seeding it down to grass?

[cowman]

There was an article in the last Western Producer about how many grain farmers have got tired of getting screwed and are looking at just seeding the land down to grass and getting into cattle? Now personally I hope this doesn't happen because I believe we have enough darned cows in this country already and a big increase would just glut the market?
I can just imagine how happy a group like R-CALF would be if we increased our cow herd in a big way?
Now to give this article its due, they did point out that farmers considering this move should realize that it isn't all milk and honey and there are more costs than stringing a couple of strands of wire and turning them into the new grass!
But personally I can't fault any grain farmer who goes for it? It is very obvious that the federal government isn't going to support them and the chem/fertilizer/equipment companies are going to continue to screw them?
But I sure wish they wouldn't! I'm not all that keen on seeing calves worth 80 cents?

[smcgrath76]

I would plan for 80 cents anyway.
Saw a good discussion on the weekend regarding knowledge as the new capital in agriculture and who has it and who doesn't.
Pretty scary stuff, but the reality is Cargill knows a lot more about the Canadian beef industry and our products than the people producing it do. Therefore they are not forced to pay for it.
He who controls the knowledge, controls the profits.

[cowman]

Well I don't know about planning for 80 cent calves? I think my planning might go something like this: Load up all cows. Haul to auction mart. Sell them at whatever price was available. Turn all land into a park or recreational area. Buy motorhome and move to Arizona!
Trying to think when was the last time calves were 80 cents? Think it must have been in about 1980? I think my Dad bought a brand new tractor(120 hp all the bells and whistles) that year for $31,000? I know I bought a new Oldsmobile in 1982 for $7200....Don't think 80 cents will cut it today...might just have to let Cargill and you super duper low costers have the cow/calf business! Don't think I want to work for nothing.

[Horse]

Cowman you said the same thing last yr Cows are gone wont work for nothing , is it mabey the cows help out the income tax situation.

[cowman]

Well Horse calves weren't 80 cents? I mean come on 80 cents? Would you raise cows that produced 80 cent calves?
600 lb. calf at 80 cents...$480 dollars?
Check the grazing posts on here...basically $1/day? Now I don't understand some of the voodoo economics some people put up but I would suggest $1/day for every day of the year would be realistic? Or $365 just to feed that cow?
The general consensus here is breeding costs around $30/cow? Salt and mineral around $10? Keeping the fences and corrals up another $10? Maybe some utilities at $10? Vet costs at least $10? How about some deprciation on your cow or replacement costs...they don't live forever? How about a little interest on your investment?
Bottom line is $480 really doesn't even get the costs paid never mind your time, labor or horror of horrors...a profit!
Now having said that: Despite a very tough situation the last 4 years I have never been able to write off any farm losses against other income...for one simple reason...our farm always turned a profit! Not as much as I might like but still a profit!
I'm not sure if the cows are really paying their way or not? If I charged them a bill on what I should be getting in return for this land...then definitely not! But as handy lawn mowers that keep it looking neat and tidy...then they probably are doing okay? And as my favorite hobby...well how do you put a price on that?

[kpb]

cowman, I'm pretty sure that calves were close to .80 in 1996 (maybe 1995). I think I bought some real nice heifer calves that year for less than $450.

And it seems to me that calves in the U.S. at that time (500 to 600 lbs.) were in the low .60's all of 1996 and even dipped into the high .50's for a couple of months.

This was the bottom of prices in the last cattle cycle. I suspect we'll see something the same this cycle bottom (likely in 2008).

kpb

[cowman]

kpb: Thinking back on it I think you are right! If you sold right at the bottom of the market(Oct) and you had light calves...in fact I think I saw some 400 lb heifers sell for 76 cents!
I remember that year well. We only sold the very best steers...if memory serves me well it was late November, they weighted in that 750 range, and I think slightly under a buck around 98 cents?
Now thinking I was some sort of brilliant money maker I went out and bought some heifer calves(seems low 90s if I remember) and fed out my smaller steers and heifers? I believe I had about 150 head all together?
Anyway that was a canola year in our rotation so I trotted out and bought barley at close to $4! Thought I had enough hay but as I remember that was a pretty tough winter and I had to go get screwed big time on some extra hay! I can clearly remember coming in at noon everyday and turning on the markets...everyday it was feeders down, feed prices up, and higher interest rates! Anyway by spring I had pretty well lost my shirt and figured what the hell...in for a penny in for a pound, so I threw them out on grass(rented)! Actually the market turned around and in the end I probably broke even...but that was the last darned time I rolled the dice with bought calves!

