Price of calves need to double!

[The Don]

Although that article is old 2008 it speaks a truth that Canadian cattle Association has not recognized till this day.
There was an article written recently (in the Producer(?)) the article stated that "according to Can -Fax" cow calf producers have been making good money all along. That there was a $700 profit in 2015.
It stated that the average profit for the last 5 years was $269.00 for a 1200 pound cow / calf and $305.00 for a 1500 pound cow / calf. It was only in this last year where the trend turned negative and the producer will lose $27 for a 1200 pound cow and $43 for the 1500 pound cow. The article stated this was the first time there has been a loss since 2010.
The author of that article (D'arce McMillan) must not own any cattle and is comfortable restating the Can Fax propaganda.
The article gave a price for good quality hay in Alberta as $253 / ton in May. Just a couple of numbers... $253 /2000= .1265 call that 13 cents a pound for hay. That 1500 pound cow will consume 3.5 % of her body weight a day or 52.5 pounds a day 52.5 x .13 = $6.825 / day x 365= $2491.13 to feed that animal. $2491.13 / 600 pound calf = $4.15 a pound. Current sale price for that calf is $225 / hundred. $225 x 6 = $1350 Therefore $2491.13 COG - $1350 Gross Income = ($1141.13) Profit. Yes that's a negative number and where's the $43?
Yes the number is deeply flawed ; you don't feed high quality hay on a year round basis. But this does not consider any other cost to the producer. All prices including income will change... just spit ballin'
Perhaps D'arcy can explain how to get to a $43 dollar loss per head for 2022 calf crop.
Perhaps he could look at the number of producers that have left the business because they have lost a lot of money. I'm not the only producer that sold cattle at a loss in 2021. Those kind of numbers are not considered in the article but they are real.
The statistics from StatsCan (though inaccurate) hold a truth about the dwindling number of producers and profitability. That truth is something Canadian Cattle Association and Can Fax is not talking about. That's my opinion.

[littledoggie]

Are we all just kulaks after all?

https://www.canadiancattlemen.ca/features/show-us-the-money-part-1-what-does-the-producer-share-of-the-retail-beef-dollar-mean/?utm_source=GFM+Publications&utm_campaign=80b20cb842-Canadian+Cattlemen+daily+enews+Aug+17%2C+2022&utm_medium=email&utm_term=0_2da8244677-80b20cb842-88078981&mc_cid=80b20cb842&mc_eid=0f0a8c54de

[The Don]

Just looking at hay prices here. Buying ditch or roadside grass hay for $50 / bale and transporting it 30 miles. That becomes expensive grass with some hardware / plastic. Thinking around .07 to .08/ lb?
Better quality hay landed in the yard around .11 / lb. That's not far off the .13 /lb Alberta price.
Calf prices have not really moved up from last year. If anything they have softened. It appears that the plan is to have the cow calf sector pay for the Canadian Beef Industry again.
I listened to a pod cast University of Nebraska they used $1050 US to feed a cow in Nebraska and south. Using winter wheat and stover grazing supplemented with cheap DDG's and other feed by products. They are lining up on the first cut of hay while I'm still pushing snow in the yard.
Check out Greg Judy feeding cows where he feeds a quarter of a bale a year. His need to wear a lined jacket for a couple of weeks vs a Manitoba winter.
The $1050 US translates to $1312.50 Canadian. So I'm sorta surprised when Canadian Cattle Association shows in their cost of production figures a price to keep a cow in Manitoba at $830 Canadian. Almost $500 less to keep a cow. You are keeping that cow in a place where you have to feed it extra for 227 days a year.
The numbers make no sense to me! I think CCA needs to start over and use some real numbers. I would like to see a proper "budget price" developed , one that a legitimate accounting firm could stand behind and make an opinion. Actual , factual and true. Not the nonsense that they are promoting now.
There is a difference between misinformation and disinformation.
My opinion is the CCA promotes disinformation!
Your thoughts?

[15444]

All the org. big wigs collect a paycheck no matter what happens to the grassroots. Always been that way and always been a large group of suckers that hang on to their every word.

