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Largest impact on cattle prices?

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The largest impact to cattle prices ************************************************
The Canadian dollar was just short of $1.04 in late New York trading. The "loonie" was worth $1.0392 late in New York, almost half a cent more than the $1.0347 it bought Thursday.

The Canadian dollar, a commodity-backed currency, first achieved modern-era one-to-one parity with the U.S. dollar on Sept. 20. The U.S. dollar has fallen 17.5 percent against the Canadian loonie this year. Canada is a major exporter of oil, benefiting when those prices rise.

"The fundamentals (behind) that drive appear to be solidly in place and will likely fuel the Canadian dollar higher in 2008," said Michael Woolfolk, senior currency strategist at the Bank of New York. "If this continues for another year, there will be growing concerns about the currency's valuation."
 
Q, "Bull$hit any organization i am part of you can get a membership list from without belonging to it. Just go to goverment of canada website and under the freedom of imformation act with the canadian federal government ALL non-profits have to submit membership lists every calender year. "

Well then, you just go to that website and get that list. :lol: :lol:
 
Too bad you so called experts haven't been responsible for a feedlot one of my former careers in agriculture. If you want to know more about me Degree in a AG. I have managed ranches Pb and commercial in Canada and the US and worked in feedlots for 15 years starting as a pen rider after graduation university and working up to managing a 18000 headlot i know not the biggest but i made the calls on millions of dollars of cattle and now have a consulting business , usally i work on contract for creditors and right the ship so it won't sink that is why i disappear for blocks of time, some financial instituion had hired me to to my thing. So yeah my views may be extreme but, major financial instituions and debt resolution companies use my services. i do have valid points no matter what some old horse trader thinks he knows about the beef business. Yeah i want to put out my real adress and have some nut come after me, I just look at OT and someone was cutting his fence he even blamed me when i said it was stupid to be so out there and not care that people could track him and his family down. As far as i know Sand H is in some detention center for the ciminally insane. Yeah i want to tell someone like that where i live and what my adress is maybe even where and when i am home so he can come and do what ever he wants to my place. I would warn people on here about being to open with your personal imfo but you guys will have to learn the hard way . Just explain how you can get e-mail from yourself that you didn't write. You guys don't realize the bad side of this internet and you can have all the security you want if someone wants in they can hire some 14 yr old hacker to get all your personal imfo and mess with you. Funny thing is hundred thousands of beef producers in the US and who speaks for r-calf on this site 3 guys mainly OT, SH and HM. Have fun :roll:
 
Question, I am really trying to understand where you are coming from to find some sort of common ground in reasoning. Maybe you could help me.

You are saying that corn has been real low because of subsidies and that has helped U.S. cattle prices (I am only guessing) relative to Canada.

Didn't Canadians have the same right to buy that corn from the United States? If so, what is your argument?

I am not trying to be disrespectful or anything, I am just trying to understand your points.

I will admit I didn't read all of your and Sandhusker's slugfest so I might have missed your points.
 
I think Question has point with regard to U.S. subsidies affecting feed grain prices, and thus the cattle markets. However, with grain prices where they are at the present, the subsidies are no longer a strong factor, other than that U.S. corn, even at an unsubsidized, free-market price, is suppressing the local price of barley. The joys of inter-regional trade . . . . .

But when the corn market was languishing in the sub-$2.00 range, the guaranteed floor price (LPD) insulated the corn producer from the real market demand/value of his/her product, and production was not discouraged, even though the price signalled otherwise. The U.S. was awash in piles of subsidized corn. This bountiful, stable supply of product encouraged growth in any sectors that used corn, including the cattle industry.

How this affected the cattle market was that the feeder sector had access to a good, stable supply of underpriced grain. By underpriced, I mean that the purchase price of corn did not reflect the true cost of production.

As far as the Canadian feeder buying that subsidized U.S. corn, many did, much to the dismay of the Canadian corn producer who does not have access to the trade distorting subsidies available to the American growers. Many times, we corn growers would be sitting with bins full of below-cost-of-production corn while trucks hauling cheaper, U.S. gov't subsidized U.S. corn went past our doors.

So now that feed grain prices are actually at a level that is profitable for the grain producer (without government subsidies), what does it mean for a beef industry that has been built on 10 years of artificially low-priced feed supplies? Feed supplies, I might add, that were essentially a captive supply for them?

Not good news. It means a painful period of adjustment while production systems readjust to reflect the present market conditions. The cattle growers now have to buy the grain they need at values that reflect a decent return for the grain growers. The cattle industry is no longer the indirect beneficiary of the U.S. farm bill system of subsidization. Ouch.

