feeder cattle

[cowman]

Went to the auction yesterday and it sure was a mixed bag! The steers from 500 lb. to 650 seemed to be not too bad but anything over that was fairly ugly price wise?
They really beat up the heifers unless they were breeding quality and weight. Very few heifers(750 and over) broke the $800 mark.
Saw some good black steers(593 lb.) sell for $1.40...$830. To compare about the top 820 lb. black steers were $.9850 or $805.65! Weird.
Very green cattle brought the top prices. Obviously headed for grass. There were very few green cattle.
Anyway, being fairly sociable I shot the breeze through most of the sale so didn't get all the prices wrote down. One guy I was talking too was pretty glum. He sold seventy steers(840 lb. average) and he never got back what he paid for them in early November! He wasn't what I would call a happy camper!
He told me he had bought them because he had too much darned silage for his cows but now wishes he'd dumped it in a coulee or something!
Kind of a sad story.
I started to wonder if any of those cattle made any money...and if any one buying them would make any money?
Apparently there is a good demand for grass cattle and the auctioneer kept saying buy them now boys as these grass cattle are going to get hot! Is that true? Do you think we'll see a hot price for grassers? Personally I don't see it...but I've been wrong before!
This same guy asked me what I was doing with my yearlings...selling them or grassing them? I told him I figured I hadn't lost enough money on them yet and my stratedgy seemed to be always sell at a loss! Not that I want that, just that it seems to usually work out that way! LOL

[blackjack]

...looks like kgb was right on the mark... i wonder if he is hiring him self out as a consultant...lol...he may be better than anne...

[smcgrath76]

We sold calves yesterday and things were diverse price wise. Very few packages of calves to be had. Singles were bid low, and packages of good calves went well.
Cows went 40-45 to lakeside and 30-35 to XL.
Green cattle went well, and good heavy calves brought reasonable bids. Most calves over 850 were bid under $1.
The frustration getting our age verification data in paid off though. Announced age verified cattle appeared to gain about 3 cents over the others.

[grassfarmer]

The trade seems to be mirroring last years time wise. We sold calves a week later this year (Feb 14 vs Feb 7th)and missed the peak by a week this time. Cull cows have picked up since March 1st as they did last year. Luckily we kept over some tail end culls this time and are getting 37-39 cents just now when the good ones only made 26-28 cents last October - December.
I see canfax breakeven price for feeders placed between mid Jan and mid February is $93.56/cwt. Hedgeable future on the Chicago exchange for these June fat cattle is $88.92/cwt

[food4u]

We sold our calves at S.L.S. in Saskatoon on Mar.7---steers averaged 750lbs@1.10 and heifers averaged 600lbs@ 1.07. These were red angus calves.Sold the cows last fall and kept the calves to use up the left over feed and we are now out of the cattle business offficially.

[cowman]

Well I have high hopes I'll do all right grassing these calves. Sometimes it works, sometimes it doesn't! We have too much grass right now for the cows we have and are not ready to take the plunge into more cows until this darned border stuff gets better!
However we are hoping to breed about 25 heifers, but then we also need to skid some old girls this fall.

[cowman]

One other thing: My cousin, who rents the bit of grainland we have sold what he had left of his share the last few days. It was decent barley but a bit tough at 16% going into the bin. He had fed quite a bit at a custom lot but sold the calves mid Feb.(and said he did alright but never mentioned any numbers). I opted to keep my share although have fed nothing so far and don't really intend to this year. Am a wee bit concerned about the moisture and am taking a sample today to make sure it won't get hot. We will then move it to another grain bin.

[cowman]

blackjack: You are sure right about kpb hitting the nail on the head...also JerryK predicted feeding calves was a loser! Nothing like experience?
Personally I liked kpbs posts? He brought a good perspective to the discussion(In other words he agreed with me a lot!) and gave us some insights on feeding cattle. And finally he was pretty practical in his politics unlike some of the old left leaning boys we tend to get on here...not mentioning any names..Horse and wilagro? LOL

[smcgrath76]

Hindsight investing incorporated...
Just thinking a person might have been better off to sell the calves in February or before, and buy grass calves going forward as the market weakens.
Don't know though. I guess time will tell. This damn dollar is killing those selling cattle at the moment, but it should help on the flip side when buying cattle. I struggle to see the loonie going down a whole bunch in relation to the US dollar over the next 6 months to a year. I think some of the discussion currently going on regarding airstrikes in Iran will further boost us in comparison to the greenback.

[cowman]

Sean: not real sure when you say when this grass market weakens? So far if you fed calves lean and mean you are probably ahead of the game? I do realize fat prices today should indicate a downward pressure on feeder cattle, no matter what, but the fact is there could still be a good demand for grass cattle in the next couple of months? I don't know about your area but there has been a sharp reduction in cows around here...and hey that grass is sitting there empty...with a tax bill waiting down the road?
I suspect the grass market will be good...come hell or high water?
Not sure about this whole dollar thing, as it is beyond my capability to commprehend? It is about the goofiest component of the equation in my estimation? Frankly I just don't get it and I sure as hell don't understand it? I will leave that for you young guys who seem to understand it!
These are very unsettled times in the cattle business and personally I am kind of out to sea on a lot of this?
It is funny? I was actually talking to my custom cattle feeding guy this morning...and he tells me it has been a great winter! He said he was full all year and he made one hell of a lot of money! He made the decision in the fall not to feed any of his own cattle but to just do the whole thing custom! He said he could have fed 5 times more cattle than he did if he had the room! (4400 head).

[kpb]

cowman and blackjack, thanks for your kind words. Although I have stopped posting I do still enjoy reading the threads frequently and chuckling at the give and take.

I'm happy that we didn't buy any backgrounders for the first time in a long time but I will likely buy grassers in a couple of months. I don't think we'll make money on them but I've got lots of rough pasture in excess of what I need for the cows and what else can I do with it?

cowman, since our calves are priced off the U.S. market, an increase in the value of our dollar verses the U.S. dollar means it costs more for a U.S. buyer to buy our calves, thereby making them worth less. U.S. buyers will only pay in Canada what the U.S. market, less the basis, allows them to pay so, in effect, a rising Cdn. dollar means they will pay less in Canadian dollars for our calves (if they have $500 U.S. to spend then that is $602 Cdn at a Cdn dollar conversion rate of .83 but only $555 at a .90 cent Cdn dollar).

finally, fellows, for what it's worth, I think we are in for lower calf prices this fall than last fall and lower again in 2007. I think we missed the top of the market during the BSE chaos and won't see top-of-the-cycle prices again for about 10 years. I remember getting $450 for my steer calves several years ago at the bottom of the cycle. I think we'll see that again in four or five years. Yes, there's lots of cows being sold here but the overall North American herd is still too big.

I'm not gloomy by nature, god knows, since I've been in this business a long time (I must be a dreamer or deluded) but I'm afraid BSE has robbed us of our best calf-selling time and we are now on the downslope of the cattle cycle. I think we're in for very rough times in the next five years and I suspect that the full-timers like myself and blackjack are going to be up against it.

lastly, whatever happened to farmers_son?

kpb

[PureCountry]

I'm hearing the same predictions at every meeting I go to kpb. We're on the down hill side now. And from my own experience, I think feeders/backgrounders like yourselves are usually the ones have the toughest challenge staying on the roller-coaster. Good luck to you. Good to see you post again.

[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!