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Calf prices

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One good thing for all intents and purposes the farmers are out of the cow business-any I've talked to won't take a cow for free let alone pit in on them at the current prices. They can make some money growing grain so they're going to stick to it.
 
Corey.........that's where the real money is in cattle.....selling to the grain guys that are jumping in! :wink: :wink: Helps them outta tax problems :D :twisted:
 
I've got a story about one of those deals next time we cross paths lol. Not many mixed farms up our way anymore-big farmers-big ranchers and a few little stump outfits like mine.
 
just some food for thought the barn i work for sold a straight load of black and red steers weighing 690 for 138.50 $ 955 a head for 7 weights is good money
 
Black Out said:
I have never posted before and don't type to well so here goes.
I still have all my calves from last year also but I am going to hold them for a little while yet. If it goes down it goes down , the kids will just have to go without shoes for awhile. :) :)
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Black out have you still got them?
 
Black Out said:
I have never posted before and don't type to well so here goes.
I still have all my calves from last year also but I am going to hold them for a little while yet. If it goes down it goes down , the kids will just have to go without shoes for awhile. :) :)
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If you keep them, you might think of buying a put----it'll protect the downside, but leave you all the up----other than cost of put, which one can look at as insurence premium.
 
I am reading the posts and am a rookie at the cattle business. This maybe one of those times I get taught a lesson versus learning one, but I think the higher the price of corn/barley and Oil/Diesel/Gas and the more flex acres that are broke and put into annual crop production - the better for the guys who turn grass into pounds of beef.

Corn/barley and grass are at a very simple level substitutes for each other and the higher the corn/barley price - there should be greater returns for putting a pound of beef on an animal using grass. Especially if can minimize the use of barley/corn and fossil fuel.

From an outsider looking in - this industry has not fully recovered from BSE interms of savings accounts, pent up retirements/dispersals and fear of another catastrophic event - which is management psychology. The other thing that has happened is the difficulty or reluctance of young people to choose beef production agriculture as a career.

I watched it take place in grain farmers. In the '90s and early 2000s it was considered "child abuse" or "wasted potential" to let a child become a grain farmer. As things recently improved and as soon as the operating loans get paid off, the savings accounts get replenished, equipment gets updated and replaced - land values rise then grade twelve students from farms start ticking farming as a career option again.

Ok. here is the part which I may regret saying later - I think the beef production business based on grass as an input is just getting warmed up. As the psychology of the producers slowly switches from "better sell today cause it wont be there tommorrow" to patiently and orderly providing beef to the consumer then we will have reached the top of the market, but not till them. We are still in sell off mode.

I deeply respect those that have survived the recent turbulent times in animal agriculture and lots have the scars to show for it. Anyone in this busienss today has a bunch of things going for them other wise they don't get to stay doing it. I just thought I would put it out there with a hope to cause pause and savour the moment before you call the truck.
 
Gomez, I don't think you are going to regret your post. I thought it was a very well thought out and intelligent post.

And you may well be right about the top of the cattle market. I know the stock brokers used to say that the stock market had peaked when the little guys off the street came in and wanted to buy one share of stock or a very small order as they didn't have a lot of money. That was a sure sign the market had peaked. And I do think it is difficult not to push the sales of cattle at these prices. That bunched marketing could well work to increase the prices even more in the future when the supply has been reduced. On the other hand my dad always told me "You never go broke taking a profit".

In markets like these it seems like we always used to hear the "experts" saying the market had reached a new plateau and would never go back to where it was. I have not heard that this time...have heard more talk about how long can it last. Not sure what that means, if anything but it's kind of interesting.
 
Red Barn Angus - your dad is/was right. Great advise. Maybe its about dollar cost averaging or average selling price - in stock broker terms of buying frequently (in this case selling) when there is a profit and taking it and keeping going rather than all sold or none sold. hmmm.
Thank you.
 
Well I know this may sound crazy but I've made money in the cattle business and I've lost money. But my whole deal is I get a real satisfaction out of selling home raised yearlings off of grass. Last year I sold out in March and April and I don't regret it . But I it just isn't as satisfying to me .
 