Whoa, now we have another buyer in the market for grains, and that buyer just happens to be able to pay more for that supply than the cattle feeder can afford. And for the sake of this discussion, just forget the fact that the new bidder (ethanol) is also a heavily subsidized industry :lol2: :lol2: :lol2:.

Oh the joy of government intervention.
 
Tex fact is corn is cheaper to feed than barley on cost of gain it is cheaper than barley domestically let alone the cash and world market at this point in time. The point i was trying to make was with corn stocks so high in the US and having a lower cash value than barley it gives a advantage to US cattle feeders. Thus the margins are wider for the US feeder compared to a canadian feeder due to corn prices, lower labour costs and devalued US dollar. I am sure OT and sandH will find something they disagree with so i must be wrong as is the rest of the world in their eyes.
MLA the kind of rational discussion i wanted, good points. Obvioiusly with LDP not being activated it is not a subsidy, but DP's and MAL programs being used i see them as farm support programs also known as subsidies. Just like the CRP land being allowed to be hayed in certain areas in the US. A farmer sets land aside gets a payment then is allowed cut they hayand doesn't have to pay the payment back . What every, the US sets it own rules i will quietly wait until someone smaks them again like the OIE did.
 
Just like the CRP land being allowed to be hayed in certain areas in the US. A farmer sets land aside gets a payment then is allowed cut they hayand doesn't have to pay the payment back
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I don't have any CRP, but understand you don't get full payment for the CRP which is crappy hay and grass by the time the government lets you use it.
BOZEMAN-- The severity of the ongoing drought prompted the Farm Service Agency (FSA) of the USDA to apply for emergency grazing of Conservation Reserve Program (CRP) acreage in 25 Montana counties. The applications were forwarded to the Secretary of Agriculture, who must approve CRP emergency grazing.

Once a county is approved for CRP emergency grazing, those who intend to graze livestock on CRP lands must seek a determination of eligibility from their local FSA office and then work with their Natural Resources Conservation Service (NRCS) office to specify an emergency grazing plan.

Eligible livestock producers in approved counties will be required to leave 25 percent of each field or contiguous field for wildlife benefit or graze no more than 75 percent of the NRCS-documented stocking rate. Contract holders will be assessed a 25 percent reduction in their per-acre CRP payment for those acres involved in emergency grazing.

Jim Johnson, an economist with the Montana State University Extension Service, said producers often wonder about the cost per Animal Unit Month (AUM) when CRP land is grazed.

He gives the following examples: If a grass species planted on CRP land that yields 0.50 AUMs per acre under drought conditions is adjusted to 75 percent of the stocking rate (0.50 x 0.75), the yield is 0.375 AUMs of grazing on the CRP acre. A producer who receives a CRP rental rate of $36 per acre would see a 25 percent reduction in payment: $9 per acre. The implied AUM cost of grazing on this CRP land would be relatively expensive: $24, ($9 divided by 0.375).

A grass species that yields 1.00 AUMs per acre under drought conditions, adjusted to the 75 percent stocking rate, would effectively yield 0.75 AUMs per acre at a cost of $12 per AUM if 25 percent of the $36 per acre CRP payment was foregone. This AUM cost is relatively inexpensive compared to recent Montana private lease AUM charges, but the livestock producer may incur fencing and livestock watering costs on CRP land.

By using an AUM cost estimate for the emergency grazing of CRP, livestock producers who decide to retain livestock can assess whether there are feed alternatives that may be less costly than grazing CRP. Johnson said a free publication offers more information on AUMs per acre by grass species and how to estimate AUM costs. The publication, called Briefing No. 28 "CRP Rental Rate Reductions for Emergency Grazing" is available at local MSU Extension Service offices or on the Web at http://www.ampc.montana.edu.
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I personally don't think they should even have CRP programs.
 
Good points Maple Leaf. Too bad we can't grow more corn here in western Canada Question. Subsidized or not, our climate gives us that disadvantage.

Personally however, I believe that the largest impact on cattle prices in Canada is the control we have given up to two multinational packers, and the fact that we continue to let them dictate where and when we sell beef. If we do not take back that control from these pirates, we may have to scramble to supply our domestic markets let alone have the potential to export our wonderful product to folks who need it all over the world.
 
I don't pretend to understand all the politics and marketing for the big boys so maybe someone can educate me on all of this.
My question is - if there is such a high global demand for beef and if the foriegn countries, including Canada, can and want to import beef here to the USA, and with our high grain prices to feed out cattle it makes no sence. Just what global market are we trying to fill if beef can be imported here for $.70/lb and if there is such a good global market why would they (other countries) want to import here??
 
cutterone said:
I don't pretend to understand all the politics and marketing for the big boys so maybe someone can educate me on all of this.
My question is - if there is such a high global demand for beef and if the foriegn countries, including Canada, can and want to import beef here to the USA, and with our high grain prices to feed out cattle it makes no sence. Just what global market are we trying to fill if beef can be imported here for $.70/lb and if there is such a good global market why would they (other countries) want to import here??
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Good points Maple Leaf. Rkaiser, you hit the nail on the head. Producers are geographically located. Processors in their selling chain are not. They are global and they take advantage of currency exchange fluctuations to maximize their market share and profit, not the producer's .

