Set Aside

[freenorth]

Has anyone figured out exactly when the set aside program will benefit the producer?
1. The tags aren't available
2. Tag numbers must be on the form prior to submitting for payment.
3. Fall run is just around the corner, and people need to know which way to go as far as their calves are concerned.

Unless there is a major shift in the prices, the way I see it, the $200 now is going to be lost at the other end when the calves are marketted as long yearlings, or prior to that if they are sold while still on the program.
Any thoughts ???

[kato]

I think the run has started here. Brandon had 2800 head in a pre-sort sale yesterday. With 600 lb calves in the dollar range, I wonder how many will take the $200?

All along I have had the feeling that the government was thinking that if they stalled long enough they wouldn't have to help. I'm not ready to change my mind on that one yet, either.

The packing plant support is the part they'd better not weasel out on as far as I am concerned.

[15444]

The producer is guaranteed the program cash on 40% of his calves. Now based on what is noted on the Alberta Agriculture website, the producer could sell all of his calves and then buy the 40% needed at a later date.

In essence, one could sell his calves right now while the prices are even remotely decent, and then buy the percentage of calves he needs at a later date when the real rush happens, feedlots fill up and the price starts dropping like crazy.

Sell your calves at today's prices. Buy young and small calves later in the fall and automatically add $200 against what you paid for them. Heck, if you watch the prices at the mart later in the fall, the $200.00 might just cover the purchase of a good 4-5 weight calf!

The program really works well for guys that are fall calving, and even better for the guys that are split between both fall and summer like me.

My plan is to take the alloted 40% allowed and tag as many of the fall calves as I can and let the spring calves go. No point in tagging the spring calves as they would be docked this fall and (even if I wintered them) there will be alot of happy feedlots and grass operations in the spring when those spring '04 yearlings hit the market with those lovely program tags in there ears. Talk about cheap beef!

Frankly, its a good program, but if producers don't watch how they market their calves, the feedlot guy will be there this fall and next spring to drop the price down and pick up that extra value that we are to be given.

Even those who are going to custom feed their calves to slaughter will be hit with this dockage when they send their fats to the packer.

This is economic war and those who fight with a certain strategy will still be standing a year from now.

[CattleAnnie]

What I don't understand about the set aside plan is this:
How does with holding my 500 & 600 weights from market this fall help ease the bottleneck of slaughter capacity?

Because that's the reasoning Gord at the CCA gave me for the (at the time proposed) hold back plan.

Take care.

[grassfarmer]

I wouldn't be to quick to dismiss the program because steers are a buck a pound just now. Was $ /lb a good enough price last fall? I know I sold around $1.12 in December and wasn't too pleased with that. Since then we have had the big slump in February and a lot of talk of calves being 40 cents this fall. If you believe the figures that the likes of Alberta Ag comes up with cow calf producers need about $1.15 to $1.25 to break even!
Personally, I had already decided to make the move to retaining ownership of a good proportion of my calves. Feeding them myself until March then getting them into a custom lot. The scheme comes along and offers $200 a head to retain them until next fall - that can be manipulated to get me $200 extra on 40%. Sure it's a gamble the packers may drop fat prices next fall and take some of that but it's worth the risk in my mind. All I'm saying is although everybodies circumstances are different be sure that $1/lb on steers and 85c/lb on heifers is enough if you sell this fall - it's a long time until next falls payday.
As far as the scheme goes tags won't be available October 1st. Through the NFU we are lobbying that you can start the year retention period on October 1st if you place an eartag order by that date. This doesn't comprimise the program in any way as a simple phone call from the Ag department to the tag supplier can prove if an order was place - it's not our problem the tags aren't ready.
The question of whether 40% is the compulsory amount you need to claim if participating has reared it's ugly head again. I think it's just poor wording in the rules but Alberta Ag update yesterday read as if you must claim 40%. Again we are clarifying this with the Government ASAP. I don't know if ABP/CCA have though of these issues - certainly not showing up on CCA daily updates. And they were the ones that proposed and negotiated this scheme.

[greybeard]

I also have been leaning toward retaining my calves longer. I seem to be able to accumulate the feed to background them with little additional capital investment and it looks like a good way to build equity in the future. If supply / demand even out I will have inventory to take advantage. I have no equipment for grain (that’s the way I like it) and can’t gross enough selling calves for $5-$600
to live the lifestyle I have become accustomed to. I hope to get calves to $800 in order to make a living without much hired help looking after cows. It looks like less work to get the extra 50 to 70K out of the calves I have than have a 100 more cows.

[grassfarmer]

This scheme gets more complicated the more you look at it. I just listened to the Alberta Ag official on "Call of the Land" yesterday explaining the scheme. According to him you "MUST claim 40% of your calved cow number" to qualify "no more, no less" This will have a huge affect on the scheme - claiming your small number of heifer replacements won't be possible.
Saying that they contradict themselves by saying the minimum payout per applicant is $200 (or one animal) but if 1 animal is 40% of your herd it means you must have calved out 2.5 cows this year....hmmm difficult unless you actually were half way through calving her on New Years eve at 12pm!
He also indicated that the scheme starts October 1st with you not being eligable to sell calves before Oct 1st 2005. "There is no rush to send in forms with the tag numbers" So it seems it is not a condition that you need to keep them for 365 days after the form goes in? You could tag and claim in December and still be able to sell October 1st next year?

[cowman]

When I was hauling yearlings in to Burnt Lake Auction yesterday there sure was a whole lot of bawling going on so I guess the calves are starting to move?
I asked the manager what he thought about the 40% set aside and he told me it is a typical government SNAFU, but that the way to go would be to move the big steer calves and hold the heifers and tailenders for awhile. Leave them on the cows and be prepared to feed them cheap for the winter. He "suspects" this thing is going to get sorted out in the new year and then he says it will be "Katie bar the door" as our prices are going to really rock and roll! He was very upbeat for 2005!
Kinda of nice to talk to someone who is upbeat about our industry, for a change?

[pandiana]

Easy enough to be upbeat, cowman, if you don't own a whack of cows (or, you are an American).

[grassfarmer]

A neighbour sold calves this week - Feb calves out of 17-1800lb tan cows that were fed for 8 1/2 months last winter.Steers were $1 a lb. Heifer calves were in the upper 80s but still only grossed between $420 and $520. This was the better end of his calves too. I don't know if they will pay his bills or not. Everybody is talking about good calf prices - good relative to what? - the wild speculation that calves might only be worth 40 cents this fall?

[15444]

Exactly grassfarmer. I know a guy that has very nice straightbred Limo calves every fall and has to sell them at any price because he just doesn't have the area or feed to carry them over. He told me that if calves even went for as low as 20 cents this fall, they would go. He only buys feed for the cows and only if he is short by quite a bit.

Now with that kind of thinking, it sure wouldn't take much to drop poor calves down in the teens and top calves into the high 20's-low 30's if the buyers know that people HAVE to get rid of their calves at any price?

No, prices aren't in the 1.25-1.40 range for 5-weight calves anymore. People have to wake up and realize that it ain't going to jump back up there this fall and bit the bullet? I have a few high 4-weight and low 5-weight steers (Herefords) to sell next weekend. If I can get above 0.95/lb., I will probably wear the biggest smile I have had all year.