Time is catching up with the industry and BSE ended a lot of transition plans for cattle operations. The generation that came in as young bucks in the 70s are starting to die off and very few places will be kept in cattle as the grain boys keep looking for economy of scale, until of course the government screws them over too, likely with fertilizer reductions and environmental water runoff testing.

[The Don]

The CCA should be able to post, lets say 20 income tax filings to CRA. That will provide evidence to the claims that the average Canadian cow calf producer made the money they claim that we have made over the years.
They can redact names, addresses and personal data for privacy. But they must be able to provide information to back up their statements.
Let that be a challenge to them. They can post it on the web sites for the national and provincial associations.
Show me the money!

[The Don]

Yesterday Tyler Fulton was on CBC Radio the noon show. He said that the prices might go up! As much as 20 or even 30 percent from last year! This year expenses are up 50%.
So... Tyler the price of cattle needs to double!

[The Don]

Think of this as a business case study.
You are operating a business with sales at or below the cost of production.
Your last year was particularly bad. Weather impacts drought and extreme winter and spring weather events impacted both costs and revenue streams in a business negative way.
The net impact is you are carrying forward debt and the current interest rate increases are now adding to the burden.
The resultant costs have a net 50% addition to your expenses.
The market is offering a 20 to 30% rise in prices.
Not a great story and certainly nothing to celebrate.
Consider that your sunk costs will be eaten up in roughly 3 to 5 years.
Is this good money after bad?
Manitoba Beef Producers and Canadian Cattle Association think this is a good business model and are pushing to have this expanded.
They are not looking at the correct statistical model. They keep looking at the Statcan numbers believing they show an increase in the number of producers. Wrong idea.

[WiltonRanch]

Think of this as a business case study.
You are operating a business with sales at or below the cost of production.
Your last year was particularly bad. Weather impacts drought and extreme winter and spring weather events impacted both costs and revenue streams in a business negative way.
The net impact is you are carrying forward debt and the current interest rate increases are now adding to the burden.
The resultant costs have a net 50% addition to your expenses.
The market is offering a 20 to 30% rise in prices.
Not a great story and certainly nothing to celebrate.
Consider that your sunk costs will be eaten up in roughly 3 to 5 years.
Is this good money after bad?
Manitoba Beef Producers and Canadian Cattle Association think this is a good business model and are pushing to have this expanded.
They are not looking at the correct statistical model. They keep looking at the Statcan numbers believing they show an increase in the number of producers. Wrong idea.

Think these industry groups fudge the truth to sustain the industry otherwise the truth torpedos the industry. Cow calf sector has been dying a slow death since 2003. Feedlots have been feeding to weights unprecedented because of less calves. Smaller framed breeds are going out of style. See some Speckle Park herds being sold off cause of this. Beef in the store is high but market signals at the gate don’t encourage to increase production.

[The Don]

From the Merriam - Webster dictionary
"disinformation noun
dis·​in·​for·​ma·​tion | \ (ˌ)dis-ˌin-fər-ˈmā-shən \
Definition of disinformation
: false information deliberately and often covertly spread (as by the planting of rumors) in order to influence public opinion or obscure the truth
Did you know?
Example Sentences
Learn More About disinformation
Did you know?
In 1939, a writer describing Nazi intelligence activities noted, "The mood of national suspicion prevalent during the last decade ... is well illustrated by General Krivitsky's account of the German 'Disinformation Service,' engaged in manufacturing fake military plans for the express purpose of having them stolen by foreign governments." Although the Nazis were accused of using disinformation back in the 1930s, the noun and the practice are most often associated with the Soviet KGB. Many people think "disinformation" is a literal translation of the Russian "dezinformatsiya," which means "misinformation," a term the KGB allegedly used in the 1950s to name a department created to dispense propaganda.

Examples of disinformation in a Sentence
The government used disinformation to gain support for the policy."

