Downsizing the US Cattle Industry

[CattleCo]

As we enter the mid period of this decade one must wonder are we downsizing the beef cattle industry in the USA for many, many years to come. We have lost our export market to Japan and other Pacific rim countries. We have opened the door or (should I say closed the door) to Canada to expand their packing industry. We are looking at very high land prices for all of production Agriculture. Farmland in Illinois is going for over $5000+@ acre. A rancher in OK told me last week that grass land was $700.00 @ acre and it takes 12-15 acres to run a cow/calf unit. I guess that makes Illinois Farmland look like a bargain at 5 grand @ acre . The questions I have are "just where the hell are we headed in this Agriculture Industry. Cow/Calf, Stockers, Feeders, Grain , etc......The USA runs on Agriculture and Energy, as well as other developed countries, I cannot see the US and the other developed countries keeping this deal together much longer. Will we see grass land go ungrazed, farm land go unplanted, feedlots half full????? Is this the time to sell out and keep your "powder dry"? Farm land at over $4000.00@ acre will NOT work, Grass land at over $700 @ acre will NOT Work, 1200-1500+ bred Cows will NOT work........we have the potential for a very volatile grain market this season........I think we have way to many producers and growers that have not really figured their cost of production this year. I just paid $440.00 @ ton for anhydrous ammonia!!!! I don't know if I will stroke or have the "big one"!!
We have the issue that Packers may move a portion of their harvesting operations to Canada. Those jobs will not return any time soon. We have an auto indusry in the toilet. For example GM stock has devalued 75% in 4 years. Ford and Chrysler are in trouble. I am trying to be optimistic, but this deal looks like a helluva wreck in the making.....what do you folks think?? As for the Canadian border deal.....stick a fork in it!! Canada is going it alone and rightfully so. Our leaders cannot make a deal in a Monkey "Cat" House with a basket full of bananas!!!

[~SH~]

The reality of this industry is that we have people from the city that have made their money that are willing to buy land at these prices and run cattle at a loss for this way of life or they buy the land for recreational hunting opportunities. I see this happening all over while producers think packer concentration, captive supplies, and imports are their competition.

I'm not complaining about it. Just stating the fact that this situation exists.


~SH~

[SMS]

Ty Cattleco, I think you may be right.

The economy of the western world is just about at the top and only has one place to go....Bust.

There is an old saying in the oil patch here, and it applies to agriculture now, something like this:

"Please Lord just give me one more boom, I promise I wont blow the money on expensive wine and cheap women this time"

[Maple Leaf Angus]

There's a story about a cash crop farmer who found an old lamp in his shed one day and when he dusted it off, a genie billows out and offered him one wish.

The farmer says without hesitation, "I wish I had $4.00 corn".
"Done.", says the genie, and sure enough, that night when he checked the prices, corn was $4.00.

A few months later, the farmer saw the old lamp sitting on the workbench and dusted it off again. Out pops the genie and said, "I granted you your wish, why are you bothering me again?"

The farmer says, "Please, genie, just one more wish and I'll never bother you again."

Well, since the farmer was crying so hard and looked so pitiful, the genie broke down and asked him what he could do for him this time.

The farmer brightened right up and said, "I wish for $4.00 corn".

"But I granted you that wish once before, why would you want it again?", the genie asked.

The farmer replied, "This time I'd sell".

[SMS]

good one ML Angus....

I have heard that before, except with $1.50 calves or $10 canola.

[GLA]

CattleCo,

A Monkey "Cat House", your searching.......really searching...........you need to get out more and meet some "Real people".....maybe on a Troop Train!

But you are right on, R-Calf has done what no one else has been able to do......absolutely wrecked the US Cattle Industry by being so short sighted, tunnel visioned and greedy......they wanted their way and now they have it. I would venture to say that the Japanese don't give a damn about buying American beef, now or ever. The US Cattleman better take a deep seat, short rein and a distant look, cause this is going to be a very rough ride!!

I just wonder what R-Calf has up their sleeve now, to "help" the American Cattleman.......LORD helps us all now!

GLA

[~SH~]

Glad to see nobody has the wool pulled over your eyes GLA.

Good post!

May your ultrasound data be accurate and profitable.


~SH~

[whiteface]

Why haven't any of the R-calfers posted an explanation in this thread? Thanks for reading from Canada! Have a good day all!

[SASH]

In the long term the American economy is due to fail unless they start realizing that we are now dealing in a world economy. The protectionist stances taken by the US in order to save US jobs will ultimately backfire. As the US goes around the world signing up free trade agreements and then refusing to honor them and as judgements are made against them by the WTO and they refuse to pay, they will slowly become excluded from world trade. As the US uses tariffs and other trade barriers to exclude foreign products from the market, other trading nations will start turning to more trade friendly markets. Slowly, the US will find itself the target of retaliatory tariffs making it more difficult for them to compete in foreign markets. This will cause a loss of industry in the US as companies move to lower cost production centers, It will also cause an increase in the prices paid by the American consumer. As the job losses mount, and the prices for goods increase, the consumer will be squeezed for their last cent. Add to this the retirement of the Baby Boomers and the economy will eventually topple. I give you twenty years max before you are a Third World Country.

[whiteface]

That was an awesome post SASH! What are you doing as a cattle breeder and not an economist, or have you just not been "discovered" yet.
I'm still waiting for the R-calfers comments on this thread. What the heck they think are going to be the results of their actions 5, 10, 20 years down the road or if they have even thought that far ahead. Their adoring leaders will have long run off and retired by that time and then where will they and their beef industry be after they've decided they don't need anyone but themselves.
Still waiting...
You're all proving SH right when all you do is shout about how bad the Canadian cattle are but can't organize your thoughts and comment in a factual logical manner as to where you think the industry is headed.
Or is that the exact power trip that you're on. Oh well, your choice.
Thanks for reading from Canada, have a good day all!

[Brad S]

First, You know we're producing a hell of alot of beef off of fewer cows - this represents an efficiency increase.

Western lands have been gentrified for along time, but now the urbanites are moving out and imposing urban silliness like no leghold traps in Colorado.

The South American production capability is staggering

There sure seems to be alot of correction in land prices, but remember very low interest rates have justified much of this inflation.


Deepseat and short rein is right, the cow calf sector has been profitable 17 of the last 20 years. This could only happen because of renewed demand, but itd not sustainable.


Sash, " I give you twenty years max before you are a Third World Country."

What amazing insight, and free also. I'm sure this analysis is worth every cent it costs.

[Denny]

Doom and Gloom

Where there's a will there's a way.

I sure am glad when I wake up in the morning I dont have your feelings.Farmland in the late 70s early 80s in southern MN was $3500 an acre.A couple of years later you could by that same land for 5 to $700 an acre.Around here it was $400 went down to $50 now its up to $1000.00 more for some less for others depending on area.