Harlan Hughes

[cowman]

Harlan Hughes says the border will open for young stuff Jan.1 and you should hold them until then. Make lots of money! Sounds about right. However he's not been real reliable in his predictions in the past! I remember once he predicted good prices right around the corner and things went all to hell! Of course he had a lot of reasons why things didn't work out, which was nice of him, but I still got left holding the bag!
Calf prices aren't great but they aren't all that bad right now. What are you going to do? Hold them or ship them?Harlan Hughes is supposed to know, after all his little bio-blurb says he is a "beef expert"! Which kind of gives me that shaky feeling right off the bat!

[smcgrath76]

Interesting comments as I just attended a seminar last night in Lloyd and I know where that date came from. At the session they talked about the developments since May 20th, the new CAISP (Canadian Agricultural Income Stabilization Program - New NISA), and then it was followed up by Tim Highmoor (WBDC) and Harlan Hughes.
The January 1 figure was a date that they used to make some margin predictions for various management scenarios such as marketing calves this fall, backgrounding, etc.
Harlan readily admitted that he did not know if that was the date the border would open to live cattle or not, but he had to pick a date and that was it.
The one suggestion they had was to think about delaying marketings as there is a shortage of feeder cattle in the US and if the border opens, he who owns cattle, does well.
They also stressed that it is important to have a written plan, and visit with your lender and advisor (accountant or otherwise) ahead of time. Also, each producer needs to pencil out their own potential scenarios.
Things to think about included:
income tax implications,
potential payout from CAISP,
potential future prices,
when the border opens.

As with anything it appears to be a risk/reward scenario and producers will need a pretty sharp pencil. They gave some good resources for finding information, computing budgets, etc.

www.wbdc.sk.ca
www.agr.gc.ca (click on the business risk management link to see about CAISP)
www.agr.gov.sk.ca
http://www.agr.gov.sk.ca/docs/livestock/beef/marketing/MarketingOptions.asp (this is a link to their marketing options publication)

All in all, it was a pretty good meeting (did I say that?) if you wanted to listen. Gave a good perspective to some of the penciling we have done and made us think about some things we had missed thinking through properly like the CAISP program.

[cowman]

Yea Sean, rereading the article, Harlan said it was sort of a best guess. With the increased prices in the feeder market I suspect someone knows more than what I do! I suspect we just might see this border open up fairly soon.
I hope I didn't come across as ripping Harlan too bad. I've always been very interested in his articles although I don't agree with him 100%, which is okay we all have to do it the way that works for us.

[smcgrath76]

No worries Cowman. One thing Harlan did say that was fairly humbling but made good sense, was to think about our cow numbers relative to North America.
Canada as a whole has fewer cows than Texas, our looming surplus of 650,000 (give or take - depending on who you believe) is less than one week's kill in the US (750,000 roughly) and our cow surplus is even smaller.
While our problems are huge, it is interesting to put some scale to them.
As well, he mentioned that the aspect of our surplus may be turned against cow/calf players when prices for cattle are negotiated over the fall and into the spring, even though the impact of all those cattle on the North American market should be neglibible.

Interesting anyway.