snow.

[smcgrath76]

Cattle were a bit softer at Viking this
week compared to a year ago or even a few
weeks ago. Good grass cattle were still
decently priced.
I guess perspective depends on cash flow
needs, feed supplies and break even. If
we get a good barley/corn crop, things
might be interesting this fall.

[grassfarmer]

I looked at some figures from the cattle price
insurance perspective. Average market price of 550lb
heifers on Nov 29th was @$137/cwt. so $754.
800 lb heifers look to be around $120/cwt this week
from auction reports so around $960?
You could have bought price insurance Nov 29th for
period ending March 25th $132/cwt coverage for
$1.51/cwt premium. So roughly speaking you might
get be in the region of $40 top up for a premium
costing $12. Not a big payout this time, but some.

Looking forward now coverage for $140/cwt ending
23rd Sept would cost $2.08/cwt. I wouldn't keep the
cattle without buying the insurance - it looks to be a
good tool to me.

[smcgrath76]

GF - the good thing is you also don't
have to sell the cattle. You could
insure your 2013 calves for the fall,
reinsure as feeders and then reinsure
for the fed market and lock in the
basis.
Basically the insurance is just pooling
producer money to buy options contracts
on the cattle which is simpler than
buying them yourself, and provides
volume flexibility.

[ALLFARMER]

Very sick of snow here already also!

[wlc]

Sean Does CPIP use the futures market ?
I understood they didn,t

[kato]

No price protection for us here in Manitoba. This is why we didn't buy calves to background last fall, which is also why we didn't lose money like everyone who did. It's not been pretty for anyone who tried it here. Lots of money lost this year.

Oh ya, how could I have forgotten about Agristability! That's going to save everyone!

Not.

[grassfarmer]

I think it would have worked OK for me this winter if
I'd bought the cattle well. We have fed 2 year old hay
and wheat distillers for under $1/day feed and
mineral cost and got around 1.6lbs a day gain. That's
before yardage costs but they are not large when you
winter them out on the pasture and don't use
bedding. Once you figure out the manure value/land
improvement resulting it's been a pretty profitable
winter to background our own calves. The key was
the energy value of the hay we bought - 64% TDN for
just under 3c/lb.

[Horse]

I feel taking this insurance is just shooting your self. What good is it for the average producer, like gf says $40 big deal to the average but if you are one of the greedys in this biz such as NBI you are laughing all the way to the bank. Seems everything is going the mega numbers game.
If not for programs like this the big guys would be a little more cautious with their borrrowing, but we as little dogs still want to crap on the big piles.

[grassfarmer]

It's actually size neutral Horse - If you have two
feeders at $40 versus a guy with 500 at $40 your
feed costs are proportionately less also.
This tool actually allows the guy with two feeders the
access to a degree of price protection the guys with
100s or 1000s have had for a while with their ability
to forward contract based on liner loads of same
weight/same type cattle.

[kato]

If you live in Manitoba, only the big guys get to lock in anything. Futures, contracts, options and all that are only available to the big operators. Nobody's going to cover the small numbers. Those smaller operators are on their own.

And that's how the big get bigger.

[grassfarmer]

This cattle price insurance deal is an Alberta
provincial thing at the moment chances are if it
proves successful it will become a federal thing
available across the country.

[ALLFARMER]

That's life Kato

It's all about the choice WE make.

We still live in a free country. Could be much
worse off. An estimated 200,000 people are
imprisoned in North Korea. They would kill to be
in our place.

[15444]

Or, Kato, you could be in Ontario, which has a cattle insurance plan that is a joke compared to Alberta's. Only here you can't complain about it because you are treated like an ungrateful prick.

[brian99]

The cattle price insurance program administered by AFSC is truly that, an insurance program. No options are bought and no hedging is done by the insurer or the insured on futures markets. It is a completely user funded program, no spec money to cover losses. It's hard to see it being sustainable long term without spec money. Right now it will work because cattle look bullish, but when this thing reverses and everyone who subscribes collects every year for a few years, what then? I assume premiums wil go up and up, until it doesnt make sense.

This program is for everyone, so you could theoretically insure 20 pounds if you wanted to. Maybe AFSC should do that, let guys try 20 lbs for free, to get a feel for the program.