The new reality?

[cowman]

Ben Thorlakson(sp?) was on the Rutherford show yesterday explaining the realities of the "new" beef business as we now know it. I was in and out of the truck so I missed some of it but the general gist of the matter is what we see now is about as good as it gets!
He further went on to explain that the packers were not making excessive profits at all and in fact were paying more than they were at pre-madcow levels! It all has to do with the high Canadian dollar you see? In fact he said the cow/calf guy was actually making slightly more for his feeder than he was pre-madcow! Well that surprized me no end...and here I thought we were going through a disaster! Instead it appears we are doing better than ever. Why that 79 cents we're now getting for 800 lb. steers is much better than the $1.12 we were getting in early 2003.
I sure am glad Ben explained this. Here I thought I was working for nothing? I wonder if Ben could be encouraged to run for Premier?

[smokey]

I couldn't beleive what I was hearing yesterday! Ben, telling the Rutherford listeners,that when factoring in the exchange rate,we are actually better off this year! Really? Maybe Ben could come and talk to my banker and convince him that everything is ok.
Unbelievable!

[rsomer]

Early May 2003 direct fat steer prices were $1.06 and 700# feeder prices in Ponoka were about $1.18.
Yesterdays direct fat steer prices were $.86 and 700# feeder steer prices in Ponoka this week were about $.72.
D1-D2 cows are trading for an average of $.25 now, before May 20 they were $.55
Canadian dollar was trading for $.7317 the week of May 20, 2003. Yesterday the dollar was $.7592.
The following table may not display properly but has the calculations:

20-May Exchge InUS$ Mar/04 Exchge InUS$
Slaughter Strs. $1.06 0.7317 $0.78 $0.86 0.7592 $0.65
Feeder Steers $1.18 0.7317 $0.86 $0.72 0.7592 $0.55
Slaughter Cow $0.55 0.7317 $0.40 $0.25 0.7592 $0.19

In $US steers are trading for 16% less than May 20. Feeder steers have really been hit trading for 37% less than May 20 even though feed prices have dropped dramatically during the same time. Cows are the worst bringing 53% less in adjusted $US this week than slightly over a year ago.

This reinforces my opinion that the cow calf guy, especially the one that retained ownership of his calves is being hurt the hardest by BSE right now. The feeder/fat spread is way too wide and anyone who has to sell feeder steers into this market is going to feel the full effects of BSE in the markeplace with no promise of compensation from government.

[gwf]

If you fellows are saying that the Cow- Calf Producer is going to continue to feel the financial effects of the BSE long after the Feedlot and Packer are back to near normal. Then I would say you are starting to get the picture.

[kato]

Only way out of that is to finish them at home. Right now it looks a lot more promising than dumping them.

In a few weeks we'll know better what the market will do regarding the U.S. border.

It's too soon to write things off, in my opinion. The most consistent thing that has happened in the last year is that "the last thing you would expect" is exactly what happens. I think we are due for one of those things to be in our favour.

[blackjack]

Kato ;If we fatten our feeders at home, which packer could we sell to?