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How much will Fuel Prices change the Cattle Industry

PORKER

Well-known member
A couple of Examples:In Greenville, Texas, Crew Cut Lawns, a landscaping and lawn care service with $180,000 worth of equipment and four gas-guzzling Suburbans, has raised prices 5 percent and stopped offering free irrigation estimates to outlying callers.

At American Tire Inc. shop in Wheeling, W.Va., Tom Fredericks has doubled his $5 charge for road service calls to fix flat tires. He said he may also have to increase prices for tires, which are made from oil.

Connie’s Pizza, a Chicago-based chain that makes about 10 million pies a year, has a fleet of 60 delivery trucks that use a total of $10,000 to $12,000 in gas per week, president Marc Stolfe said.

The company charges a $2 delivery fee. But because of the run-up in gasoline prices, that no longer covers the overhead costs, Stolfe said. So far, he has yet to raise the delivery charge for fear of losing business.

My thoughts are that the shipping of cattle over long distances is going to kill the pay price for Cattle.
 

PORKER

Well-known member
Being that gas and diesel are the same price , The thought is that the cost to move a calf from the born site to the packer could run about about $120.00 avg.per animal. per 500 miles,up 50% in the last 2 years.
 

agman

Well-known member
PORKER said:
Being that gas and diesel are the same price , The thought is that the cost to move a calf from the born site to the packer could run about about $120.00 avg.per animal. per 500 miles,up 50% in the last 2 years.

How do you figure? The current cost is $3.00 per loaded mile. 500 miles equals $1500 divided by 38 fed animals per load the cost is $39.47 per head. A load of 550 weight calves would be $17.24 per head over the same distance.
 

BRG

Well-known member
Most trucks will charge around $3.00/mile. If the kill animal weighs 1300lbs. They can fit around 38 head on a load. If they need to haul 500 miles, the total cost is $1500 per load, and cost per head is just under $40. So the quote of $150 is way off. But anyway, it will and already is playing a huge role in the price they will give. If trucking was $2.50 a mile, that would be around $33 a head for the same trucking.
 

DiamondSCattleCo

Well-known member
PORKER said:
Lets Talk about total transport costs from field to fork.

Exactly. I'm not sure what its like in the US, but most cow/calf guys up here sell weaned or backgrounded calves. So you have the cost of shipping to the barn (or direct to feedlot). Then you've got the cost of shipping from feedlot to packer. And from packer to destination.

The cost of fuel is beginning to have an effect. Just a couple years ago, it cost me $6 - $8/head to ship to the barn. Now its up to $15 and will likely have to go higher since we're now at $1.13/litre prices.

The gouging study done by the Canadian government was such a joke. In the decade between 1990 and 2000, oil companies combined for a total net profit of $100 billion up here. This first quarter of this year, they combined for a total net profit of $10 billion. But according to the study, the markup hasn't changed one bit. I didn't look, but I wonder if the study was done by the same outfit who did the packer gouging study. Perhaps their calculators are broken?

Rod
 

agman

Well-known member
PORKER said:
Lets Talk about total transport costs from field to fork.

OK, since you made the suggestion please make a post to show all the transportation costs at each sector. Is that not want you want to talk about?

Since you are a member of the misled group who believes its members only produce cattle why would you worry up about upstream costs?!!!
 

agman

Well-known member
Tommy said:
Porker...I suppose Everyone else has to do their transportion for Free !!!



They don't count.

Are you not a member of the organization that tells its members they produce cattle not beef? Why would upstream costs concern you? Perhaps you can assist Porker in his effort to post a total transportation figure. I am certain you know the answer!!!
 

Econ101

Well-known member
agman said:
Tommy said:
Porker...I suppose Everyone else has to do their transportion for Free !!!



They don't count.

Are you not a member of the organization that tells its members they produce cattle not beef? Why would upstream costs concern you? Perhaps you can assist Porker in his effort to post a total transportation figure. I am certain you know the answer!!!

What is your point here, Agman? Everyone knows that higher oil prices will have an inflationary impact on an economy that has oil and its products as a base for its economy. Cattlemen are arguing that the extra costs of oil have to be absorbed by them and it reduces their profitability. Since they are price takers, and not price makers, this is a fact. Jason has already given us his spiel on decreasing his costs by driving less.

