Price of calves need to double!

[The Don]

A benchmark price may not be the best plan. The Americans would go crazy if there was a supply managed beef industry in Canada.
However what there is now is not sustainable. Looking at the futures prices this will continue. When I look at the reports from Canadian Cattleman's or Manitoba Beef producers they keep saying things aren't so bad. Prices were better than we anticipated so it's all ok. The methods they use for accounting are similar to Donald Trumps creative accounting systems.
Selling cows now @.65/pound (+/-$800) and producing a heifer or buying a bred animal for $2000+ in 2023 a $1200 loss so you can get $250 is not make good business plan. That and carrying on so you can lose $650 a year has very little appeal.
What realistic plan does the Government or Beef Industry Groups have?

[15444]

Most areas of North America have been priced out of cattle production. Guys lied to themselves as to the viability of their operations by using off-farm income to subsidize the on-farm loss. That practice caught up to a lot of guys this year.

It will be worse next year for guys that have a big bank note and only 1/2 the cows to pay for it. Is wifey going to be as understanding when hubby says they have to tighten their belt to pay the farm loan?

There is a big exodus coming. Hoping it's just the older guys and not all the young ones, but the old guys are dropping dead and the young ones are flirting with bankruptcy.

[The Don]

Couple those bills with the inflation and the increasing interest rates. This is not looking good.
Manitoba Government got a pile of cash for the livestock sector from the Federal Government. The programs they are establishing are short term hang on to those cows. These programs do nothing to fix the fact that the cattle market has no correlation with the cost of production for the cow-calf operator. Why hang on to the cows simply to continue losing money. The production insurance programs are a joke. When you are losing $500 a cow a year a possible $40 insurance pay out just doesn't matter.
This is not a problem that has just occurred . The cow-calf operators have bankrolled the industry for a long time.
So... what will change?

[DaneG]

https://www.cattlerange.com/articles/2021/12/betting-the-ranch-and-losing/

This article is about a specific fraud case but it also points out some underlying problems with the cattle/beef industry.

[The Don]

https://www.cattlerange.com/articles/2021/12/betting-the-ranch-and-losing/

This article is about a specific fraud case but it also points out some underlying problems with the cattle/beef industry.

Interesting to read. Thanks

[GDR]

To give a benchmark I used the 2021 Manitoba Department of Agriculture number for 150 cows $1615.75 and rounded down.
Everyone will have a different number for cost of production.
Just a glance at your numbers. You have not included any equipment or facility costs, fuel, transportation... I didn't want to go through a discussion of what the number is or could be so I used a published one.

The other cost I always see that no one ever thinks about is the dead cow, dead calf, or open cow. You still fed that animal for however long with zero return. Whatever that amounts to in lost feed and cow value has to be spread over the remainder of the herd.

And don't any of you tell me it doesn't happen on your farm🤔

[woodland]

The other cost I always see that no one ever thinks about is the dead cow, dead calf, or open cow. You still fed that animal for however long with zero return. Whatever that amounts to in lost feed and cow value has to be spread over the remainder of the herd.

And don't any of you tell me it doesn't happen on your farm🤔

One day I was talking to a old cowboy who calves cows for the neighbour and asked him how calving was going. He said between him, the coyotes, and the ravens they would get said neighbour’s cows calved out…………….

Livestock eventually leads to deadstock 😉

[WiltonRanch]

I don’t know how a guy or gal does it on just cows. The industry hasn’t been stable or really all that profitable for decades. For someone in the chain to make a windfall someone needs to lose. It seems like the scales aren’t tipped in the cow calf direction. We used to background everything to 900# give or take. When barley and oats were near worthless you could value add the grain but that was about it most years. Odd year you’d make a profit over and above if lucky. My dad claims he made lots in the 70’s and 80’s but I sure as hell know he and I never made much after that. You would think if you grow the grain and can get good gains you should have an edge over a feedlot bringing in calves and grain but you get beat on the slide at auction and those wet noses aren’t a lot less than warmed up calves. The industry as it is is a game and a scam. More herds will shrink or disappear and the whole thing will be reduced to magpie meat and a few ornery assholes left hanging on.

[The Don]

I don’t know how a guy or gal does it on just cows. The industry hasn’t been stable or really all that profitable for decades. For someone in the chain to make a windfall someone needs to lose. It seems like the scales aren’t tipped in the cow calf direction. We used to background everything to 900# give or take. When barley and oats were near worthless you could value add the grain but that was about it most years. Odd year you’d make a profit over and above if lucky. My dad claims he made lots in the 70’s and 80’s but I sure as hell know he and I never made much after that. You would think if you grow the grain and can get good gains you should have an edge over a feedlot bringing in calves and grain but you get beat on the slide at auction and those wet noses aren’t a lot less than warmed up calves. The industry as it is is a game and a scam. More herds will shrink or disappear and the whole thing will be reduced to magpie meat and a few ornery assholes left hanging on.

I agree with you.
However if you go to the Can Fax website you can see that they say that the cow-calf producer has been making money all along. 2021 was another profitable year for producers.
I look at their cost of production numbers and shake my head. These are the people in charge of the industry! Clowns with calculators!
A long time ago I was told "Figures don't lie but liars can figure". I do not trust the numbers that Canadian Cattlemen's or the Government uses. I don't know who they talk to to come up with the numbers they use. It is not anyone that I know.
Canadian Cattlemen's and Provincial producer groups talk to Government with this skewed version of the industry and the Government loves it. No Government wants to be seen as increasing the price of food. If they have to starve every cow-calf producer out of business to keep Packer profits up and not appear to be increasing the price of food. Then that's what they will do!
If you are struggling to hang on to the cows expecting a change in pricing due to short supply. Look carefully at the futures pricing. There is no increase priced into the futures that I see.
What event will make a meaningful and real change for cow-calf producers?

[shtferbrains]

Joe Biden says he os going to spend $1Billion
To try encourage some new competion;

As part of the plan, the US Department of Agriculture will provide up to $375 million in grants for independent processing plant projects, $275 million in partnership with lenders to provide loans and other support to businesses to increase access to capital, $100 million for workforce training, $50 million for technical assistance and research and development and $100 million to reduce overtime inspection costs to help smaller processing plants

Large part of the sell is to reduce prices to the consumer as retail beef is up 20% y/y.

Credit to them for admitting the problem and hope it does provide some indication of more competitive bidding for live cattle.

Goverment involvement traditionally makes things worse. Regulation got us to where we are today.

Wonder how much of that money the existing packers will take?