Whats happening here?

[cowman]

The other day I stopped in at my local vet clinic to get some stuff. Anyway got talking to the vet and he told me that at the local auction they were expecting 1200 head for the next cow sale! He also said the last couple of sales before New Years were large!
Now I went to a few sales earlier in the year and the numbers were not large at all, so how come this sudden desire to sell cows? I just don't get it...wouldn't you think that now would be the time to keep cows, not sell them? Grain and hay are a complete joke and about the only thing paying today is the cow/calf business? What does the farmer do with his hay/pasture? Does he rip it up so he can lose money growing grain? Does he think he can make money on a red hot grasser market this spring?
This fall lots of small calves sold for big money. Those calves will hit the grass market for even bigger money? Is that the market these cow dispersal guys are looking to get into?
Is this situation just a local thing confined to my area or is it happening in other places?

[rkaiser]

What's the big surprise cowman, I beleive that you predicted this as much as any of us. A lot of guys have simply had enough. The fear of uncertainty or the chance of something else like BSEconomics happening again is an obvious driving force.

Don't worry though, the big money ranches will simply get bigger, the land will be used and the cow numbers (in My mind) will continue to grow.
We are following the chicken, pork, and hog business in a strange sort of way.

[rkaiser]

cow sales in the local auction market have had the largest numbers in history. A lot of the cattle coming in are from other areas of the province, some local buyers but a lot of them are going to Sask. according to one of the market owners.

[Horse]

I think there are a lot of cow men that would disagree that they are making money but what do you think most said that when the price improved they were getting out .What suorises me is the price of breds I sure wouldnt be gambling on that kind of money . Around here there is 1 or 2 large outfits trying to get bigger but there are lots that have gone to work and are caught with cows now that they cant sell because of taxes.
Then there is the age thing and I understand the high market was during the BSE thing and the price is headed down?
I feel the only thing keeping prices this high is the off farm income and a need for a place to hide it.

[BFW]

Horse, when you say "hide off-farm income" I assume you mean defer the income tax on this off-farm income. Only farming income can be deferred by purchasing cattle. Off farm income is invested as tax paid dollars.

[JD6320]

Every year you have a certain percentage of producers exiting the industry-retiring/other interests etc.For the last 3 years you couldn't afford to exit,and now that better prices have returned it time to bail out.

[cowman]

Well I guess that is what is happening although I can't see many positives in doing much else with land?
Randy: I suspect you are right about following the chicken/pork thing? The small guys are leaving and the big guys are expanding. Not sure if this industry can really justify expansion? Don't think the returns are enough to justify the debt investment...but hey somebody is buying those cows!
I get around a fair bit and in the last couple of years there has been a lot of small(and not so small) cattle herds disappear. Lots of empty pastures this year.

[kato]

We decided this year to sell our heifers that would have been replacements, and buy bred cows instead. This doesn't explain the big selling, but might explain some of the buying. Others may be doing the same thing.

Mind you we got good bred cows in early December for less than 600 each. It seemed to make more sense to sell those heifers for more than the cows cost us, and have a calf a year sooner.

[blackjack]

...kato...i agree with you...there had never been a better time to buy top quality cows since 94 and 95... than the past two years...even though most kept their older culls because of bse i sold them and replaced them with a new set of young cows...the margin difference was about the same compared to when culls were worth something...

[cowman]

I don't know what the price of bred cows is like right now but at the local sales around here they were in that $700 to $800 for decent cows. A few young quality type cows sold for more than that and bred heifers were up to $1200, but mostly $1000 to $1100.
I would suspect there is money to be made on these cows as the day the border opens to cows the price will go up considerably?
We decided to not buy anymore cows but to breed more heifers. Maybe not the smartest decision but as I told the boy, every snaky sucker we have seemed to come from someplace else! He bought 40 head privately last year but they were from one herd dispersal and he paid $900 for them...they are a pretty decent bunch, maybe a little small(Red Angus).