Nortexsook, efb, and Redbarn statements are all different in direction and true. Going broke and getting rich are at extreme apposing ends of the idea of making money . When the pigs waddle in at both ends of the market - look out.
 
Black Out said:
Well I know this may sound crazy but I've made money in the cattle business and I've lost money. But my whole deal is I get a real satisfaction out of selling home raised yearlings off of grass. Last year I sold out in March and April and I don't regret it . But I it just isn't as satisfying to me .
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I have considered doing the same this year, not because I really want to have extra cattle around, but just because I have too much pasture/hay ground since our cow herd has shrunk drastically in the past couple of years.

If I do keep them, I will be age-verifying them so I can provide birth certificates to the buyer in the fall. ( They tell me your president can't even do that . . . :lol: )

Gomez said:
I am reading the posts and am a rookie at the cattle business . . . . . .
. . . this industry has not fully recovered from BSE interms of savings accounts, pent up retirements/dispersals and fear of another catastrophic event - which is management psychology . . . . .

. . . . As the psychology of the producers slowly switches from "better sell today cause it wont be there tommorrow" . . . .

. . . and lots have the scars to show for it. Anyone in this busienss today has a bunch of things going for them other wise they don't get to stay doing it. I just thought I would put it out there with a hope to cause pause and savour the moment before you call the truck.
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Gomez, I have read and re-read your post because it contains so much wisdom and practicality.

Your comments on the psychology end of things is right on. I, for one, see these prices as a good opportunity to quit, rather than keep on. Kinda like an abuse victim that finally says I'm outta here and goes.

At the Outdoor Farm Show last fall, a guy in the industry asked me if I'm going to get my cow numbers up again since it looked like things were finally turning around. I said "Why should I, the industry doesn't deserve it."

This guy thought about it for a minute or two and said, "You know, those are probably the truest words you could have spoken". THAT statement, coming from one of our "industry reps"! Yes, I'm a little bitter . . .
 
Black Out said:
Yes I still have them planning on going to grass with some of them. I hope I am not crazy. :D
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Yours are going to be the only ones left. You can name your price. :lol: I hope it works well for you. Risk deserves reward.
 
We pulled the trigger on two potloads of 750 pound steers today. We bought them in the fall around 400 pounds, and it's time to say good bye. We're going to make a profit, but it's not nearly what most people think it is. In fact, we made more on the ones we sold last summer. Two differences this time. The calves cost more coming in and the feed cost more. But, they did make money, and we're happy to take it and run.

We're keeping a few light ones back, but I don't think they'll be here long either. Then all we have to decide is which heifers get to graduate to the cow herd, and the rest of the heifers will go too.

What we don't know is how on earth we can buy in the next batch. Pricey doesn't begin to describe them, and our appetite for risk is not high. All these high cattle prices haven't been tested in the supermarket beef shelves yet, and when that happens, will we see resistance? Or will we see resistance when the feedlots lose money on today's feeders and try and make it back by paying less for the next ones? We've seen it all, and if anyone knows the answer, please tell us.

Times like these are great if you've got cows. It used to be that farms used grain to pull them through when cattle were down, and cattle to pay the bills when grain was down. We depend on our cow herd when feeders get out of the comfort zone, and when the prices drop, the feeders help cover the bills. So far we've gotten away with it, and it looks like the time for the cows to shine are back. Finally! :)
 
Kato, I think you are on target. There is a ton of risk out there at the moment, which means both potentially big profits, and also the reverse. In the last several years we have driven our costs way down and have built a good young cowherd. We are trying to keep all of our options open at the moment, including selling a bunch of cows if the price gets too crazy. I can raise replacements from the cows I keep for a lower cost.
The last couple of years we have had grass lined up for our yearlings, but have sold in April, March and this year in February (still have a few). When there is significant profit available there is nothing wrong with taking it and eliminating inventory risk.
Gomez - I agree that there is a lot of psychology going on at the moment. Some folks are starting to obtain the state of euphoria, and I think it is time to watch things very closely and use your own knowledge, comfort levels and available data, rather than rely on the opinions of others. There will be some price resistance, and the Japanese situation may impact the highest value cuts, and inflation will slow spending for a lot of people.
 

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