Short of having cattle drives again, energy will eat into everyone's profitability or cause inflation. This is the result of short sited "use it all up while we have it" mentality that has plagued the energy policy of the U.S. We have structural problems that take long term solutions to fix. All we have seen out of the energy policy is give outs to oil industry.

For instance, instead of giving tax breaks for finding more oil, which is what we had this last energy bill, why not take a different approach? How about taxing more if the companies DONT find more energy to replace their reserves and help out the economy? It is time that cattlemen stopped having to absorb all of the costs and that we have a national policy that allows economics of the energy business to work for the rest of us, not just oil companies.
 

katrina

Well-known member
My hubby as we speak now is burning his first tank of sunflower biodiesel. A maiden voyage to get herbicide...... KISS THIS RAG HEADS!!! (I'm bending over and grabbing my ankles)....
 

Mike

Well-known member
katrina said:
My hubby as we speak now is burning his first tank of sunflower biodiesel. A maiden voyage to get herbicide...... KISS THIS RAG HEADS!!! (I'm bending over and grabbing my ankles)....

You might oughta wait until he gets back. :lol: :lol:
 

mrj

Well-known member
Econ, isn't the oil reserve the governments reserve of oil for emergency use, rather than the oil companies stockpile? That is the way I've read it. How about others?

Have you funded a cattle drive lately, Econ?

We do them each spring and fall. Not the "tourist" kind (thinking about it, for the right price we may consider taking a few tourists along), but to move our cattle from one area to another, from a just a few miles to 20 and 40+ miles. It doesn't come cheap....but is easier on cattle and maybe no more costly than transport by truck. We don't travel fancy....just old canvas tents, old team and chuckwagon with ordinary food cooked for supper and breakfast for the long drive, and some good local cowboys on horseback working loooonnng hours for the shorter ones.

It has been quite well established that it is the traders on the world wide stock exchanges who set the oil prices, not the oil companies. Who are the investors in oil companies, anyway. From what I've seen lately, there are lots of retirement pension plans, insurance funds, individuals' retirement accounts and other ordinary middle income people invested in them. High oil prices hurt me as much as anyone else living 30 miles from nearest doc, county seat, good grocer, and 120 miles from my city for major business, medical help, and shopping for everything from parts for ranch equipment to a new shirt or sox. Environmental extremists and NIMBY's like John Kerry and Ted Kennedy and those in CA who won't allow windfarms and other means of non-oil power, including coal extraction, or off-shore oil drilling and new refineries built. There are way too many government mandated hindrances to improved power and improved mileage on cars. This has got to end. Pres. Bush needs more, not less support in new, cleaner energy source development. We, the people need also to practice the common sense things we can do to cut our energy use. Katrina's family use of bio-diesel is going to have lots more company. Good luck on that, K. How many of you in SD read the story in the 'Green Sheet' by the guy who has tinkered with his pickup and fuels it with far higher % ethanol than is commonly used in vehicles not designed as flex-fuel frienly? Sounds intriguing. More serious efforts along those lines may be the silver lining in this high priced oil cloud.

MRJ
 

Econ101

Well-known member
MRJ said:
Econ, isn't the oil reserve the governments reserve of oil for emergency use, rather than the oil companies stockpile? That is the way I've read it. How about others?

Have you funded a cattle drive lately, Econ?

We do them each spring and fall. Not the "tourist" kind (thinking about it, for the right price we may consider taking a few tourists along), but to move our cattle from one area to another, from a just a few miles to 20 and 40+ miles. It doesn't come cheap....but is easier on cattle and maybe no more costly than transport by truck. We don't travel fancy....just old canvas tents, old team and chuckwagon with ordinary food cooked for supper and breakfast for the long drive, and some good local cowboys on horseback working loooonnng hours for the shorter ones.

