New money rumour

[cowman]

Oh and further the first post should have read " I sold my calves in late November"! I guess I'm a little stressed!
Does anyone else ever have days like this????

[countryguy]

Welcome to my world Cowman.

[rsomer]

The feedlots cannot have it both ways. On the one hand they say the $1Billion went to the packers. On the other hand they say they took the multi-million dollar government cheque they received and turned around and paid the cow calf sector $200 more for weaned calves then they were worth. I think both statements are misleading. I have been told the packers were buying the fall calves anyway so I am not sure I need to thank the feedlots for last falls calf prices.

I can understand why the feedlots are more than a little embarrassed by all the money they have received and want to look like the good guys. But the fact is $1Billion of government BSE support was split between 130 multi million dollar mega feedlot operators and two American packers and any one of them would not hesitate to take that money and buy American calves if they got the chance. So much for supporting the Canadian cow calf producer.

If anyone believes that giving money to one sector such as feedlots trickles down to the cow calf level then they would have no problem believing that the portion of the $1Billion that went to the packers trickled down to the feeders. Personally I don’t think so on both counts.

What really happened is last fall the Canadian fat market had improved as Canadian boneless beef was moving into the U.S. at record levels. As well the fall market was looking towards the border opening to live cattle early in the New Year. U.S. fat prices were at outrageous levels and investors saw incredible profits to be made buying Canadian calves and selling them later into the U.S. No one was doing anyone else any favours.

The best way to get money into the hands of the cow calf producer is to pay it directly to the cow calf producer not to the feedlots. The money is needed now not later.

[grassfarmer]

I was disapointed to read the ACC daily email update today that we should all keep quiet about packer profiteering. The fact that they have tripled their margins at producers expense is OK, we are further warned not to tell consumers that by buying our beef they are not in fact helping the ranchers/feedlots all that much as the money is going into packers back pockets.... BS!! I for one think it is outrageous that the packer sector has been doing this and I think most consumers would be interested to find out the truth. Perhaps with ACC/ ABP showing such great leadership and committment to their industry we should reward them by putting them out to pasture (or sending them to work for their masters - the packers?). It looks to me like the NFU is a better informed organisation as to what is going on here.

[johnboy555]

rsomer......stop and think a little first of all the packers did not get that billion but they did get 40 to 60% of it and yes some of it came back to the feeder market. As a matter of fact, i sold IBP 1000 lb strs. for 1100 dollars.......thank you much...........i went right back into the feeder market with that money. Had that money not been there, well you figure it out.

As far as Rick Pascal goes. I will say it one more time, now pay attention.......1600 lb steer x .30 = 480 dollars plus govt. funds of 400 = 880 equals shortfall of somewhere about 500 dollars. All this to anyone that understands money is that most if not all of your working capitol has vanished. Try to get a new loan with out working capitol. Do the math rsomererere. I don't like big feedlots myself but by george this will hurt the whole industry. The feedlots don't look like the good guys. They look like the broke guys.

[blackjack]

Last fall ABP and CCA did a good snow job on us all . Cow-calf and the feedlots.I wonder where Arno disappeared to? It`s funny he hasn`t popped up to say border opening soon!

[rusty1]

pandiana - you wanted to know more about where and how the aid package went to the packers. It's simple - they feed a huge pile of cattle them selves. I believe Lakeside (IBP-Tyson foods) has a standing capacity of 75,000 head. Cargil feeds and is connected to Western, and feed at alot of other feedlots. so you can guess whose cattle were slaughtered first after the aid package came out. It was so bad that they actually sold themselves short and with the hope we had last fall the jumped into the market big time and estimates have it that they owned up to 70% of the yearlings on feed. That's controll.

