Price of calves need to double!

[bucket]

28 quarters of pasture listed around here for 5 million+

I can't pencil it out to make sense of something that struggled to adequately handle a 250 cow calf operation.

The guy just did a major reduction to keep the base herd. Now its going to be retirement.

[blackjack]

What percentage is lease land bucket….is there potential for grain farming….that is 5 to 6 quarters worth here in the Red Deer area.Land is a hot commodity makes no sense one would think production wise.

[The Don]

I don't know where that land is and what it's worth. The one thing I can say is that the cattle won't pay for that.

[shtferbrains]

What percentage is lease land bucket….is there potential for grain farming….that is 5 to 6 quarters worth here in the Red Deer area.Land is a hot commodity makes no sense one would think production wise.

Wouldn't 6 quarters at Red Deer run more than 250 cows?

[blackjack]

Normal conditions right on the bubble if one was going to cover winter feed and summer pasture needs…summers like the last one no…our operation runs cows on marginal land in summer while the good producing land for winter feed and some cash crop….but Don is right in saying it doesn’t make much sense to ranch at current feeder prices….

[The Don]

It sounds like a lot of money. When you put a pencil to paper 28 quarters (4,480 acres) for $5million is around $1,100 / acre. That sounds like someone's lifetime of work to acquire that block of land. Hopefully they can get paid a reasonable return for their hard work.
How the next generation of cattle producer will pay for that is a real good off farm job and a desire to throw money away. Or...?

There was an article in the Western Producer where MBP top brass were restating how optimistic they were! Assuring producers that the prices were going to increase this year. Maybe as much as a dollar a pound! But feed prices need to come down for that to happen.
Wow! If I add a dollar to what I got paid last year I could get to around $1500 for a 5 weight calf. That's still a hundred dollars below the projected cost of production. Put that together with the money lost and interest I'm paying for carrying last years losses and I get right back to where the price needs to double.
Fertilizer price tripled. Herbicide tripled. Fuel prices are up in a big way. Grain prices are up and staying up (so forget the feeder's grain prices dropping). Interest rates are going up.
The idea that a dollar increase is a big deal is ridiculous.
Prices for the cow calf sector need to double!

[15444]

Talking to neighbor last night asking when he was going to ship his steers. 7-weights. Couple potloads. Winnipeg telling him they figure $1500 average on them. Realizing he just fed his own feed plus extra he bought for basically nothing. Would have been further off selling in fall and selling the feed.

Myself I'm planning on grassing the yearlings. Might sell the fall calves in spring as it looks like those 6 weights will be hot commodity in late April for grass guys.

At the price of all inputs, the days of $2.00 calves is over. $3.00 will have to become the norm or the exodus of producers will be massive in the next couple of years.

[The Don]

Yes the prices need to go up for the cow calf producers. Three dollars a pound may not be enough.
Just spit balling numbers. Those 7 weight animals probably cost a bunch of cash to get through the winter.
$1615 to get to 500 pounds and then around $550 to get them from October to March. Total cost roughly $2165. Getting paid $1500 translates to a $665 a head loss. The feed they put into those animals generated a negative value. I chose to loose my money in the fall in an effort to save myself a lot of labour and money (buying feed to help someone else make money). I did that (holding the calves over) last year and didn't want to repeat that mistake.
That story does not bring me any happiness. Somebody did a lot of work and invested a bunch of money to produce those calves. Then they got screwed over.
Looking at the futures numbers they don't support any better prices than what that example shows. So I'm less optimistic than the guys that run MBP. They get all excited about a $50 dollar price increase when you are losing $500. Price insurance for $2.30 a pound on a product that cost you $3.05 to produce is nothing to be happy about.
The cattle herd has shrunk according to statscan. They show that 1 January 2022 the beef cows on cow calf operations were 363,300 I think their number is way too optimistic I think the real number is probably 330,000 and it will drop to less than 300,000 this summer. ( that's a 10 % difference in the number) Last summer they thought there were 401,700 beef cows on Manitoba cow calf operations. The recent posting showed a corrected (different) number of 372,700 (that 29,000 head difference is +/- 10%) .
In February USDA said Canada imported 1300 tonnes of (US Government subsidized) beef. That's a lot of cattle.
Who do you call to complain?
Call them now!

[The Don]

I had to buy fuel... $1.51 / liter I ordered 500 gallons $3428.00 Current price of cows I need to sell 5 cows to pay for enough fuel to get me to grass time.
I need to buy some more feed probably $8000.00 should get me to grass I need to sell off 11 cows for that.
I can drop one bull and 20 cows that should get me to the expensive time of year.
I'll be out of cattle by the end of seeding time as this goes along. Save me a bunch of money for next year!

