Belinda Stronach

[cowman]

I wonder how low calf prices will affect some producers decisions to stay in this business? Just offhand I can't remember how low calves went in 2003 but it looks like we could be there in the next few weeks?
In 2002, when grain prices rose dramatically and calf prices fell, the Americans stepped in and bought a lot of calves? Don't know if that will happen now as the Canadian dollar is very high and corn is high?
Where does this end up? Cheap calves should decrease the supply eventually? Less feeders available will reduce the need for grain? This grain price is being driven(supposedly) by crop reductions in other parts of the world?
What happens next year if there is ample grain around the world, but we don't have as large a calf crop? Will we see record calf prices?
The Canadian cow/calf producer has taken a beating for the last three years(maybe four)...how much longer will he be able to survive? Or want to?
I would suggest calves at $1.06 really is getting borderline to any kind of profit? How many industries in the real world can afford to take prices we were getting in the 1980's?

[coppertop]

cowman, I would certainly argue that Belinda is not the 'darling of the women's vote'. Most women that take the time to vote like to see something with a few brain cells in a decision making role.

Several years ago, I attended a Federation of Canadian Municipalities convention and sat in on a session that was geared to encourage more women to run for public office. It was such drivel that I left half way through the session, the focus was on getting women to run, and showing them how to dress, but not one word was uttered about finding candidates, both men and women with integrity and brains !!!!

Belinda is but one of many who are involved in public life don't really care about propriety. But, having said that, its the electorate that chooses this sort of person !

[cowman]

I agree with you about the electorate deciding who gets in. Doesn't say much for the people who voted for her does it? I wonder how she would fare in Hanna, Alberta?
I'm not saying Stronach is anymore of a sleaze than a lot of MPs! Peter McKay isn't the most honorable person around either!
It must be frustrating for people of integrity, who run for public office, get painted with the same brush as these less than honorable people?
Call me naive or something, but I still like to believe there are people in public life who run because they think they are doing their duty and not just out to rip off the system or play the big wheel? Fewer all the time I will admit.

[kpb]

cowman, I wish farmers son was around so we could debate the existence of a cattle cycle again. I still think that we are just at the start of the downward trend of the cycle. Last spring I said that I thought that calf prices would be lower this fall and would continue to get lower over the next three to four years.

I think you will see steer prices at .80 to .85 before this cycle is over (as we saw in the mid-90's) and I think prices next fall will be lower than those available now. I think the cattle cycle is alive and kicking and those who ignore it will get kicked.

kpb

[smcgrath76]

My personal belief is that the cattle cycle is alive and well (although slightly messed up by BSE).
Combine the cycle with the high $ and it does not look so good. Generally speaking it takes longer for input costs to drop as the dollar rises, versus the speed with which calf prices decline.
I also believe that over the long haul, our low dollar killed us in terms of being leading edge and competitive with our facilities, etc.
Our low $ relative to the US, led to high prices, which compensated for the declining infrastructure amongst our processing industry. Now that the dollar is higher, we really need leading edge efficiency in processing.
The discussion on who owns the processing is another topic altogether.

[grassfarmer]

Cowman, you say "I would suggest calves at $1.06 really is getting borderline to any kind of profit?" - really? and do you know my production costs? - do you know your own for that matter?
Personally I'm quite happy selling my off sort heifers at over $600 straight off their mothers. Their mothers cost $100 of purchased feed to overwinter last year and that was by far my biggest cost. That said these would be my lowest margin cattle, the main group that get sold after preconditioning and backgrounding will be my next lowest margin leaving my grassfed steers direct marketed as my highest margin cattle by a long way.
They are averaging $1390 a head after paying processing fees and beef delivery charges. Sold a year after weaning they work back to $1000 per calf at weaning even if you allow a $ a day feed cost for their second year.

There are so many opportunities in this country if people would just see them. You say "How many industries in the real world can afford to take prices we were getting in the 1980's?" - I would say how many of the coffee shop pontificators are bitching but haven't reviewed their production or marketing policies since the 1980s?

[cswilson]

GrassFarmer u crazy old coot don't you know were all gong to hell in a hand basket-I'm glad I can't charge rope at the Co-op or I might just take the plunge lol. Cows do great on grass and water not so well on whine and ponder. We made a bit of money on our fat cattle this summer and I suppose we'll make a bit on the next set.

[Cattleman]

kpb and smcgrath, I am on the other side of the cattle cycle arguement. For argument sake, do you believe the North American cattle industry operates on the same cycle? My understand from teh cattle cycle theorists is does? Then if so, isn't the American herd in rebuilding phase? Or is it done already? Also, it sounds like Canada is in the liquidation phase??
Maybe I have some of this wrong, but it appears to me that once something happens in the industry that resembles part of the cycle, we jump to say the cylce is working, such as a shift in calf prices.
In the theory of the cattle cycle production drives prices, and we react to these prices in our production decisions, but right now, grain is driving cattle prices, and this along with drought is driving production decisions. None of which relate to the cattle cycle theory.
To me it seems that trade uncertainty, weather uncertainty, price uncertainty, and demographics of agricultural producers is driving production decisions.
I would like to hear your thoughts, I think there are a couple holes to punch through! Thanks.

[kpb]

cattleman, all of the variables that you mentioned along with others such as currency movements will affect the short-term cattle prices. But the cattle cycle being 10 to 12 years long can be used to help predict the longer term movement of prices.

Also, it does not matter what the Canadian cattle herd is doing, expanding, shrinking or staying the same. Prices for fats are set in the U.S.,like it or not and the size of our herd has no bearing on prices. It may be hard to swallow but our prices are established by the U.S. market--there really is no such thing as a North American price--there is a U.S. price that is reflected, with the basis, in Canada.

I am always amazed at people who think that all commodities, including cattle, are not cyclical. This is not really mysterious-when prices are high commodity producers (cow-calf guys) expand their production to take advantage of the high prices. This, in turn, leads to more product, more supply to meet a limited demand and, therefore, prices decline. This forces producers to cut back, hence less production to meet demand, therefore higher prices. Therefore a cycle.

At the moment U.S. cattle producers are expanding to realize higher prices. This will result in more calves coming to market, hence more product and lower prices in the future as I stated in my previous post. It matters not at all what Canadian producers are doing in terms of liquidating or expanding their herds. Except that if you expand when the U.S. guys are expanding, you are going to be stuck with more calves when the prices slide.

The old saying is that no heifer calf kept to be bred when prices are high has been a profitable cow. Mainly because that heifer's calves are hitting the down side of the market. The best time to buy or keep heifers for breeding is when they are selling for .70 a pound and nobody wants them. Then that heifer's calves will hit the rising market.


kpb

[blackjack]

...i think kbp you should write in the cattleman's magazine...great insight...

[cswilson]

Don't you know that the U'S market will teeter at the brink and collapse if we send one too many potloads of calves there. I'm surprised old Willowcreek hasn't been on this board too expounding his R-Calf theory of economics. The cattle business sure is cyclical it's not too scientific but the old adage 'If your cryin' you shoul'd be buyin' works most time. Mind you there's a few posters o here have a tear in their eye 24/7-not sure what the solution for them is-we can't use them over here in Saskatchewan lol.

[canuck]

Willowcreep is probably down south building Georges new fenceline.No doubt good practice for the one he wants to build along the Canadian border.