Thinkin' like a packer again

[BFW]

A neighbour is selling 200 calves on Tuesday, and he is estimating that they will average around 710 on the steers, so holding them over would really mean a discount at the packer, as they could easily be finished by April/May of 05.
My guess is that lots of the producers that calve early will not be enrolling in the program.

[grassfarmer]

Which I suppose is fair enough. If the idea is to hold 40% of the calves back obviously it suits the later born and poorer early born ones. Your friend hopefully will benefit from selling into a feeder market with less cattle on it leading to stable or maybe higher prices.

[blackjack]

kato... it is very interesting how fat prices rose 20 cents/ hundred weight in the last 3 weeks... what I find interesting is how the feedlots all of a sudden that are struggling have found 150 $ a head to buy yearlings... maybe BFW can answer one...

[kato]

This'll make presort sales interesting. They'll have to make an extra sort for the tagged calves.

I guess if you were a fall calfer, and then grassed your calves as a routine, this would work perfectly. They would probably not be gone until after Jan 1/06 anyway. Take the money and run.

For us, I don't think it's going to work. No way we can hold them that long. They'd eat up 200 dollars long before their time was up. We can have the 2005 calves pushing a thousand pounds by Jan 2006, sure don't want the 2004 calves to still be around then.

Sure, we like our cattle, but not that much! LOL

[BFW]

Blackjack, I would think it would be a no brainer for a feedlot that is now receiving $20.00/cwt ($270.00/hd) more for fats to invest $150.00/hd more in feeder cattle at least if they thought that these price levels could be sustained and that they have a reasonable amount of working capital left to operate with. The rumor of and subsequent announcement of the fat cattle set-a-side program has also played a large part in the recent runup in both fat and feeder prices as it should result in more predictible prices being paid for the finished animals. Blackjack, not all the feedlots are struggling despite what you hear or read and unlike the fat cattle market the feeder cattle market remains very competitive especially when supplies are short and above all remember that feedlots HATE missing out on a loss opportunity.

[blackjack]

BFW...why did Canfax say just a short month ago there was going to be a glut of fats this fall...that does seem odd now ...last year the fat price went in the tank when the government got involved who's to say that won't happen again... if the industry blows this one with the taxpayer we will have no one to blame but ourselves...

[BFW]

In my opinion the main reason that the fats went in the tank was that the way the government structured the program (against the industries advice) by saying that the program would end either when the money ran out or when the border opened to either to muscle cuts or live animals. The fact that that there was a finite amount of money available created the a huge incentive for people to sell their fats while there was still money available in the program and thus the packers took advantage of the producers extreme willingness to sell as they expected the program to pick up the shortfall. this program does not require that the producer sell his calves to collect the money which should mean that it will be more market neutral. As for the Canfax prediction of a glut of fats this fall I expect that that will be the case as the grass yearlings begin to come to market after a short stint in the feedlot along with a lot of the other cattle that have been coasting along in various retained ownership programs. Hopefully the fat cattle set-a-side program will allow these cattle to be slaughtered in a more orderly fashion than has been the case resulting in higher prices paid to the feeder for finished cattle and ultimately translating into higher prices for calves and feeder cattle. Again this program may not be perfect but it is far better than doing nothing and I think we should commend the government and industry people that designed it.

[BFW]

In my opinion the main reason that the fats went in the tank was that the way the government structured the program (against the industries advice) by saying that the program would end either when the money ran out or when the border opened to either to muscle cuts or live animals. The fact that that there was a finite amount of money available created the a huge incentive for people to sell their fats while there was still money available in the program and thus the packers took advantage of the producers extreme willingness to sell as they expected the program to pick up the shortfall. this program does not require that the producer sell his calves to collect the money which should mean that it will be more market neutral. As for the Canfax prediction of a glut of fats this fall I expect that that will be the case as the grass yearlings begin to come to market after a short stint in the feedlot along with a lot of the other cattle that have been coasting along in various retained ownership programs. Hopefully the fat cattle set-a-side program will allow these cattle to be slaughtered in a more orderly fashion than has been the case resulting in higher prices paid to the feeder for finished cattle and ultimately translating into higher prices for calves and feeder cattle. Again this program may not be perfect but it is far better than doing nothing and I think we should commend the government and industry people that designed it.

[BFW]

In my opinion the main reason that the fats went in the tank was that the way the government structured the program (against the industries advice) by saying that the program would end either when the money ran out or when the border opened to either to muscle cuts or live animals. The fact that that there was a finite amount of money available created the a huge incentive for people to sell their fats while there was still money available in the program and thus the packers took advantage of the producers extreme willingness to sell as they expected the program to pick up the shortfall. this program does not require that the producer sell his calves to collect the money which should mean that it will be more market neutral. As for the Canfax prediction of a glut of fats this fall I expect that that will be the case as the grass yearlings begin to come to market after a short stint in the feedlot along with a lot of the other cattle that have been coasting along in various retained ownership programs. Hopefully the fat cattle set-a-side program will allow these cattle to be slaughtered in a more orderly fashion than has been the case resulting in higher prices paid to the feeder for finished cattle and ultimately translating into higher prices for calves and feeder cattle. Again this program may not be perfect but it is far better than doing nothing and I think we should commend the government and industry people that designed it.

[oxbow]

Cowman,"There used to be a lot of blaming Japan but that is no longer the case? We now know who is giving us the shaft...and it is the States!
I guess they take Canada for granted and figure they can treat us like their idiot cousin or something? For a lot of Canadians(especially farmers) this whole thing has been a revelation about what a bully the US is? Maybe helps us understand why most of the world hates Americans with a passion?"


Cowman, you offer far too much stupidity for me to correct, but I can correct some.

First, the US is importing Canadian beef.
Second, the US tried to open the border to live fed beef, but was tied up in court.
Third, Japan is not buying shit from either the US or Canada - but some pricks villify the US? Why not the vitrtiol for France and their closed market.
Finally, if you feel the US is "a bully" because of a court stymie, The US can live with your hatred the same as we live with all those that would commit genocide in Isreal hating us.

[oxbow]

Oxbow, do you know that the border to the USA is actually closed illegally according to our NAFTA.

I will not believe for a second that the RCALF challenge is the only thing holding up the border.

Japan is playing politics with the USA, and the USA is playing politics with us.

All this for the sake of following a hysteria theory about BSE which does not even have solid truth behind it.

I'm sure you will blast me for this post too, oxbow. Just the kind of entertainment any of the folks watching from a distance with no CATTLE can enjoy. Producer vs. producer, country vs. country while more and more grassroots people go broke.

The ones to blame in this whole mess, are those that will not look at alternatives to the feed tranmission theory. This is where the destruction began.

[kato]

That's right. Prove to me that it passes in feed. No one has proved it yet. That's a lot of faith to put in an unproven theory. If another plausible theory had been brought forward back when all this started in England, the feed transmission would have been discounted by now. This is the first one they came up with (they were in a hurry, remember), so now it has become 'fact' simply because it's still around. It's hard to base your future on 'science' when the science is all theoretical.

As for the Americans, they are stalling until the election is over, plain and simple. They say they need more time to write the rules so they will not be able to be challenged in court. Nonsense. That's just putting the blame on R-Calf, when the USDA is just as much a part of keeping the border closed. Not to excuse R-Calf, here though, because they are setting themselves up for a rude awakening if/when the States finds a positive.