Deja Vous Anyone

[CattleAnnie]

"Well, the rally didn't last very long, fat cattle are $3.00 lower this week already and this has backed the big feeder cattle off a full $4.00 in the 800 to 1100 pounds steers and heifers.

In the 700 weight steer and heifer trade that market is also feeling the pressure of about the same amount. In the grass calf trade that market is close to 8 - 10 cents lower especially in the lighter 350 to 500 pound range."
-Wayne McNary of Clyde Auction Mart

Gee, sounds pretty familiar doesn't it...can you name that tune? I think it's the "Drop the bid by the amount of the announced government aid per animal" Song!

What a totally crooked little world it is out there. When is the government going to wake up to these so called
"coincidental" drops in market price?!?!

I guess just write another damn letter to the MLA, MP, Minister of Ag, and Prime Minister...fat lot of good that's done Mr. Joe Average so far.

[frustrated1]

Right on CattleAnnie, but be careful not to complain on this site or you will be branded a whiner; or as our outspoken right wing talk show hosts would comment, NDP. I like to think that most cattle ranchers are progressive individuals who believe in the free market system and not the monopoly driven anarchy that has been running free in our industry the last year (political preference aside).
Yes the market drop is influenced by the government announcement just as the big one last summer.What do we do? Smile and thank everyone, and surely don't say anything that would bring out the virtual wisdom of johnnyboy555.

[frustrated1]

Although thankful for the effort, you could see this coming. Think I'd mentioned in another topic about the fertilizer rebates a few years back, price went up exactly what the rebate was worth. Mail the cheque straight to where it's going and just keep me out of it. Saves on the public perception I ended up with some cash.

Think our illustrious commentator must have had his knuckles wrapped, can't feature him avoiding some of these topics.

[grassfarmer]

On the figures being quoted above it looks like the Packers are only taking in the region of $40-50 of the compo. - are they following the Government lead of only taking 70% initially until the see how numbers pan out? Either way I don't doubt they will take it all eventually.

[kato]

How be we just hold on to the calves a little while longer? Until the border opens.

OOps... pardon me... then they will drop the price by the R-Calf countervail duty, and we'll get screwed again.

How can we not be the biggest bunch of cynics on the planet? Lord knows, we've got plenty of reasons to be.

[max]

I hate to seem like I'm on the side of the feedlots,or packers, but I'm curious if anyone knows if the volume of cattle being sold were up from previous weeks. If so, possible simple economics of supply and demand. It would be nice to know before asumming that the c/c guy is getting screwed.

[max]

Beleive it or not max, this issue like all the rest is not about taking sides.Unless you want to consider the American owned packers vs. the cattle producers, feedlot, cow/calf and all other sectors. Some feedlots have obviously taken the side of the packers, as they are their only hope for product sales. That is not to say that they are wrong, only trying to survive.
Only the very desperate feeders will fully support the packers in their woeful story about not making any money either. A very prominent feedlot owner/operator in central Alberta told us last weekend at a very public meeting that Excel foods (Cargil) has shown more of a profit at their High River plant than all of their American plants combined in the last year.
As far as I am personally concerned, all of the cattle producers in Canada are getting screwed by a Packing industry that is making their own rules. I don't believe that regulation is the answer either and will say that the only way out is an open border and more competition. OR Reduce our dependence on these big players who could give a rats ass if your feedlot, or your cow/calf operation, or your purebred herd even exist.

[cowman]

Believe it or not I think Max might be right. The price had been getting to the point where people were starting to bring the cattle to town? Seems to me the numbers were starting to rise before Speller announced his program?
A lot of people are scraping the bottom of the feed barrel and when the price started to rise they pulled the trigger. And don't forget once Speller set the date at Dec. 31 they were assured the $80 and didn't have to speculate that they had to own them to get the subsidy? That would be a further incentive to move them?

[rsomer]

Max: Volumes of slaughter cattle were about the same as previous weeks at about 70,000 Canada wide. Slaughter levels have been around the 70,000 level since mid February.
According to The Boxed Beef Report supplies of beef were manageable. See http://www.canfax.ca/cbbr/pdf/cbbr040322.pdf
The reason seems to be that the Canadian packers are pricing Canadian beef to their American counterparts at a discount. The packers are spreading the huge profits they are enjoying across both sides of the border to justify lowering the price for slaughter cattle in Canada. For example, Cargill only partially processes its beef in High River. It is then shipped to a Cargill plant in the U.S. to be further processed. By valuing the Canadian beef at a discounted price when it crosses the border Cargill can spilt the profits between its Canadian division and the Cargill owned Excel plant in Washington.

Last week finished steers averaged 87.32 in Alberta and 81.88 in Ontario. Finished heifers averaged 87.90 in Alberta and 81.44 in Ontario.
Prices closed this week between $50 and $60 lower than the week before. It is pointless to look to supply/demand factors to explain fluctuations in a non-functioning market.

[cowman]

Well rsomer I was talking about feeder cattle. It seems to me if more feeder cattle are coming into the mart then the price would drop? That was what I was saying is probably supply/demand driven?

[rsomer]

I am still not sure that the cattle markets are functioning normally yet and supply/demand is the reason for our market prices. That said the price drop we saw last week could be due to normal market forces. U.S. CME live cattle and feeder futures dropped last week the equivalent of CAN$26 a head. Alberta prices dropped about $50-$60 a head. That could be a normal market reaction in these circumstances. There certainly was no evidence that the feedlots were passing the $56 they expect to receive from Paul Martin’s announcement down the supply chain yet.
Yes, I would think there were more feeder calves sold last week than in previous weeks. The only numbers I have found were LIS inspections for February 04 which say that there were 120,000 feeder calves sold in February 04 as compared to 205,000 in February 03, a difference of 85,000 head that either don’t exist or are still on the farm. I am not sure that so many calves sold last week that they overwhelmed the market.
There still seems to be feedlot buyers for the calves but the feedlots are penciling in a hefty profit. I would think that as expectations of the border opening increase that the U.S. market is going to influence our feeder prices more and more.

[cowman]

I won't comment further than to state that I am amazed how well you seem to have a very good grasp on the situation! You are a very valuable asset to Agri-ville...rsomer!

[rsomer]

Thanks for the kind words.

[kato]

I would have thought that the feeders who had good inventories on Dec 23 would have been more likely to buy cattle this week, knowing there was more money coming. Price drop made little sense.

I think they went down in the States this week, too, but there is talk of feed prices driving some of that.

Could it be that the feeder market is starting to react to news from down south because the feeders believe we may soon be part of that market again soon?

It'll be interesting to see what happens this week.

[rsomer]

I found a good graph of Alberta 800-900# feeder prices over the past years.

See:http://www1.agric.gov.ab.ca/$department/newslett.nsf/all/agrp4830?OpenDocument