Who is buying your grain? Obviously it is more than just cattle feedlots otherwise the grain price would reflect the demand from them only.

Question, the exchange rates are now swinging back. Things that make a weak dollar (falling dollar) include over spending (deficits funded by other countries mitigates this) and printing of money.

These are two things producers have as huge market risks in a global economy. They in no way are under the control of the producer.

Canadian producers are seeing the slide in the value of their product in purchasing power when selling to the U.S. in terms of Canadian money when the dollar falls. Corn and other commodity prices are a part of that mix. Let us say the dollar is at 70 Canadian cents and over a little time reaches $1.00. The costs of corn in Canadian terms just went up about (I am using rough math in both conversions for simplicity) 30% as it now takes one Canadian dollar to buy what 70 cents would have been before.


The 33% rise in the price of corn rising to $3.00 from $2.00 was offset by the exchange rate change.

Canadian barley, you are saying, went up also. Obviously there is another market for Canadian barley than Canadian cattle feeding. Who buys this Canadian barley besides feeders? Did you have any supply shocks (reduced production) that may have caused the increase in barley prices? Is there a world market for barley or just a feeder market?

By the way, the high cost of oil is similar. That is one reason it is going up. It is denominated in dollars and the dollars are sliding, making them worth less. Since oil is a world commodity, the sliding dollar only makes it more expensive to U.S. manufacturers relative to other economies.


The international exchange rate risks affect the average producer--no matter where you are-- if you are operating in a global economy. I believe these risks to producers is great and beyond their control. Canadians are feeling that right now as their cattle are priced largely in dollars and it is sliding relative to their currency.

Geographically stuck suppliers don't make the money with widely fluctuating currencies. Those who can sell those supplies overseas to various countries do.

Mandatory Country of Origin Labeling will allow more people to see when the retail chain is making some of their money off of this process.

Rkaiser is right, if Canada remains a captive market for beef for the USA, producers in Canada will remain most affected by exchange rate changes between the two countries, good and bad.
 
rkaiser said:
Good points Maple Leaf. Too bad we can't grow more corn here in western Canada Question. Subsidized or not, our climate gives us that disadvantage.

Personally however, I believe that the largest impact on cattle prices in Canada is the control we have given up to two multinational packers, and the fact that we continue to let them dictate where and when we sell beef. If we do not take back that control from these pirates, we may have to scramble to supply our domestic markets let alone have the potential to export our wonderful product to folks who need it all over the world.
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O poor you! Waa Waa. Not to long ago on this site all the Canucks were shitting on US cornfed beef saying their barley fed beef is FAR superior, now their saying it's a shame they can't feed corn. Keep your "wonderful" product up there and do less bitching about the US cattle industry and more about fixing your BSE catastrophe.
 
Keep working and studying buddy boy. You don't seem to be making much progress in the development of your brain capacity.
 
Work Hard and Study Hard said:
rkaiser said:
Good points Maple Leaf. Too bad we can't grow more corn here in western Canada Question. Subsidized or not, our climate gives us that disadvantage.

Personally however, I believe that the largest impact on cattle prices in Canada is the control we have given up to two multinational packers, and the fact that we continue to let them dictate where and when we sell beef. If we do not take back that control from these pirates, we may have to scramble to supply our domestic markets let alone have the potential to export our wonderful product to folks who need it all over the world.
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O poor you! Waa Waa. Not to long ago on this site all the Canucks were shitting on US cornfed beef saying their barley fed beef is FAR superior, now their saying it's a shame they can't feed corn. Keep your "wonderful" product up there and do less bitching about the US cattle industry and more about fixing your BSE catastrophe.
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"All the Canucks", eh?