[frustrated1]

In hindsight, the guys who sold thier calves last fall did better than those still feeding them. Some of us still feeding normally background a few anyways. Had any of us known, we all would have sold last fall. BUT, any calves purchased last fall were bought on spec, same as any purchased today. They were not bought at the price they were with the intentions of helping the poor cow calf guy down the road, they were bought to make a buck! Period! The fact the guy sold his calves in Nov instead of Jan was a timing issue, nothing else. And certainly not from the generosity of the feedlot, so lets quit harping on this extra $200 "given" to the calf guy. Especially since mine are still on my silage and grain. Yes, you guys took your $1100steer and reinvested it in calves you may lose money on. But you did this to make another buck, same as you always do, not to be the wonderful helping hand to your neighbour. I've got calves on feed too and really, it's like Bre-X, until it's sold or priced, you've lost nothing.

[kato]

That's why we still have our calves too. Until they are sold, no money has been lost. Once they are gone, well that's it. Better luck next time.

If we had listened to our banker, we would have sold ours three weeks ago for about 50 cents. He said he ran the numbers, and they weren't worth feeding.

As of yesterday, those steers are worth about $250 dollars more. (900 lb at .79 instead of .50 with good potential for better than that.) That's $25000.00 that would have been lost in three weeks. (Or gained by the lucky guy who bought them) Not a bad return, over a three week period.

Love my banker? NOT!
Take advice from him? NOT!

The really sad thing is that a lot of guys took that advice. It'll be another year before they have another chance to generate some revenue to help make up the losses. It's going to be a long long year.

[kato]

I say frustrated hit the nail on the head. Everyone is just trying to get the best money he can whether it be speculating or selling at an opportune time. No passing along good fortune.

Banks advice to sell is going to get them their money, no rebate for your losses, no interest break etc. etc.

I can't quite figure out the stand of the ABP and CCA. What do they hope to gain?

[k-way]

johnboy555 must be a feedlot guy, since he's so determined to make them look like angels, giving up their profits and going in the hole for our benefit. I get that they were profiteering because the opportunity was there, just like everyone else in the chain would have given the chance. But he seems to forget that the feedlot guys may lose their businesses if this stays bad, but the cow/calf guys will lose their homes and everything else with the loss of their farms. Corporate bankruptcy is a lot more owner-friendly than the personal bankruptcy that a lot of us may end up with.

[kato]

It costs money to raise the original calf to weaning.

It costs money to get from weaning to slaughter.

When there is not enough value in the finished product to cover both costs..someone needs to go. It is usually the middleman.

Fact of life.

Feedlots enjoy the economy of scale with feed costs/overhead and marketing ability. They do however have other costs that are eliminated when the cattle stay on the original farm. These would be setbacks from feed changes, illness from stress, higher death loss, and higher drug costs.

What I am getting at is that the feelots cannot live without the cow calf guys, but the cow calf guys CAN live without the feedlots. Doesn't mean they all want to, but they can do it if they have to.

[rsomer]

I agree, however I would add that the 33 mega feedlots that control 58% of the Alberta feeding industry can live without the Canadian cow calf guy if they can access U.S. feeders year round. These feeders were able to live without Alberta barley in 2002 by bringing in U.S. corn infested with fusarium and they could live without Alberta calves if they needed to by bringing in U.S. feeders infested with anaplasmosis. So I would not expect the feedlots to be lobbying for money for the cow calf sector.
It is up to the cow calf sector to present their own case for BSE support to government. According to an article in the February 26 issue of Western Producer a year ago feedlots were paying producers more than $800 for a 650 pound feeder steer. Today that figure is $422.50. Last year, packers paid feedlots $1,380 for a fed steer, today only $960. Obviously both sectors of the beef industry have been greatly impacted by BSE but the feedlot sector has received government aid. The primary producer has not. Our need is as great as the feedlots need and that needs to be communicated to government.

[pandiana]

A very good summary, rsomer.

[kato]

I found a receipt from last spring when I was working on the income tax. We sold 980 pound steers for $1.18 a pound.

AHHH...the good old days.

What we really need right now is a properly functioning market free of politics and hysteria. If we had that, we could get back to the business of raising the best beef in the world.