Manitoba Department of Agriculture released their 2023 Cost of Production documentation. In my opinion it meets the definition.
In my world the price / cost of everything has gone up. Fuel , crop inputs, repairs and maintenance, feed costs, even interest on operating and capital loans. Everything has gone up.
So how did they manage to pencil out a drop in the cost of production?
I'm getting ready to sell this years calf crop. Prices have apparently improved. There is a huge spread between steers and heifers. That spread really pulls down the average price.
The reality is you don't know the prices until you have the cheque in your hand.
Good luck to us all!

[WiltonRanch]

Sold our steers and a few heifers other day along with some culls. Calves up $200 from last year and culls up as well. Got same money for calves as the culls. Kept a lot of heifers back to breed and culled heavily. Every cow has to bring a cheque.

[The Don]

Where are you located (province)?
What weights?
Steer price?
Steers vs heifers price difference?
Cull cow price per pound?
What do you use as a cost of production (roughly)?
Did you make money on that group of cattle for the year?
You kept heifers for the future, you are optimistic!
I am attempting to eliminate the parasitic draw on my wallet by eliminating the cattle. This year I will have dropped about 1/2 the cattle. Next year the remaining.
Lots of questions. Share as much information as you feel comfortable doing.
Thanks
The Don

[WiltonRanch]

Where are you located (province)?
What weights?
Steer price?
Steers vs heifers price difference?
Cull cow price per pound?
What do you use as a cost of production (roughly)?
Did you make money on that group of cattle for the year?
You kept heifers for the future, you are optimistic!
I am attempting to eliminate the parasitic draw on my wallet by eliminating the cattle. This year I will have dropped about 1/2 the cattle. Next year the remaining.
Lots of questions. Share as much information as you feel comfortable doing.
Thanks
The Don

I’ll pm you

[The Don]

I made time and put a pencil to paper to calculate the cost of production for the 2022 calves. The year of drought had a big impact on feed stuff in my operation.
Cows on average ate a bale a month during the winter feeding period. Average bale cost was $81.43 average consumption was 3.5 % of body weight. That included waste and transportation costs for all feed stuffs.
I fed grass hay, corn stover,3 types of green feed, wheat straw and a 14% ration.
I used a bunch of wheat and oat straw for loose housing. There seemed to be a weather event every couple of days so I went through a lot of straw.
Total cost per cow $1897.75 call that $1900
I got a $270 per cow payment for drought assistance.
That dropped the cost of production to $1630.
But it seems the market is capped at about $1400 - $1500 for a 5 weight steer. Consider the heifer price and the picture looks worse. Those numbers are what the industry posts. You never know what you will actually get paid until you have that cheque in your hand.
Biggest drought in... well forever! Costs have doubled or tripled. Interest rates have tripled. Check out the price of tires for that tractor now, if they are available! The price of cattle is up maybe 10%. WTF
Smallest herd since 1988 and cattle numbers dropping like a rock. Statscan keeps pushing out numbers that make no sense to me and are not supported by observations of the world around me. There are a lot less cattle and producers out there. They keep showing producer and cattle numbers in Manitoba increasing?
The encouragement to keep on in the business is to pay 2 or 300 dollars below the cost of production?
I know a bunch of guys are thinking that my cost of production is way too high. They have trained their cows to eat recycled newsprint and mucilage glue left over from the Sunday school... and gain weight doing so! But my cows don't work that way. I'm making payments on the money I lost last year so that interest rate increase is a real concern. Looks like cattle sales won't pay much of that.
This looked like a time when the beef "industry" would stand behind the original producer and they should have. Instead of helping the cow - calf producer by paying a fair price for the product, they are busy deducting their added cost of transportation and feed from the cow - calf producer. Doing that while pocketing the increased profit from the price of meat in the stores.
$70 / hundred weight for cull cows matches what was paid in 1990. Even if you got a dollar a pound consider the inflation rate. That should be $1.65 / pound.
I haven't heard much from any of the groups that get paid to represent the "Producer".
The price of calves needed to double!

[DaneG]

MBP district meetings are happening with elections in odd numbered districts, might be time to get elected and make a difference while getting paid for your time.

[The Don]

I'm in an even number district. Unfortunately.