It has been quite well established that it is the traders on the world wide stock exchanges who set the oil prices, not the oil companies. Who are the investors in oil companies, anyway. From what I've seen lately, there are lots of retirement pension plans, insurance funds, individuals' retirement accounts and other ordinary middle income people invested in them. High oil prices hurt me as much as anyone else living 30 miles from nearest doc, county seat, good grocer, and 120 miles from my city for major business, medical help, and shopping for everything from parts for ranch equipment to a new shirt or sox. Environmental extremists and NIMBY's like John Kerry and Ted Kennedy and those in CA who won't allow windfarms and other means of non-oil power, including coal extraction, or off-shore oil drilling and new refineries built. There are way too many government mandated hindrances to improved power and improved mileage on cars. This has got to end. Pres. Bush needs more, not less support in new, cleaner energy source development. We, the people need also to practice the common sense things we can do to cut our energy use. Katrina's family use of bio-diesel is going to have lots more company. Good luck on that, K. How many of you in SD read the story in the 'Green Sheet' by the guy who has tinkered with his pickup and fuels it with far higher % ethanol than is commonly used in vehicles not designed as flex-fuel frienly? Sounds intriguing. More serious efforts along those lines may be the silver lining in this high priced oil cloud.

MRJ

Yes, MRJ, it is a STRATEGIC petroleum reserve. Bush is doing a double face on allowing election year politics to affect it. I agreed with his assessment of it when running for president, and I don't agree with his 180 degree turn during HIS election year cycle (for Congress, that is). The news reports showed his campaign statement and then what is happening now. Pretty irrefutable. A clear case of say one thing and do another.

I don't think you can fault the oil companies totally for high energy problems of today. The Congress has dropped the ball on formulating an energy policy for the future. I had one Senator's staffer who was on the energy committee that they basically had the use it while you can policy. That does nothing for the long term energy needs of the nation. It is a short term policy that caters to detroit. We should have had higher fuel standards in the works a long time ago because it takes a long time for industries to tool up to these things. That is one of the reasons the Japanese got such a strong foothold on autos in the U.S.

I think they were saying we are spending 150 million on research on alternative energy (better enzymes for breaking down cellulose into ethanol). A pretty small drop in the bucket compared to recent oil patch profits (yes we still have those stocks and will benefit).

France uses nuclear power for 85% of their electrical needs. If we did that, we would have an oil glut. Ethanol takes anywhere from 80 to 95% of the energy produced to produce a gallon of ethanol. I have heard it said if you took all the corn production in the U.S., it would only make up 1/7 of the energy needed. It is not the best solution unless they make it a whole lot better than that. Right now it is just a cartoon band aid on a open gash. It is not going to solve the energy problems we will be facing.

On consumption, the U.S. uses somewhere between 22 and 23 million barrels of oil a day, China 5 million and India, 1.5 million, I believe. The big consumer is US. We needed to start the energy policy some years ago for the infrastructure we need today. Short term won over long term again. Same old story coming out of D.C. Those guys look for the next election, set up poor short term scenarios, then pander to the crisis ($100 rebates). The economist Pareto had it right, I think. The foxes have made a bit of a mess.

MRJ, I was joking about the cattle drive.
 

agman

Well-known member
Econ101 said:
agman said:
Tommy said:
Porker...I suppose Everyone else has to do their transportion for Free !!!



They don't count.

Are you not a member of the organization that tells its members they produce cattle not beef? Why would upstream costs concern you? Perhaps you can assist Porker in his effort to post a total transportation figure. I am certain you know the answer!!!

What is your point here, Agman? Everyone knows that higher oil prices will have an inflationary impact on an economy that has oil and its products as a base for its economy. Cattlemen are arguing that the extra costs of oil have to be absorbed by them and it reduces their profitability. Since they are price takers, and not price makers, this is a fact. Jason has already given us his spiel on decreasing his costs by driving less.

Short of having cattle drives again, energy will eat into everyone's profitability or cause inflation. This is the result of short sited "use it all up while we have it" mentality that has plagued the energy policy of the U.S. We have structural problems that take long term solutions to fix. All we have seen out of the energy policy is give outs to oil industry.

For instance, instead of giving tax breaks for finding more oil, which is what we had this last energy bill, why not take a different approach? How about taxing more if the companies DONT find more energy to replace their reserves and help out the economy? It is time that cattlemen stopped having to absorb all of the costs and that we have a national policy that allows economics of the energy business to work for the rest of us, not just oil companies.

Where did I say cost would not go up? A comprehension problem on your part once again-that is par for you. I showed what the current costs are associated with shipping a fed animal 500 miles at current shipping rates. If you want to figure the cost of shipping a calf or feeder to the feed yard first be my quest. That cost will be much less per head than a fed animal. The cost to transport finished product on a per head equivalent is even less. I will let you and Porker figure that one out.

