Where's the prosperity?

[blackjack]

...does the fat price in August not normally lower before going back up in the fall...while fat prices are usually at their highest in Feb and Mar...just wondering if that as something to do with the prices...

[farmers_son]

While there is a seasonality of prices for live cattle, what I am looking at is the basis or difference between what the U.S. producer is receiving for their fat steers and what the Canadian producer is receiving for their fat steers. It could be assumed that a narrow basis or small difference would indicate a more normally functioning market while a wide basis or greater difference is taken as a non functioning market, especially since the packers are selling our beef at near American prices and American beef comes into Canada and sells in our retail coolers.

This last Wednesday the Canadian producer was getting paid $200 less per fat calf than his American counterpart even though the border was supposedly “open”.

According to the Western Producer at least some of the live cattle that did cross into the United States were already owned by Americans. The actual number of cattle that have crossed into the U.S. will not be known for a couple of weeks when the U.S. publishes that information. Cattleman2 suggest the number is 7000, Canadian media talk about 5200. Either way it is a token amount. When the Canadian slaughter numbers come out for this week we will likely see Canadian Grade A slaughter numbers between 55,000 and 60,000 head, interestingly enough that is down from 65,000 a year ago even with our much talked about increased slaughter capacity. If those animals had been slaughtered on the U.S. side of the border they would have been worth collectively at least $6,000,000 more or put another way the markets are still not functioning normally. We cannot even pretend to believe that supply and demand are working to fairly distribute profits to the actual producer of the calf.

[blackjack]

...f_s...another good post...in reading your post I wonder if the feedlot guys are sizing up their options...according to Canfax most feedlots seem to be current with their supply...I will add since I background and sell yearlings in the summer market...I feel a whole lot better about the market than I did at this time last year...saying that I agree the system needs an overhaul...cannot imagine the packers wanting to give up the margins they have had for the last two years...

[cowman]

I might suggest ...wait awhile? Do you think...BAM.... the market opens and things are back to normal?
It takes awhile? The basic system can now,FINALLY, begin to function? Yep it will probably take a few months, but that's just how it is?
They'll get this crap solved and things will be back to normal?
We are in the process of getting things back to how they used to be and whether you think that is right or not, it will happen?
Yes, we will move back into a system that screws us...so what else is new?
Get used to it...that is just a fact of life...no one ever said it was going to be a rose garden?
No matter what, the world is one hell of a lot better place, for the producer, than pre- July 13th?

[farmers_son]

Spoken like a man who doesn't have any cattle to sell for at least a couple of months.

If you have pens of fat cattle ready for sale you might not be so patient to wait for the "market to adjust".

I think the Canadian producer has borne the cost of BSE long enough. Especially now that the U.S. is finding BSE cows behind every fence post. There is really no excuse for prices to remain lower on one side of the border than the other any longer.

[cowman]

Well actually I do have 30 yearlings to sell and the boy has thirty. And if I can average in that $900 range I'll be satisfied and actually make a few bucks.
The number of cattle crossing the line right now isn't exactly a flood? But I would assume when they arrive at the US packing plant they are getting the US price, so as the numbers pick up and the supply starts to shorten up here then the Canadian packers will have to up the price? I would suggest that takes time?
I believe Lakeside has also re-entered the cow market thus taking away more kill spaces for fat cattle?
Hopefully the USDA will, in the very near future, get their act together and scrap the more stupid rules about branding, preg checks etc. and also get that border open to cows? There is absolutely no reason for the border being closed to cows after the US has found 3 BSE cases...the same number as Canada? In fact if they have being playing a straight game they should have found 30 cases because their cow herd is ten times as large as ours?