[cowman]

Thinking even more about that time: I remember that as a real ugly winter? Seemed it snowed just about everyday?
Also I was in the middle of a divorce so was having a good time getting my ass kicked by the lawyers and injustice system! By spring I was about ready to commit hari-kari or something!
But hard times are the mother of invention and when life kicks you in the guts get up off the floor and kick back! I had been "dabbling" in the oil field and due to the fact I needed some serious money I dove right in head first...and in the end it turned into a nice little business!

[wade]

Hey- While you are predicting prices, I would like to know the weather for this spring also and what crops to plant to make money? Will we see BSE, Avian Flu, the masses switching to be vegetarians???? I am worried about this year and maybe not next cause Ritchie Bros. have quarantees. MAybe we can book auction sale now for 2008 or when ever you predict toilet prices and we could lock in good profit, exit and return back in wherever and whenever(maybe never) we wanted. Simple business plan like a all the experts say we need. Maybe all that grass could go for hay to feed the livestock masses- maybe McCartney's, Pam Anderson, Nature conservatory, etc. make fund to leave land idle??????Any more predictions?

[kpb]

Well, Wade, I don't claim to have all the answers but I've been in this business quite a while and I usually background calves, grass calves and have a cow herd so I also sell my own calves. So I think I know most ends of this industry and I figure I'm also in the business of trying to make a reasoned guess about how things are going to be in my business.

If you just blindly go ahead then you just have to take whatever the business cycle hands you. But if you can make a few decent predictions then you can determine your own fate a little more. That's what I've always tried to do and sometimes I've been right and sometimes I've been wrong.

cowman, I too remember that winter as brutal. You know I sold my calves that fall and got just miserable prices for them. But I also bought 150 heifer calves that were real nice through Cattlemans Financial, bred them and I've still got probably 100 of them in the herd. My wife thought I was crazy but I just couldn't see calves going any lower and I thought it was a decent way to expand the herd.

I think I'm going to sell the herd this fall along with their calves. Then I might just drift along with feeding a few calves for the next couple of years and get back into having a herd when prices are low again in a couple of years. If I could buy heifer calves again for that price I'd be happy!!

kpb

[wade]

MAybe my posting came across a little harsh. I agree that prices will probably drift lower. I also agree with knowing cost of production and planning. My thoughts were that all the predicting and planning are useless when these outside factors come into play-the border opening and closing alone has had a huge influence, let alone the other possibilities. I think that we need to take care of business today and be able to roll with the punches when they're thrown because it seems that there is always someone throwin one.

[cowman]

wade: There is some truth to what you are saying. I'm not saying a person shouldn't do their homework but if we get all hung up on the future...we wouldn't get anything done? Bottom line sometimes you just have to go with a hunch and roll the dice?
kpb: You might be right about the cow thing. And thinking back further to 95, I actually did pretty good on those calves in the end when I sold them in September! Don't like to admit I actually might have made a few bucks! LOL
This old cow/calf business took some pretty tough punches in the last couple of years...years that should have been the money makers? I see a lot of older guys bailing out...and they won't be back! But those darned cows are going somewhere? Someone is buying them and I suspect it could be the banks money? What happens to those cows if the calf market crashes?
Now I wonder: If you sell your cows, you obviously are going to have to feed calves...or do your part in a big way to help out the federal reserve! Hopefully the feeding situation will turn out better than it did this year?
Personally I was ready to go after one year of BSE and one year of drought! If the boy didn't insist on keeping them I would have retired. As it is I gave my cows to him, sort of? He owns them but we have this complex set up that basically means all money flows out of and into one bank account,anyways! Two seperate joint ventures and one numbered company...someday I swear me and that accountant are going to be sharing a cell at Stony Plain!
Anyways he is pretty committed to cow/calf and intends to expand...come hell or high water! So far I'm holding him in check and telling him go slow...that can still work when you control the purse strings!
And finally, right now is a very enjoyable time for me. The babies are coming fast and furious and haven't even touched a cow yet! It sure can be fun when calving means going out in the morning and counting the new borns? I'll probably be cursing the danged things by next week after I have a wreck! LOL