The point is that Porker's claim of $150 per head transportation cost is way overstated. That comment alone tells me he knows very little about the total transportation cost structure. Thus, I am not surprised he has not answered with a cost breakdown per sector to back his claim.

I trust with your track record of phony accusations will soon revel that packers are responsible for the higher energy cost also. A scheme to drive their competitors out of business. They do cause the cattle cycle per your phony accusation!!! Yes, they control all of Mother Nature!!!!
 

Econ101

Well-known member
agman said:
Econ101 said:
agman said:
Are you not a member of the organization that tells its members they produce cattle not beef? Why would upstream costs concern you? Perhaps you can assist Porker in his effort to post a total transportation figure. I am certain you know the answer!!!

What is your point here, Agman? Everyone knows that higher oil prices will have an inflationary impact on an economy that has oil and its products as a base for its economy. Cattlemen are arguing that the extra costs of oil have to be absorbed by them and it reduces their profitability. Since they are price takers, and not price makers, this is a fact. Jason has already given us his spiel on decreasing his costs by driving less.

Short of having cattle drives again, energy will eat into everyone's profitability or cause inflation. This is the result of short sited "use it all up while we have it" mentality that has plagued the energy policy of the U.S. We have structural problems that take long term solutions to fix. All we have seen out of the energy policy is give outs to oil industry.

For instance, instead of giving tax breaks for finding more oil, which is what we had this last energy bill, why not take a different approach? How about taxing more if the companies DONT find more energy to replace their reserves and help out the economy? It is time that cattlemen stopped having to absorb all of the costs and that we have a national policy that allows economics of the energy business to work for the rest of us, not just oil companies.

Where did I say cost would not go up? A comprehension problem on your part once again-that is par for you. I showed what the current costs are associated with shipping a fed animal 500 miles at current shipping rates. If you want to figure the cost of shipping a calf or feeder to the feed yard first be my quest. That cost will be much less per head than a fed animal. The cost to transport finished product on a per head equivalent is even less. I will let you and Porker figure that one out.

The point is that Porker's claim of $150 per head transportation cost is way overstated. That comment alone tells me he knows very little about the total transportation cost structure. Thus, I am not surprised he has not answered with a cost breakdown per sector to back his claim.

I trust with your track record of phony accusations will soon revel that packers are responsible for the higher energy cost also. A scheme to drive their competitors out of business. They do cause the cattle cycle per your phony accusation!!! Yes, they control all of Mother Nature!!!!

Sometimes your posts are funny, Agman. You have a problem with interpreting exactly what I write, don't start thinking you have the ability to predict it.

As for calling what I have said lies or phony accusations, you have yet to prove that once. Your speculation as to their nature is just that. Do you think if you say it enough it will be true? Perhaps SH can loan you his ruby slippers.
 

PORKER

Well-known member
PORKER wrote:
Lets Talk about total transport costs from field to fork.


AGMAN,OK, since you made the suggestion please make a post to show all the transportation costs at each sector. Is that not want you want to talk about?

Since you are a member of the misled group who believes its members only produce cattle why would you worry up about upstream costs?!!!

Not a Member,Since I check on my calves everyday with the pickup and fix fence and haul feed the price rises.Next I pay $60.00 bucks for a fill up that last a week per 58 calves.20 weeks of fuel and sell them at auction.Tom buys them and hauls them to auction at Cambridge IND.Adds $15.00 bucks per head for the haul of 400 miles.Auction happens, then the buyer hauls to Grundy County Iowa which costs 12.00 bucks a head, 400 miles and their fed out with 2000 more head.Of course their is fuel used to feed them and haul feed in.Finally they reach 1100+ lbs. finished and are sold Direct to Omaha Packing,Another 240 miles and there home and slaughtered.Well the next trip is out the door as case ready meats to Boston and Albany on a PRIME reefer at $1500 loaded with no back haul,Add $600 more. Next the Wholesaler Kroger ships out to stores for a cost of $10.00 per hunderd of finished product delivery by union fleet drivers.

So you got a problem of Fuel Cost rising ?? Ranchers and Beef providers DO.High Fuel Costs affect us ,That every one in the food chain Agman,Field to Fork
 
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