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The real culprit behind the drop in feeder prices

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Faster horses
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The real culprit behind the drop in feeder prices

Postby Faster horses » Tue Nov 01, 2016 11:14 pm

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Re: The real culprit behind the drop in feeder prices

Postby WB » Wed Nov 02, 2016 5:33 am

I don't think you need a Ph.D. To see that cattle feeders are going broke. You can blame whomever but that doesn't change the aforementioned. Not sure where good news is but rising insurance premiums for healthcare doesn't help. Consumers have less to spend on food.

Our country is in sorry shape and most don't even know it yet.

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Re: The real culprit behind the drop in feeder prices

Postby Mike » Wed Nov 02, 2016 7:27 am

WB wrote:I don't think you need a Ph.D. To see that cattle feeders are going broke. You can blame whomever but that doesn't change the aforementioned. Not sure where good news is but rising insurance premiums for healthcare doesn't help. Consumers have less to spend on food.

Our country is in sorry shape and most don't even know it yet.


Yep. And the next guy in line will get the blame if he's even remotely conservative.
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Re: The real culprit behind the drop in feeder prices

Postby Angus 62 » Wed Nov 02, 2016 7:47 am

Largely a load of crap. As WB said cattle feeders have even less market leverage then ranchers selling feeder cattle. The few percentage points increase in fed cattle resulted in a nearly 50% drop in price. For a competitive market place to exist you cannot have things like packer owned captive supply that can kill a market anytime it shows some life.

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Re: The real culprit behind the drop in feeder prices

Postby Faster horses » Wed Nov 02, 2016 8:31 am

Angus 62 wrote:Largely a load of crap. As WB said cattle feeders have even less market leverage then ranchers selling feeder cattle. The few percentage points increase in fed cattle resulted in a nearly 50% drop in price. For a competitive market place to exist you cannot have things like packer owned captive supply that can kill a market anytime it shows some life.


Why would the packers want to choke their supply of beef? After all, ranchers and farmers own the factory.
Not arguing, just wondering.
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Re: The real culprit behind the drop in feeder prices

Postby mrj » Wed Nov 02, 2016 9:43 am

Thanks for sharing the info, FH. And may the Saints preserve us from believing educated people when they try to correct our self-deduced and/or favorite 'leaders' inflammatory statements about markets and causes for cattle prices dropping!!!!

mrj

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Re: The real culprit behind the drop in feeder prices

Postby Angus 62 » Wed Nov 02, 2016 3:03 pm

If you go back over the past year or so you would be hard pressed to find anyone, including educated experts that have monitored the cattle market for years that predicted anything close to the market drop we have experienced. Which would indicate that there are other factors affecting the market. Again most everyone expected a lower market but even the "experts" couldn't foresee what has happened. The things that have been ignored by some groups that are supposed to represent producer interests such as packer concentration, captive supply, lack of a meaningful cash market, etc. are the "chickens" that are coming home to roost now that cattle numbers are starting to rise. It is comical how a few months ago no one could see this coming but now say they "know" why.

There is once again legislative interest in adding some teeth to the Packers and Stockyards Act. Guess what group is taking the packers interest ahead of the producers they say they represent?

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Re: The real culprit behind the drop in feeder prices

Postby WB » Wed Nov 02, 2016 8:47 pm

Faster Horses, when I spoke with our local Tyson buyer a month or so ago he seemed surprised when I thought this would lead to cowherd liquidation. He is a very young guy so I think this downturn is a new thing for him. As for the higher up packer representatives. I don't think they give a care at all if I am still in the business next week, next year or twenty years from now. I really feel as cattle producers we all need to learn how to help ourselves and educate ourselves to what is happening beyond our ranch gate.

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Re: The real culprit behind the drop in feeder prices

Postby Faster horses » Wed Nov 02, 2016 9:06 pm

Maybe producers should unite and have their own packing plant. I don't think that has ever been done, has it? Why not?

As long as we have been in the cattle business, there have been ups and downs. It is that it got so high for a few years, that
now it really hurts. I feel for everyone.
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Re: The real culprit behind the drop in feeder prices

Postby PPRM » Wed Nov 02, 2016 9:52 pm

Faster horses wrote:Maybe producers should unite and have their own packing plant. I don't think that has ever been done, has it? Why not?

As long as we have been in the cattle business, there have been ups and downs. It is that it got so high for a few years, that
now it really hurts. I feel for everyone.



Some tried in Washington State. It shut down.

I spent 10 years in Food processing. Most Farmer owned ones have the same issue. It needs to be profitable as a stand alone business. Yet, the growers try to see that it is managed simply to "Give" them more money. Also, your plant needs to put out product price competitive in the market if you are making commodity product.

The better examples IMO use well run packing plants to toll process for them and focus on providing great beef calves and marketing.
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Re: The real culprit behind the drop in feeder prices

Postby Big Muddy rancher » Wed Nov 02, 2016 9:55 pm

We sell protein, hogs and chicken can out produce us just by the fact sows have litters and hens lay a lot of eggs. We are competing wit them and soy ect. for market share. Hogs have got so cheap it's almost time to start knocking piglets on the head.
We have to make beef an eating experience to sell more beef and not compete on price.
Remember dairy cows produce beef but are a by-product of their industry.
Producers did try to run their own packing plants in Canada during BSE years, I don't think anyone is still running, to much competition for the cattle, huh
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Re: The real culprit behind the drop in feeder prices

Postby WB » Thu Nov 03, 2016 7:15 am

BMR, couldn't agree more. Remember also that pigs convert better than 3:1 and chickens 2:1 so the cheaper corn gets the bigger advantage they have. Our industry has the fallacy that effiency is the only way to compete in the meat case when in fact the only way we can compete is taste. The ractopamine in our product is hurting us big time. The shakeout from this price drop is going to be felt for a long time.


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