Future Prices

[15444]

The rumour going around the auction mart today was that top quality calves are going to hit $.50 beore the years done. Also being mentioned that the wift coming from the Americans and the other 30 some countries banning us is that this will be a 7 year ban on live cattle. What has everybody else been hearing?

I personally can't see it lasting 7 years. I got cull cows to go next fall and if the ban is still in place, I'll make sure that I have every reporter in Canada and the US watch me pull the trigger and put old bessie down when she could have went to the store shelf! If every other producer did the same I think that the border would open up pretty quick.

[Ron]

I am afraid nothing the producer in CANADA does will influence when the border opens. The usa doesnt give a damn about you shooting your culls and i dont think the canadian government does either. I hope I am wrong

[ivbinconned]

After reading this and some other treads recently I am wondering how many of you have read Bill Leiss's report from last July called "BSE Risk in Canada: Finally, the Penny Drops".
It is a must read!
It may help us guess what the future holds. It is a very revealing document!!
I would like to take a poll. If enough of you have not read this report,I will post it.

[cowman]

Ivebinconned: Haven't read it but would like to.
I doubt calves will hit 50 cents but if they do I guess the banks are going to own a lot of farms! Now lets see, we can take that $300 we get from that calf and buy enough feed for that old cull cow? Of course nothing left over to put deisel in the tractor so we'll need to get out the pitchfork I guess? Don't know where the money will come from for the high priced gas, electricity, insurance, phone etc. Looks a little bleak, I'd say?
My parents were kids in the dirty thirties and they liked to tell about how ugly it was. Never thought it would happen to our generation, but I guess it is. Hope we're tough enough!

[dalek]

I don't think slaughter cattle or bull calves will be banned for too much longer, maybe until spring, but anything that will be over 30 months when eventually slaughtered, like cull cows, dairy cows or heifers or beef replacements, will likely be banned for years at least, probably close to 7.

[ivbinconned]

Cowman it looks like you are the only one who wants to see that report. It is quite long and I didn't want to post it unless there was more interest. I can send it to you as a word document if you would post your e-mail but if you would rather not do that then maybe post you Box no. and postal code, town etc and I will print it and mail it to you by snail mail.
It is a very interesting and revealing read and clears up much of the dust that the politicians kicked up during the first couple of months of this crisis.
Also it might give us some insight as to how quickly the world is going to reopen there borders to our beef.

[ValueChainFX]

The article is very interesting and my response to it is on the following site and included here. Each of you that reads the Agri-Ville threads knows my thoughts already and knows a group of producers is already struggling towards building a system (or maybe better put re-engineers the existing system). I believe future prices are only going to become better if you as a producer gain more control over your selling prices. This means adding value to your product and working with the expertise to deliver your product into the market.

Are there risks? The risks of trying to make a better system for producers are far less than the risks of doing nothing and the hope of things getting better. Either the producer works toward the future of better income or retires or goes broke! For those that may criticism our efforts, methods or activities, I can just say either lead follow or get out of the way! Blunt, but to the point. This group of producers has worked hard and in the interest of Canadian producers from the start, for anyone to be an arm chair critic of someone trying to do something .... shame on you, YOU have a choice to work with this group and add your knowledge or not work with this group. If your choice is to not work with this group keep your criticism constructive or keep it to yourself!

http://www.leiss.ca/chronicles/125

My response to the above paper!

Our agriculture industry has gradually been brought to a point that is unmanageable. We have allowed the system to be dictated to and run by those individuals that are out of touch with our rural principals and ethical morals. We see millions of dollars being spent in the name of agriculture with little or no real direct benefits to the farms and ranches of our country. It is sad to sit in meetings and see the little dictators that are paid day after day and direct you to their friends for expensive reports, studies and plans that meet their personal agendas but don’t address the real issues. Some of these people have been taken from our own agriculture communities and have somehow been transformed into time wasting and money wasting academics.

The agriculture community needs to build a strong working component back into this system and take back the industry. We don’t work for the politicians we own our own business and work for ourselves. Manage our own challenges and somehow need to blend our operations into a complex global market that suffers some of the same challenges we do.

As managers we need to know our strengths and weaknesses and move forward on our strengths and find assistance to help us with our weak points. I suggest that we really need to find ways to build a relationship system that will allow us to build the foundation of the agriculture industry again. Get back to the old principals in a modern world.

[rsomer]

A look at the CME Live Cattle Futures shows yesterdays closing prices Dec. 87.72, Feb. 85.10, April 81.92, June 76.00, August 74.82. This suggests to me that the marketplace sees the present strong prices in the U.S. returning to more normal but still strong prices after February possibly by April, certainly by June as significant volumes of Canadian beef and cattle renter the American marketplace. Everything I have heard and read suggests volumes of Canadian beef and live animals under 30 months of age will be entering the U.S. within that time frame. Even though cows and animals over 30 months will remain banned for some time after that, the movement of live calves to the U.S. will free up Canadian packer capacity for slaughter cows. Slaughter cows will then need to compete price wise with Australian beef to find sufficient Canadian market to consume our domestic product. I have not seen any calculations indicating what price our cows will need to be to displace the Australian product but that price will be what cows and animals over 30 months will be worth after April-June 2004 into the forseeable future.