[15444]

I had to buy fuel... $1.51 / liter I ordered 500 gallons $3428.00 Current price of cows I need to sell 5 cows to pay for enough fuel to get me to grass time.
I need to buy some more feed probably $8000.00 should get me to grass I need to sell off 11 cows for that.
I can drop one bull and 20 cows that should get me to the expensive time of year.
I'll be out of cattle by the end of seeding time as this goes along. Save me a bunch of money for next year!

Last fuel buy was a week ago at $1.91 for coloured, supposed to go up to $2.15 on next delivery. Bought one extra load of 38 rounds for $8012.00. Freight portion was $4400 a load and going up more in future. Bought 10 ton fertilizer to do fields that were missed last year. $1105/tonne, up 68% from last year. Would be a hard sell on any of it if I didn't have cash to pay for it.

I know a lot of older guys are calling it quits and scaling back this year. Just heard that one neighbor quietly liquidated 1/2 his cows over winter, he wasn't buying any extra feed. He's 65 and can't get son to help anymore as son has had enough marital issues and bank debt to pay off, he doesn't need hassle of cows after clocking out of day job.

Another neighbor just listed all his equipment for sale. No prior notice, nothing. General thinking is that family is in tight spot finance wise and needs to raise cash quickly. Already sold the loader tractor that he uses to clear snow out of the house yard with...that really got his next door neighbor wondering what was going on.

[The Don]

I screwed up a download of statscan's site information regarding cattle numbers... I'll try again later to post that.
Cattle numbers are dropping and the number of producers is dropping in synchronization (as one would expect). It doesn't seem to be a great concern for the folks at Canadian Cattleman's Canfax group. Spokesman Brian Perillat was thinking that the liquidation was "not as bad as some have feared" He said in a recent article that the current cull rate at 13% was in line with recent years cull rates. Looking at the cows on farms in Manitoba they have dropped 76700 or 18.83% from 2018 to 2022. I guess that a +/- 20 % drop in cows is no biggie in the eyes of the Canadian Cattleman's organization. Why do these guys qualify for national check-off funding? Especially with that kind of attitude! There is a story of a lot of hurt and personal sacrifice in those dropping numbers.
I think the "big drop" is going to happen this year. In my opinion the number of both cows and calves will drop significantly this year. The combination of poor / limited (but expensive) feed and a harsh winter will show up in the form of a reduced calf crop and a bunch of culled cows.
But. Don't expect an increase in prices paid for those calves and cows. The most recent increase in grain prices made the feeders drop the price paid for feeder cattle by a matching amount. Again a double hit for the cow calf guys. That has to stop.
What year was it they expected a "wall of calves" (so they didn't pay a good price for calves)? That "wall" that never arrived! Maybe it was the first item in the "supply chain disruption problem"!

[15444]

I screwed up a download of statscan's site information regarding cattle numbers... I'll try again later to post that.
Cattle numbers are dropping and the number of producers is dropping in synchronization (as one would expect). It doesn't seem to be a great concern for the folks at Canadian Cattleman's Canfax group. Spokesman Brian Perillat was thinking that the liquidation was "not as bad as some have feared" He said in a recent article that the current cull rate at 13% was in line with recent years cull rates. Looking at the cows on farms in Manitoba they have dropped 76700 or 18.83% from 2018 to 2022. I guess that a +/- 20 % drop in cows is no biggie in the eyes of the Canadian Cattleman's organization. Why do these guys qualify for national check-off funding? Especially with that kind of attitude! There is a story of a lot of hurt and personal sacrifice in those dropping numbers.
I think the "big drop" is going to happen this year. In my opinion the number of both cows and calves will drop significantly this year. The combination of poor / limited (but expensive) feed and a harsh winter will show up in the form of a reduced calf crop and a bunch of culled cows.
But. Don't expect an increase in prices paid for those calves and cows. The most recent increase in grain prices made the feeders drop the price paid for feeder cattle by a matching amount. Again a double hit for the cow calf guys. That has to stop.
What year was it they expected a "wall of calves" (so they didn't pay a good price for calves)? That "wall" that never arrived! Maybe it was the first item in the "supply chain disruption problem"!

What I am hearing more and more approaching spring is, if kill cows of all types can hit the dollar mark this year and stay, you won't see the doors for all the people clammering to get out this summer/fall.

Guys are telling me, "there is a life outside of cows..". I personally disagree, but I was pretty much born in a barn, so I'm a little biased.

The industry is based around guys who love their momma cows and calves and wanted to die doing it; problem is they are getting ancient and doing just that.

Next generation views it as a business and when the numbers don't work anymore, cows and machinery go. No tears shed. Lease out the land and bring in the croppers. Cash the rent cheque and go on scenic vacations.

We are now at a point where were are starting to lose both segments and the sector contracts massively.