feeder cattle

[grassfarmer]

I'm aware of the concept of the cattle cycle in N America but haven't seen the reality yet. Does the price the consumer pays for beef drop during a downside cattle cycle? I'm guessing not - in which case we are once again seeing more value theft from the production chain by processors,
wholesalers and retailers. Perhaps this should fuel our ambition to retain control of our cattle through to the consumers plate?

[kpb]

grassfarmer, you are quite correct in that, generally, the prices in the store do not fall much, if at all, at the bottom of the cycle. And you are also correct in your conclusion regarding more money taken out of the pockets of ranchers.

But I can assure you from personal experience that the bottom of the cycle is brutal. When I said $450 for a steer in the fall I wasn't kidding--I've been there and I think we're going there again. The irony is that the cycle is predictable and easy to read--when producers see high calf prices they keep back their heifers for breeding which results in fewer short-term calves for sale and, hence, higher prices. But as more and more heifers are kept for breeding, eventually there are more and more calves which results in prices dropping. As calf prices drop, producers sell all their heifer calves and keep none back for breeding in an effort to keep their overall incomes up. So more calves flood the market and prices drop even more. Eventually there are fewer heifers bred and, hence, fewer calves and the cycle turns.

It's a well defined and historic cycle and I think when you look at the North American herd we are well on our way through the heifer retention phase and into the beginning of the flood the market with calves phase. Just my thoughts but it sure looks like it to me.

PureCountry, thanks for your gracious welcome. One of my neighbours dispersed his entire herd a month ago and the other told me last night that he was having a dispersal of his herd in December (700 breds). I guess I'm just about the last cattleman left in my neck of the woods and I'm starting to feel like a bit of a dinosaur. Maybe I should just sell my breds too and turn the land into acreages for all those city folks with cash burning a hole in their pockets.

kpb

[cowman]

Well I hope you are wrong kpb, but I suspect you might be right!
I know around here a lot of smaller and mid sized herds have disappeared. Now those darned cows are going somewhere and probably with a lien from the bank attached to their butt! If the calf market sours those "expanders" might not be able to pay the bank?
Now if I listen to my local auctioneer there is a pentup demand for cows south of the border as well as feeder cattle, which might keep markets up one more year...if they get the darned border open for cows?
But quite frankly long term it doesn't look all that rosy in my opinion. We have too many cows up here. The death of the CROW and the government refusing to fight the grain wars ensured that? Poor government policy got us into this over supply situation. I don't buy the story the federal government couldn't afford to support the grain business...not with all the billions and billions wasted over the years on goofy policy and outright corruption! So now today the chickens come home to roost and we are paying for it?
I do believe if anyone wants to stay in the cow/calf business they need to get mean and lean and get their debt under control or paid off!

[cowman]

One other thing kpb: Regarding farmers son? Don't know what happened to him. Maybe he was so discouraged when his hero,Paul Martin, lost the election, that he just can't bare to face the music?
On the other hand I think he mentioned he joined up with the reserves so maybe he is over in Afhganistan argueing those old Taliban boys to death! Maybe after having to go a few rounds with him they will see the evil of their ways and all join up with the Liberal party or something?

[cowman]

food4U: Just wondering, now that you are "officially out of the cattle business" what do you intend to do with your hay and pasture?

[blackjack]

...cowman...with the bse tax at the border(i wonder if cargill and tyson have the basis problems with the boxed beef) and our lack of finding new export markets is definitely going to add to the pressures on our own markets...

...kpb...heck i'm only in my mid forties and i hate the thought having to work for some one else other than tyson and cargill... and also why would i want to take advantage now of high land prices when maybe in 20 years they might be in the tank...lol

[blackjack]

...one other thing ...grassfarmer does bring up a great point...with our cheaper cull cows did the retail prices ever get reflected in lower retail prices...we raise our own beef to eat so at times not up to the reality of what the consumer is paying for theirs...

[Horse]

Talked to a couple of feeders today and 1 feeds about 50,000 so he probably knows something but this basis can get you 8 cents /# but they tell me they rip you on the age aparently cargil has thier own mouth guy anyway ! load of fats had a 28% regect due to OTM and a good amount of those were age verified so I guess there is no wining The other fellow lost $5000 on 1 load of fats Kind of reminds me when I used to ship fats to Gainers and would get 25/30% dark cutters or a carcas weight 1# over the limit and get docked .
It forced me to quit finishing calves and by the sound of it, it will finish some more small feeders.
By the way I asked the large feeder if these cattle will make money and he said a resounding NO.

[kato]

A cattle buyer friend of ours got tired of always having a couple of head taken as OTM when he knew fully well that they weren't, so he solved his problem himself.

He started sticking a couple of OTM fats in each load. Cargill was happy that they could dock him, and he was happy that they left the UTM's alone! LOL

[rkaiser]

Hey kpb, have I got a deal for you. I'm looking for some grass. Instead of guaranteeing yourself a loss on grass cattle, why not give me a couple hundred bucks and I'll haul over a couple loads of little hairy critters to keep the fire hazard down.

Great thread guys.Betcha ten bucks we'll all be back here in 5 years saying the same things though. This gang will never give up!!!!!!!

[kpb]

rkaiser, thanks for the offer but unless you've got 4 or 500 of those little hairy guys and are prepared to move up to our northern ranch near Lac La Biche for the summer to ride herd I'm gonna have to turn you down and take my chances this summer in the market. The way the feeders are coming down, things might work out ok anyways this spring.

I think you're a straight-up person so this doesn't apply but we've had some problems in the past when we have rented pasture that have made us very reluctant to do it again.

I agree with you that we are definitely hard-timers on this site and could very well be discussing the same stuff in five years. We just can't give up the cattle habit I guess.

kpb

[cowman]

I'm not real "strategic" in any of my cattle dealings. I basically follow a pattern year in year out and I try not to obsess too much over it?
Sell the big steer calves in the fall right in that late Nov. early Dec. when the tax money comes to town. Cut out what I think I want for replacement heifers and feed them fairly decent in early January. Tough the other heifers and scrubbies through til spring making sure I have a small feed bill in them. Send them to grass and sell them late August or in September.
I looked like a genius last year...don't know about this year?
Now maybe I should have sent them all down the road last fall, but then that causes tax problems? And I've never enjoyed taking 10-20 cents a pound less for a heifer than a steer? It is always amazing when those grass heifers come off grass at 850-900 how suddenly the feedlots become feminist liberated! Or for that matter how that calf with the frozen ears is suddenly okay and doesn't need a $150 discount? I believe the most costly cut on a calf isn't filet mignon but plain old ears! Why they must be worth a couple of hundred dollars a pound at least? Must be a delicacy in Japan or something?
When you get screwed a few times you soon get the picture?
I can remember back in the early nineties, when I thought I knew everything there was to know, striving to get $780 average on every animal that left the farm...and came pretty close to it? Those big fall steer calves pulled everything else up and in reality after you took off the winter feed bill and pasture the others struggled to keep up there end of the bargain! Took some creative book work sometimes to convince myself I wasn't just feeding them for fun! And actually cull cows came pretty close to holding up there part of the bargain?
Now considering that $780 was my goal in 1992...what would be a reasonable expectation today? Well 14 years at 2.5% inflation is 35%? so I guess I should be shooting for $1053?...somehow I don't think that is going to happen?
Despite the fact nobody is making any money the market pundits still say the market is rosy and cattle prices are high! Personally I just don't see it?