Market giveth market taketh

[WiltonRanch]

Think the higher end breeder market will take at bit longer to deflate but it will happen. $4000 heifers may work on $1500 steers if it stays but you know full well that won't happen. Mark my words we'll see $800 steers again and guys will take it on the chin as usual. When cows were cheap guys really watched their expenses but I bet some have got a little lax lately. I know I'm sure sharpening my pencil again to see what a guy can do more efficient and cost effective. One thing we have done last couple years is keep a lot more of our own replacements and buy opens rather than breds. I know some say breds are a better proposition but the cash outlay is crazy these days. As well we have culled the crap out of our herd the last 8 years and tried to buy some bull pedigrees that are noted for good females. My goal in a perfect world is to only have to buy Bulls and nothing more.

[kato]

We never unsharpened the pencils. Lol

I guess that's one legacy bse has left, at least for those who survived it. We did however use the good times to pay down debt and replace some equipment that was pretty much being held together with twine, recycled parts, and luck.

Those high prices also spooked us right out of the backgrounding business. We've gotten the cow herd looking pretty young now, and gotten back some numbers that went down over the past five years, so now we're as ready as we can be for reality. I think a lot of producers have done much the same thing as we have.

After what we all went through since 2003, a so called normal cattle cycle should be quite manageable. At least we know that if and when prices drop, they will come back.

[WiltonRanch]

Exactly Kato. I am more worried about drought and not producing enough economical feed. We are price takers and the only control we have is our cost of production and minimizing death loss. Between the 2002 drought and the following bse debacle it has made me and many others cautious and somewhat cynical. How can you forget backgrounding all your 2003 calf only to get less money than if you sold in the fall. The next couple years we did the same thing and made out not bad but when margins are thin absorbing that much of a loss is brutal. Last year or two we for the most part took ourselves out of the bred heifer market because it is the wrong time in the cycle and prices aren't sustainable long term. Besides when $3500 bulls are trading for $5000 you know it is becoming inflated. Good for guys selling all around myself included but it's more money outlay and a larger exposure to risk. I seen so many in 2002 borrow hundreds of thousands to get their cows through only to lose it all with the bse fiasco. I won't expose myself like that. That would be bad as grain farming and look at the scale needed there to justify a living.

[kato]

But..... A bit of perspective... I was cleaning up in the office today and took the 2003 book off the shelf. I saw we sold cull cows for $1200 on the 9th of May, and in the fall we sold a mature 2000 pound plus bull for $317. Now THAT'S a market drop.

How on earth did we get through that? Amazing.

[ag-boy]

some nice reading ! on cattle prices
as a old time cattleman , we all should have learned from b-s-e drop and now the big price drop, yes most of us have paid off debt.
remember this new ab government does not have the money to bale us out like before with oil at 37 dollar !
federal liberal party JT spending every day and dollar at 70 cent .
are we in trouble ???
our young people doin,t worry at all yet! OK we all have christmass coming !! so how bad is things gone go down in cattle price ?
watch January for bargains coming up !
but to all of you good readers on Agriville, all the very best and good health in to the new -year and a
MERRY CHRISTMASS

[grassfarmer]

Kato we get through it because it's the cyclical nature of agriculture. When I moved to Canada in 2000 we were in a "down cycle" in livestock in Scotland. Our stock was all sold along with our farm to the new owner - I remember well the valuation we got on a number of cull ewes we had on hand - "zero value".

Since then sheep and cattle over there have traded at higher levels than we ever thought possible. But they have down to low levels again too. What goes up must come down. It seems a constant in this business.

[kato]

The bse down cycle was twice the length and much deeper than any cycle ever before. I can't count how many times we "pulled a rabbit out of a hat" to get through each obstacle. Lol. It taught us a lot about thinking out of the box and being creative.

Lessons learned that won't be soon forgotten.