Price of calves need to double!

[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.

[The Don]

Waiting now for the next weather event. It's supposed to be a doosey!
Looking at the things I would have liked to fix / replace that would have made things better and safer to operate a cow-calf enterprise. No money to do any of that.
Has anyone else noticed that the drought is the only thing acknowledged for the herd reduction? Any of the information sources that I watch have focused on the drought. No one mentions the fact that a lot of cow-calf operators haven't made enough money to have the necessary reserve to survive the drought and down market.
I hope everybody stays safe!

[DaneG]

If this storm is as forecasted it will be a calf killer! If you have good facilities and shelters it may help. About 10 years ago we had a bad storm end of April lots of calves lost and even old crock cows, some guys cut the cows and calves loose in the bush for shelter they fared better than most herds in corrals.

[The Don]

So they had one job to do...
The feds gave Manitoba Agriculture 93 million dollars to distribute to drought affected producers in Manitoba. Manitoba government added 62 million to the pot. Which sounded good 155 million available! Then came the implementation phase and things went south.
So by 23 March 2022 they had only managed to distribute 32.16 million to 2508 claimants. That's only 20.7% of the total amount provided. The time that the cow-calf producer needed the money was last late last summer and last fall. Not next year.
So what went wrong? My opinion is they have been using flawed data for so long they believe their own numbers. They have made it all about getting the absolute minimum amount of money into the hands of the base producer. So little in fact that they still have 80 % of the funds still in the bank. When I say they I mean the Manitoba Government and their advisors Manitoba Beef Producers (the organization).
The only option cow-calf producers have is to go out of the business. They are offering $250 / head one time payment for herd expansion. You will lose $800 / head at current prices per year going forward. Not much incentive in my opinion.
The numbers are dropping in a big way now. What the lack of money doesn't eliminate Mother Nature is taking care of.
I'm going back out to the swamp that I have for pens to see if I can get the tractor stuck again. I'm grumpy!

[15444]

Well the tally keeps growing around here as to who is out this fall. So far 3 cow/calf guys are out and I would not doubt maybe a 4th. And this is just within a few miles of my operation. Talking with a friend, neither of us doubt at least 1/4 of the cow/calf guys are gone this fall. Especially with decent cull prices and pathetic calf/yearling prices. Death losses through the roof this spring, especially with pneumonia.

And it's a mix of young guys with their neck out too far and old guys who are just completely wore out.

Was hoping to sell fancy breds this fall for a premium, but looks like market could very well be flooded with breds.

[The Don]

So we are supposed to be thrilled with the 70 to 90 cents a pound they are paying for cull cows.
Here is a picture from the archives.

[The Don]

If you do the math on that 1990 dollars current value is listed @$2.24. So 71.75 / hundred weight is equivalent to $160.72 /hundred weight.
That's not counting the recent crazy inflation cycle.
Those cull cows that have been selling for $45 to $60 dollars with $6.00 to $7.00 a pound hamburger is making the Packers a lot of money.
At the expense of the cow calf producers.

[littledoggie]

At the expense of the cow calf producers.

I'm sorry to tell you that this is nothing new. During BSE the packers and feedlots got the bulk of the subsidies with the thought that it would 'trickle down'. Without us, the actual PRODUCERS of a product that the rest of the chain needs, they have nothing. And it looks like nothing is what they are going to get if things keep going the way they have been. We are price takers, pure and simple. Cattle Commissions are gone (well, I guess there is still the Stockgrowers, but they seem to be more about holding onto their free grass) replaced by Beef Producers. As a cow/calf producer, I produce cattle, not beef.

[The Don]

As a cow calf producer you are given only 2 options as I see it.
1) Sell your product at a loss.
2) Exit the market.
The dairy industry has announced an increase to cover costs to the base producer.
The Beef industry has announced that they will deduct the added costs of feed and transportation from the base producer. That base producer, who is already paying for the additional costs to his operation, is now expected to pay the costs for the backgrounders and feeders.
There is a point where even with the expected loss of your sunk costs you need to close / exit the business.
Add this years expected losses to the previous accumulated losses I certainly can't afford to be in the cow calf business.
They have already started to "beat the drum" to get fresh blood into the business. Canadian Cattlemen's (et al) propaganda spin down plays the cost of production. If you check out their numbers it's cheaper to keep a cow in Canada than south of I-70 in the USA. I'm going to call Bullshit on that.

[WiltonRanch]

As a cow calf producer you are given only 2 options as I see it.
1) Sell your product at a loss.
2) Exit the market.
The dairy industry has announced an increase to cover costs to the base producer.
The Beef industry has announced that they will deduct the added costs of feed and transportation from the base producer. That base producer, who is already paying for the additional costs to his operation, is now expected to pay the costs for the backgrounders and feeders.
There is a point where even with the expected loss of your sunk costs you need to close / exit the business.
Add this years expected losses to the previous accumulated losses I certainly can't afford to be in the cow calf business.
They have already started to "beat the drum" to get fresh blood into the business. Canadian Cattlemen's (et al) propaganda spin down plays the cost of production. If you check out their numbers it's cheaper to keep a cow in Canada than south of I-70 in the USA. I'm going to call Bullshit on that.

Well if you run your operation like the contributors to cattlemen magazine you should make nothing but money like they tell you. Cows can graze through 3 feet of snow and live on hope and prayers.

[The Don]

Saskatchewan Stock Growers wants the Government (s) to review the pricing practices in the beef industry.
What set of numbers do you think they will use? If they use the usual propaganda numbers they are screwed. If they start to use "real facts" and "actual numbers" they may have to do some explaining.
The US Packing Groups are shipping record amounts of beef into Canada. Allowing the Canadian Processors the ability to further manipulate the markets to their advantage. They have been doing this for a long time.
Canadian Cattleman's Association, now Canadian Cattle Association has known and supported that situation for all that time.
So what is driving SSGA to request a review?

[shtferbrains]

They sized assets from the Russian oligarchs no problem. Happened quick

What would you call the owners of the Canadian packing industry?
Always more studies.
Always just gets worse for the cow calf guy.

[The Don]

https://www.nfu.ca/wp-content/uploads/2018/05/LivestockreportFINAL.pdf

Something interesting to read for the long weekend.