What's the racket with cows?

[grassfarmer]

Can anybody tell me what's happening in the cull cow world? I saw a bit of the sale in Ponoka today and these cows are a lot dearer - D3 and 4 cows 31-36 cents today compared to 12-22 cents last week.(off their market report and a slight exageration perhaps) I saw a reasonably fat holstein make 42 cents today. What is the reason behind it? Ed Paul was buying a few for the Salmon Arm plant and I understand a lot are going east to Ontario or Quebec. But where is the beef going? are we displacing imported meat just now or is supply of culls just seasonally low? Given there is no prospect of cow beef going anywhere legally anytime soon I'm baffled at this sudden strength in the market.
Baby calves are on the rise too - plenty of little holsteins $45-85 with the odd good beef bred steer bringing close to $300 - scary money for a foster calf.

[rkaiser]

Just a bit of my opinion grassfarmer. Heard lately that the lines have slowed a bit at Cargil and Tyson due to the first tight supply of fat cattle we have seen in Canada in two years. Boxed beef trade is still hoppin for those multi boys, so lots of the current kill is still heading south.

BIC has spent a load of producer money convincing retailers to promote and make some innovative products out of cow beef. Maybe the first time this money is paying back a bit for producers if cow prices continue this trend.

Anyway. Cow kill capacity is up, UTM is moving south in a box, and more retailers, restaurant and counter, are moving cow beef.

Time and patience will move us out of this mess and on to a very bright future for the industry in Canada. Harvest capacity would certainly speed this up, as prospects for offshore markets are looking more and more lucrative every day.

[blackjack]

...gosh darn it anyway...sold my culls a couple of weeks ago...didn't figure the price would move much because of the yanks otm rules... anyway good to see the price is headed in the right direction...

[farmers_son]

Boys...surely you don't believe the prices we have been receiving for cows has anything to do with market fundamentals.

If the price of cows is 10 cents higher than a couple of weeks ago all that means is the packers were paying 10 cents less then than they are now. They could have paid 10 cents more before but they chose not to.

Certainly looks like it may be some time before live cows can go south so until such time as that happens or until Canada builds sufficient slaughter capacity I think it is an excercise in futility to try and apply supply and demand fundamentals to what will still be a non functioning market.

The simple truth is we still do not have a functioning marketplace for any cattle, much less cows. The price of cows is what it is because that is where the price has been fixed.

[blackjack]

farmers_son... with the bullcrap us ranchers have been goin through these past two years...I welcome any increase as somewhat positive...

[dalek]

Gencor Foods in Kitchener have had to start lining up fed cattle for slaughter because they can't get enough culls to keep the line fed with people holding for the border. Also there are rumours that Levinoff is moving to Ontario and building a cull plant in the Guelph/Kitchener/Waterloo area.

[Cattleman]

We are in a non-functional market farmers_son, but there must be some short term affect (supply or demand) in order for the price to jump. Buyers didn't suddenly just feel like giving 10 cents away on every pound!! It could be speculations, but it still would be created by some demand driven incentives.

[greybeard]

With those prices I expect supply will quickly fill demand.
My neighbor across the field from me told me last week he could only pay me about 40 cents rail. If he paid more than that he might as well just buy it in boxes.
After looking over his new Harley, I noticed he had just changed his price for lean ground from $2.29 to $2.49.
Now,I don't begrudge him the new bike,as he works too much.Longer hours than most anyone I know. But don't feed me bullsi about any more than 40 cents being to much.
Bottom line is,he realy wasn't interest in talking about cull cows, as he was well supplied at 40 cents.

[grassguy]

Heard of a load of cows sold to XL going for 50 cents on the rail earlier this week. We're moving the right direction anyway.

[tojo]

Just got the local paper delivered and saw where the R-calf boys have been successful (on the short term, I hope).
Headline "Gates Shut Again - no cows get out Monday". Wayne Easter doesn't seem at all pleased with the decision. Hopefully he's mad enough to get the message to Washington or are they madder/and more stubborn because of Canada not going along with the missle defence scheme? What do you think this will this do to the recent price increase of culls?

[farmers_son]

Cattleman: You may well be right. However when we consider the packer’s captive supplies the notion of supply and demand driving live prices becomes harder to accept. When I see price increases of 10 cents per pound almost overnight I tend to think something other than changes in supply or demand would be behind it. Could be driven by trying to squeeze a competitor…

We have only to remember how the packers dropped the price of fats on the same day as the Federal Government announced the first BSE support program in 2003 so that the packers could capture the government subsidy for themselves. That had nothing to do with supply or demand. Also, prices increased when the packers were under government scrutiny for price fixing.