My New Years Resolution

[JD4ME]

I hereby resolve not to enter any areas of this forum that has any reference to the CWB unless it is positive and talks about solutions within the current structure and not what ifs, maybes and name calling is present.
I also resolve to participate with marketing areas that may actually be positive and not get bogged down in rhetoric.
Though I may be the only one on here that wants that.

[les]

You may get lonely all by your self lol

[raymondb]

I will be there right with you JD4ME. We need to be way more positive. I really think that the negatives tend to shout louder and longer and perhaps if we concentrated on what is good things just may get better.

[Bez]

I have a feeling the packers might fill them.

Bez

[Bez]

Bez you could be right. Packer ownership has never really been dealt with has it ?

[cakadu]

WD, would it be possible for you to give a bit of an explanation as to how you came up with your conclusion? I'm always interested in hearing "outside the box" thinking and would like to understand where you are coming from.

[wd40]

The light finally came on this week.

We as producers are wy too mush "Next Year" people. We are content with short sightedness. And the feedlot are the worst.
1)They are happy with a $25 margin year in year out.
2) They are always and only "margin players".

Therefore they never really apply their minds to how to increase the margin significantely to say $45 may we dare $50.
3) As soon as they have hit that invisable margin they spend it on buying calves and the price of calves goes up, (or toys)thus they maintain that invisable margin at what ever level they are happy at.
4) Therefore we never stratagize toward how to capture more value.


To add insult to injury Cow Calf producers are totally content to watch the tail lights of the linners after the last calves are laoded.

They (most) never really look at how can they add more value (not pounds) to their calves to help the feedlot realize more margin so he can spend more on the calves.

What a stupid industry we have created.

To add one last final insult to ourselves, The reason our Govt's haven't come up with a long term solution is becasue we are happy with short term quick fixes, and they listen to our fearless leaders provide insight.

It's high time we collectively took ownership of our induatry and make it waht it could be.

That is so far of the radar screen, most wouldn't believe it.

I think I'm going to be come a Maytag repair man.

[wd9]

Ok, JD4ME, good idea. Any good strategy for marketing the balance of canola not already hedged or presold? I'm sure I'm probably the only farmer without prepriced canola, but here goes.

options:

1. Store canola (assuming it is nice and dry) till the price goes up.
2. Buy paper till the price goes up.
3. Sell some every month as dollar cost averaging.
4. More options??

Given the current situation in excess supply, what is a good strategy to do?

After being burned in '02 with contracts and no supply, many in our area are quite concerned about supplying in a drought and did not sign contracts (myself included) this past year, or minimally. This affects marketing decsions and income, but the reverse is just as bad, having no contracts in a high supply year with poor prices when contracts could have been made earlier with good prices. Coulda Woulda Shoulda doesn't help me now though. So, good strategies?

[cakadu]

Thanks WD, your points are valid and do cause one to pause and think about viable solutions.

I suppose the biggest question is how to get producers to think outside the box and look for ways to capture the value.

I know that we have talked about costs, debt and financing in other threads. What I am reading in many of the threads is that more and more producers are beginning to understand their costs of production and make plans from there. How many animals are necessary to make things viable for individual producers is dependent on what choices the producer makes and what each one considers appropriate to meet his/her needs.

Gaining an understanding of costs is a major step forward; using that information to make sound business decisions is another step.

One problem that you have identified is that when a "magic number" is achieved, that is when expansion plans are implemented. A question I have is do we need to examine the point at which we make expansion decisions? Is it when things are rolling along real well and prices appear to be good, or do you do it based on other factors?

One other question I have is will we ever see the amount of packer owned animals change? I believe that right now it is at about 10% - is it possible for that number to go higher?

[Horse]

If we could truely use just our costs we may be able to survive and prosper but I feel one of the biggesr threats to our industry is the part time farmer and the sink farms and there are lots of them.
How do we know what the off farm investor may do if they have a good yr at what they do they arive at the market with bags of cash and skew the market while that is good for those at the market with thier calve sthat day how does one plan on such an event.

There are a lot of people in the oil business, and others , that are setting themselves up with a nice [ranch] as they dont farm and are doing it with a lot of tax $ so when they retire at 50 they have a nice toy and they dont figure profit and loss the same as real farmers have to to survive.
And to top that off the govmt programs are set to get votes not to give help so those with a tax farm colect the same as the other guys do .

[cakadu]

Horse, you also make some valid points. The tax rules catch up with some because you do have to be seen to be trying to make a profit and as emrald as said, there are restrictions when it comes to off farm income and how much of a loss you can claim. I do know that there are those who know how to get around these things, but eventually some of them do have to pay the piper.

How do you see there being a differentiation between a bona fide farmer and one who is using it as a sink farm as you call it? At what point is there a cut-off i.e. based on number of head, land owned, crops harvested, number of hours spent doing farm work? That is something that I think would be quite a challenge to determine.

[JD4ME]

My thoughts on Canola marketing, well for unpriced canola it depends on cash flow needs,and what your traditiional strategy is. I would be monitoring basis levels and talking to crushers and elevator companies, they know theres lots out there and won't be working the basis any tighter than possible. I see the dollar started the trading year weaker and that may help. a little but canola has certainly been under pressure the last couple sessions. I think it depends on what your needs are though if you are an empty bin farmer then likely dollar cost average and replace a percentage on paper. If you have the bin room you can contract way out and lock in prices 16.5 % higher May 06 than now thats good interest on the money if you can cash flow from board grains or livestock.
We priced out Bins as we need more storage as it is the carry would half pay for the bin in the first year. Thats a 50% return on investment there.
Different farms have different needs and can react to situations differently. PS this thread wasn't a canola thread if you want to discuss that start another thread. Thats another thing about that forum threads wander off topic way to easy-charlie haha

[BFW]

Wd40 what are you complaining about? You should be happy that feedlots try to operate on a margin of $25.00/hd/turn. The easiest way to increase my margin would be to pay less for feeder cattle. As luck would have it, feedlots (as you point out) are extremely competitive when buying feeder cattle thus feedlot margins seldom have an opportunity to get very big at least for any length of time as we hate to miss out on any potential loss opportunities!

[wmoebis]

I agree with you JD4ME
I just got my first taste of marketing outside CWB. Never again. Got burned by a local corp. hog barn. They aren't licensed by CGC, I put my faith in their word for payment and got ripped off for almost 1/2 this years production. Seller bewhare don't trust anyone who isn't lisenced or bonded. If they aren't they aren't the kind of buissness I want to deal with nor should you.

[grassfarmer]

Cakadu, I would suspect that packer owned cattle amount to more than 10% of their kills. It is said it takes 14-17% to control the market so I would be surprised if they don't have that much control already. And it has been the growth industry this summer by all accounts - sowing up deals with struggling feedlots to get them to custom feed for them under cover. This is a huge problem which has not been addressed. We took the 10% figure to Doug Horner and I don't think he was very interested in pushing for that limitation.