burnt
Well-known member
This is a column I recently produced -
ORIGINAL DESIGN
"Staggering Figures"
Neil held out the invoice for the newly bought calves. "Buck twenty out there," he stated, "plus the freight. It works out to about a buck thirty". At 485 pounds weaning weight, the rancher that produced those calves received a grand total of$582 per calf. As a cow calf operator, I could only shake my head. Even with their lower overhead, the western cattle producers must have a hard time penciling a profit with those prices. Here in Ontario, it is disastrously short of breakeven.
While recently presenting a Member of Parliament with the Canadian cattle producer's request for mediation on the BSE class action currently in progress, the Member pointed out that some calves were again bringing "a buck thirty" per pound. He stated that while the cow-calf operator might not find even that improved price to be overly profitable, the feeder/finisher will have a hard time penciling a profit with the higher priced calf. There are just not enough dollars in the finished animal. I pointed out that that was not my fault so why should I work for nothing to subsidize the consumer.
The actual value shortfall was sharply highlighted by a farming account my long-retired uncle described to me last summer. His early farming experience gave perspective to today's prices. Soon after marrying my aunt in the late 1940's, he bought my Grandfather's Zurich area farm including 6 cows, about 20 head of young stock, grain and machinery all included. They milked Durham cows, he said, because they were dual purpose and milked better than the Herefords. The main piece of machinery was a "D" Allis Chalmers tractor. The total package cost less than ten thousand dollars.
After the move, Grandpa's love for the place compelled him out to the farm almost daily to check on things. Thus, when my uncle shipped 2 finished steers to Toronto stockyards in 1951, Grandpa immediately noticed and asked about them.
"Shipped them to Toronto", Uncle Harold replied.
"How much did you get for them?" Grandpa asked.
"$900" Uncle Harold told him.
Grandpa was literally staggered by the news and just stumbled in a small circle for a few minutes mumbling to himself "Nine hundred dollars, nine hundred dollars . . ." Uncle was locked in paroxysms of laughter as he told me this, "$450 each", he chortled.
$6500 for one hundred acres and about $3000 for the livestock, feed and machinery. And almost $900 for two finished steers. "I just hit a good market" was Uncle Harold's assessment. He had received double the $200 -$300 Grandpa was accustomed to receiving for butcher steers just a few years previous. So, by extrapolation, those figures should equate to about $30,000 for a finished steer today, putting feeders at about $15,000, give or take a few thousand. Which would actually leave a little welcome profit for everyone in the business! Laugh later if you like, but think about it first.
Because a business that survives only by cannibalizing its production base will necessarily, eventually and inevitably fail. So indeed, "a buck thirty" seems a bit skinny and could use some fattening up, all things considered. Staggering figures, indeed.
J.E.S., MAY 26, 2011
ORIGINAL DESIGN
"Staggering Figures"
Neil held out the invoice for the newly bought calves. "Buck twenty out there," he stated, "plus the freight. It works out to about a buck thirty". At 485 pounds weaning weight, the rancher that produced those calves received a grand total of$582 per calf. As a cow calf operator, I could only shake my head. Even with their lower overhead, the western cattle producers must have a hard time penciling a profit with those prices. Here in Ontario, it is disastrously short of breakeven.
While recently presenting a Member of Parliament with the Canadian cattle producer's request for mediation on the BSE class action currently in progress, the Member pointed out that some calves were again bringing "a buck thirty" per pound. He stated that while the cow-calf operator might not find even that improved price to be overly profitable, the feeder/finisher will have a hard time penciling a profit with the higher priced calf. There are just not enough dollars in the finished animal. I pointed out that that was not my fault so why should I work for nothing to subsidize the consumer.
The actual value shortfall was sharply highlighted by a farming account my long-retired uncle described to me last summer. His early farming experience gave perspective to today's prices. Soon after marrying my aunt in the late 1940's, he bought my Grandfather's Zurich area farm including 6 cows, about 20 head of young stock, grain and machinery all included. They milked Durham cows, he said, because they were dual purpose and milked better than the Herefords. The main piece of machinery was a "D" Allis Chalmers tractor. The total package cost less than ten thousand dollars.
After the move, Grandpa's love for the place compelled him out to the farm almost daily to check on things. Thus, when my uncle shipped 2 finished steers to Toronto stockyards in 1951, Grandpa immediately noticed and asked about them.
"Shipped them to Toronto", Uncle Harold replied.
"How much did you get for them?" Grandpa asked.
"$900" Uncle Harold told him.
Grandpa was literally staggered by the news and just stumbled in a small circle for a few minutes mumbling to himself "Nine hundred dollars, nine hundred dollars . . ." Uncle was locked in paroxysms of laughter as he told me this, "$450 each", he chortled.
$6500 for one hundred acres and about $3000 for the livestock, feed and machinery. And almost $900 for two finished steers. "I just hit a good market" was Uncle Harold's assessment. He had received double the $200 -$300 Grandpa was accustomed to receiving for butcher steers just a few years previous. So, by extrapolation, those figures should equate to about $30,000 for a finished steer today, putting feeders at about $15,000, give or take a few thousand. Which would actually leave a little welcome profit for everyone in the business! Laugh later if you like, but think about it first.
Because a business that survives only by cannibalizing its production base will necessarily, eventually and inevitably fail. So indeed, "a buck thirty" seems a bit skinny and could use some fattening up, all things considered. Staggering figures, indeed.
J.E.S., MAY 26, 2011
