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Cow Calf business

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Gomez

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I funding it perplexing, that as the price of corn/barley goes up the price of calves go down and as well as the prices of grains go up we can generate more value from our grass by putting pounds on grassers than by cows eating that grass and producing calves. That is, it seems to me that grass and barley are exchangeable substitutes for each other. Nothing new here.

The question for me is where do the calves continue to come from to make the rest of the system work? How far away from a situation of not enough calves to go round are we? My assumption is the value of corn,barley and grass will stay high for the forseeable future and therefore calves will be lower and the calf price continues to be determined by beef finished price - cost of gain = calf price? When will see the day when a rise in grain price has no effect on the price of a calf? Are my observations and conclusions flawed? Will there be a shift in the system in the near future? Crystal ball predictions anyone?

Have guys like me been asking this same question for a hundred years?

(':???:')
 
The only thing that gives me any comfort in this situation right now is an adage that I learned from an advisory service to which I once subscribed. It goes as follows -

"Cattle prices climb a wall of worry".

It should soon be true because I've been worrying for the last 7 years . . .

:?
 
The calves are disappearing fast. There are 600,000 less calves in the country this year than two years ago. And there is more than enough feedlot space to hold this year's entire calf crop. Between our local farm paper classified ads, and one local auction mart, there are over 2,000 bred cows for sale right now, and the fall bred cow bookings for the other auction marts aren't even posted yet. If sales up to now are any indication, a lot of these cows won't see another calving season.

It'll be interesting to see how all this works out. The price of fats isn't going up. The calves are disappearing. The cows are disappearing. If those empty feedlots want cattle they're going to have to pay more for them, or stay empty.

It doesn't add up. My prediction is that this time next year the feeders will be hurting as much as the cow calf producers have been. We're about to share our pain.

Scary stuff indeed. :shock: :shock:
 
The cattle market runs as much on emotion as it does common sense at times. There must be some confidence in the feeding industry as they are proposing a 36,000 head lot by Outlook, sask. or is that just a case of moving some of Alberta's capacity east? Usually the best time to place cattle on feed is right after a bad quarter-feeders start to buy their breakevens. If they made a bit of money maybe sell because optomism will be the word of the day. In the best of times there are still cattle that money is lost on finishing and vice versa when times are bad.
 
In my mind I think it is an issue of short vs. long run economics and a case of unfair competitive advantage.
In the short run there was very big $ to be made killing cows. So you kill cows. Longer term, by the time the market reacts to the shortfall, there is so much equity burned up that cow numbers are too low. Calgary has been dark for several weekdays in the last month.
As for value of grass, again it is a short term issue with long term implications. If it costs $0.70 per pound in a feedlot and you can do it for $0.35 on grass then you use grass as your unfair competitive advantage. It is basically a cheaper substitute for feedlot grain. I suspect we will see less beef get sold for the same or higher prices, and margins will continue to be squeezed.
 
Problem with the grass idea is where are you going to find it. Maybe in your areas it's from land sitting idle. I can tell you in this area if it's fenced it's not sitting idle.As corn goes up more land here is being converted to growing corn.Pasture is worth $10 an acre tame hayground not much more but the corn guys will pay $35 an acre for corn pretty tough to expand at those prices.By-products are the game changer here if you live close enough to a source.
 
Denny said:
Problem with the grass idea is where are you going to find it. Maybe in your areas it's from land sitting idle. I can tell you in this area if it's fenced it's not sitting idle.As corn goes up more land here is being converted to growing corn.Pasture is worth $10 an acre tame hayground not much more but the corn guys will pay $35 an acre for corn pretty tough to expand at those prices.By-products are the game changer here if you live close enough to a source.
Click to expand...

Let me get this right - corn ground in your country rents for $35 an acre?
 
burnt said:
Denny said:
Problem with the grass idea is where are you going to find it. Maybe in your areas it's from land sitting idle. I can tell you in this area if it's fenced it's not sitting idle.As corn goes up more land here is being converted to growing corn.Pasture is worth $10 an acre tame hayground not much more but the corn guys will pay $35 an acre for corn pretty tough to expand at those prices.By-products are the game changer here if you live close enough to a source.
Click to expand...

