Price of calves need to double!

[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?

[littledoggie]

And compete the big packers will. Watch for crippling regulation that only the big packers can absorb. Here comes vertical integration for the beef industry.

https://www.canadiancattlemen.ca/daily/biden-unveils-plan-to-boost-competition-in-u-s-meat-industry/?utm_source=GFM+Publications&utm_campaign=eda49c31 46-Canadian+Cattlemen+daily+enews+Jan+04%2C+2022&utm_ medium=email&utm_term=0_2da8244677-eda49c3146-88078981

I don't know how to do the hot link anymore.

[The Don]

And compete the big packers will. Watch for crippling regulation that only the big packers can absorb. Here comes vertical integration for the beef industry.

https://www.canadiancattlemen.ca/daily/biden-unveils-plan-to-boost-competition-in-u-s-meat-industry/?utm_source=GFM+Publications&utm_campaign=eda49c31 46-Canadian+Cattlemen+daily+enews+Jan+04%2C+2022&utm_ medium=email&utm_term=0_2da8244677-eda49c3146-88078981

I don't know how to do the hot link anymore.

I look at that as the opportunity they have been looking for to bring back COOL.
The US Government already provides lots of support to the American Producer.

[WiltonRanch]

I could see the Americans bringing back COOL again but it wouldn’t be as insidious as the government funding producer packing plants or feedlots with stipulation no Canadian origin cattle can go there. Much like the ev credit only applies USA made cars. That’s probably how they’ll do it to us this time.

[littledoggie]

And luckily for us, the same government is here to support us as the one during BSE. (sarc)

[littledoggie]

I look at that as the opportunity they have been looking for to bring back COOL.
The US Government already provides lots of support to the American Producer.[ATTACH]9524[/ATTACH]

Yes, some of the same characters involved as with RCALF. The US has a longer way to go to get to complete vertical integration. I don't think they even have mandatory RFIDs (or whatever technology). Canada is much, much closer. I was told by a top bureaucrat in Ottawa back in early BSE that vertical integration was the goal.

[The Don]

Came in from feeding this morning. -30 C with the wind felt like -40C.
Just thinking that for every 50 cows the money you lose daily would pay for your stay in a place like this... The hardship is you would have to pay for drinks...

[blueversi]

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.

If there’s another big exodus who will be left? In our part of our RM it was probably 90 percent cattle farms, not big operations 50-150 head maybe. Off the top of my head there were 15 separate producers before BSE, then gradually they began to sell off and find something else to do. Right now there’s 2 producers left. Every acre that can grow grain or canola has been converted over. Cattle industry has been toast for quite a few years here.

[The Don]

Carson Callum GM of Manitoba Beef Producers is optimistic for the beef sector according to the last Cattle Country paper I got. I don't see any factual evidence to support this optimism. Feeder cattle October 22 futures price 188.125 I think the 2021 price was around $156.00 That $30 is going for feed increases to the backgrounder. There will be no cash "trickle down" for the cow calf producers. If you fought the good fight and hung on to your cows and some calves the future price doesn't reflect the added costs you are carrying.
The big dollars of cattle support dollars coming from the Federal and Provincial Governments is slow in coming. They have expanded the list of things they will pay for now. Why they didn't just pay it out based on the number of cattle you own is beyond me. I think the cost to administer the program is exceeding the pay out at this time so they had to sweeten the pot.
There has been a steady drop in the number of producers in my neighborhood also. Looking back to 2014-15 the price jumped up (briefly) but if you bought in and expanded in 2016 you got caught. Paying then current prices for breeding stock cost you dearly and there was no money to pay for those animals going forward. The "cattle cycle" is not working. In the US government money has supported the cattle sector. In Canada there has been no such support that's one reason why the Canadian Beef sector has shrunk so much. Selling cattle in 2021 for the same price as in 1990 is not encouraging growth in the industry and it shouldn't. If you can produce a half a cereal crop and sell it you will make way more than feeding that to those cattle.
They are already starting to beat the drum to get fresh blood into the business. When they publish the Cost of Production information they are way out to lunch. When you compare a producer that started in 1960 to that person you want to buy your operation in 2022 it's not going to work. They like to throw a bunch of numbers around using the B to the power of three principle. Bullshit Baffles Brains. I have never been able to make Manitoba Agriculture numbers make sense. They have shown a negative margin for the last number of years but they have understated the actual losses.
Manitoba Beef Producers management keeps saying there are 6300 producers. If you look at the 2016 census data and do some basic math the current number is around 2400 or so (my opinion). That's why the countryside is staring to look real empty of cattle. I can't see the benefit of inflating the producer number.
I keep waiting for reality to rear its ugly head and someone in a position of authority see the light.
I'm not holding my breath.
My cattle numbers have dropped in half this year and they will all be gone next year. I'm not interested in reliving 2016.

[The Don]

I thought I should back up the cattle producer number. This is a screen shot from Stats Canada.


Following this trend / pattern the 2400 number should be revised downward substantially.

[15444]

Fuel, fertilizer, drought, equipment prices and rising interest rates for overleveraged producers are going to be the perfect storm in 2022.

Be a lot of ag producers of all kinds exiting in the next year, not just cattle guys. Unless of course grain prices maintain and cattle increase 50% by fall. Even 50% might not be enough for some guys.