Let me get this right - corn ground in your country rents for $35 an acre?
Click to expand...

Dryland
 
loomixguy said:
and pasture rents for $10/acre? :shock:
Click to expand...

I know of a 160 acre pasture that cost $5000 it ran 50 pairs for 5 months.
I rent one place its 240 acres and I pay $5500 a year I ran 40 pairs for 5 months plus put up 320 bales of hay on it but I did spend a $1000 on fertilizer.I rent DNR ground for hay and corn I pay $8 an acre plus the land taxes on it.Another 600 acre pasture is $6000 and its good for 70 pairs 4 to 5 months.
 
WOW. Grainland (dryland) here is at $45 and it won't grow corn. Pasture is closer to $20 - $30 an acre. For most that $20 is for quarters that will run 15 cows for 5 months.
 
I think Minnesota is the place to run cows.

Here in Mid-western Ontario farmland that grows 45 -50 bu beans and 150 -180 bu corn in renting for $200/acre and up to $300/ac. if you get an edible bean contract for it. And selling prices are approaching $10,000 /ac. We are 2750 CHU land.

This is land that takes 2 acres/ year/pair. It no longer makes sense to keep cows on my land. I could rent it out and gross almost as much as I do with the cows minus expenses.
 
burnt said:
I think Minnesota is the place to run cows.

Here in Mid-western Ontario farmland that grows 45 -50 bu beans and 150 -180 bu corn in renting for $200/acre and up to $300/ac. if you get an edible bean contract for it. And selling prices are approaching $10,000 /ac. We are 2750 CHU land.

This is land that takes 2 acres/ year/pair. It no longer makes sense to keep cows on my land. I could rent it out and gross almost as much as I do with the cows minus expenses.
Click to expand...

But then you wouldn't have anything to talk about but how much interest your money was making in the bank. :p
I believe you will be keeping your cows Burnt, they are too much a part of you. :wink:
 
gcreekrch said:
burnt said:
I think Minnesota is the place to run cows.

Here in Mid-western Ontario farmland that grows 45 -50 bu beans and 150 -180 bu corn in renting for $200/acre and up to $300/ac. if you get an edible bean contract for it. And selling prices are approaching $10,000 /ac. We are 2750 CHU land.

This is land that takes 2 acres/ year/pair. It no longer makes sense to keep cows on my land. I could rent it out and gross almost as much as I do with the cows minus expenses.
Click to expand...

But then you wouldn't have anything to talk about but how much interest your money was making in the bank. :p
I believe you will be keeping your cows Burnt, they are too much a part of you. :wink:
Click to expand...

That's the trouble. Even though it doesn't work anymore.

But while my wife is very patient, she is not stupid and does have some input around here too . . .
 
Must be some folks looking at running yearlings on grass next year...Locally I've seen 340 wts selling for $1.60= $544----450 lbs bringing $1.50= $600 and last week they had a ring full of mixed 230 wts that brought $1.80 = $414....
Thats more than we got for 600 lbers some years not too far past :wink: :D
 
Wow those prices are shocking. Calves down here are getting given away or stolen depending on which side of the trade you are on.

No. 1 and 1/2 heifers for 540# for .80 to .84.

I am trying to put a deal together for winter grazing to get some. No luck so far. Wheat pasture needs rain and no one will commit or the wheat guy is getting dollar signs in his head (surely to be disappointed come harvest time) and thinks he is better off with no grazing and harvest only.

Bad deal here for the cow-calf guy.
 
Sold 10,460 lbs 3 weeks ago at Joplin, MO. 546 lb steers brought 1.17 , heifers brought .99 to 1.11. We don't have enough farmers to compete for tillable ground around my parts....wish my ground would bring 2-300 per acre. Guess you would have to figure costs for re-establishing pasture and herd if the grain prices drop...always risk in every move you make.
 

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