One of the first indicators of a very weak position -argument- mind is the use of broad generalizations . . . . . :wink:
 
The high barley price has a few causes. One is the high price for feed barley on the export market , what can we say other countries are falling in love that barley fed taste. Another is the percieved biofeul market raising furtures prices thus driving up spot prices by speculators. The barley prices will come down as more Southern Ab. cattle feeders import corn. The price of corn is lower and higher in energy so better cost/gain ratio. One potential problem could be the down grades due to the old looking yellow fat but smart feeders will have enough barley in the ration to keep the fat fairly white or pale yellow enought not to lose grades. As corn is coming into Canada i wonder if US corn producers will be recieving export subsidies.
As for the Canadian dollar falling that is not happening any time soon, oil prices are going up and our canadian economy is going strong. Forecasts from chief economists say canadian dollar will be at $1.10 US early in the new year and keep going with the prices of oil. As for your conversion you are kinda lost it used to cost a candian $1.25 to get a buck US of US product. Now it cost a canadian 96 cents to get a US dollar of product so essential the price of corn went down a 3rd not up.
Cuttertone the concept you fail to grasp is that the US can not produce enough beef to fulfill it's domestic market. So it isn't that other countries want to sell into to the US but that the US goes outside it' borders and buys. So you options are pretty simple. 1- stop exporting or trying to export any beef and sell US produced beef at lower prices thus lowering the returns to US ranchers. 2- Lose market share to other meats like chicken and have lower returns for US cattlemen. 3.- Import from other countries to fulfill deficite in beef and keep market share and prices up. The reason canadian feeder cattle are being exported to the US is that the US peso is falling and thus with the cost of feed grains (corn) and labour being lower gives the US a advantage. Much like it did the canadian manufacturing sector for years. So do not complain canada is helping get the US economy on track you can thank canada later.
 
As for the Canadian dollar falling that is not happening any time soon, oil prices are going up and our canadian economy is going strong. Forecasts from chief economists say canadian dollar will be at $1.10 US early in the new year and keep going with the prices of oil. As for your conversion you are kinda lost it used to cost a candian $1.25 to get a buck US of US product. Now it cost a canadian 96 cents to get a US dollar of product so essential the price of corn went down a 3rd not up.
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You made my point. It did cost 1.25 to get corn and now you get it at .96 on the dollar.

My point was that corn didn't really change in your terms when looking at corn going from U.S. $2.25 to $3.00/ unit--bushel in this case. In both cases you still paid (1.25 x 2.25) $2.81 vs. (.96x3.00)$2.88 for corn, a negligible real difference in Canadian terms while U.S. producers went from 2.25 to 3.00 (all figures for illustrative purposes).

You are saying your barley price went up. That means that barley is not only used domestically in Canada for feeding cattle but also for other markets.

These swings in the market are things the global traders can benefit from but not necessarily the producers. It has to do with making all markets global with the big guys on the top arbitraging the dollar with their commodity sales.

It is not in the producer's benefit---it is in the globalist trader's benefit.
 
Tex carefully read that post the way it was worded it appered that your were saying corn would cost more with the higher canadian dollar. But as i explained it costs less in US dollars and you agreed so i am thinking you got tangled up in the wording. As for feed barley yes the CWB was offering more than $4 per Bu. And that ran the price up as much as anything. But Barley prices are still bouncing like a rubber ball from 3 to 4 bucks a bu. pretty volatile. So making profits will be made with timing as much as skill. Today i bought up some 47 lb. tough baley for 3.10 /bu. when dry it will be 46 lb./bu so i'll add a small % cps wht i grew and then i can sell it feedlot dierct at 48 lbs and make a tidy profit. As for my own cattle i have enought oats and hay to get them thru the winter but i'm looking at buying more cows the avg. bred is trading in that $500 range if a guy can't make $ at that price for a cow and calf prices where they are at now they are really doing something wrong. I just feel bad for the guys who bought high dollar bred heifers and cows. But there is risk in any business and maybe i am a pecimist when it comes to the profits that can be made on cattle. But usally i do better than i worked it out on paper. I don't want to be mean or rude but what were guys thinking buying bred cows for $1300/hd the past few years. I can understand getting caught with cows bought before bse was found but since those guys only have themselves to blame.
 
Well Question, I hope that you do well and things continue to work out for you.

But I would be very, very careful about badmouthing your fellow producers for the business decisions they made. They did the best they could with the knowledge they had at the time.

Just like you are doing. So you never know when your turn at the bottom might come. And there are few things more bitter than having to eat your words.
 
QUESTION said:
Tex carefully read that post the way it was worded it appered that your were saying corn would cost more with the higher canadian dollar. But as i explained it costs less in US dollars and you agreed so i am thinking you got tangled up in the wording. As for feed barley yes the CWB was offering more than $4 per Bu. And that ran the price up as much as anything. But Barley prices are still bouncing like a rubber ball from 3 to 4 bucks a bu. pretty volatile. So making profits will be made with timing as much as skill. Today i bought up some 47 lb. tough baley for 3.10 /bu. when dry it will be 46 lb./bu so i'll add a small % cps wht i grew and then i can sell it feedlot dierct at 48 lbs and make a tidy profit. As for my own cattle i have enought oats and hay to get them thru the winter but i'm looking at buying more cows the avg. bred is trading in that $500 range if a guy can't make $ at that price for a cow and calf prices where they are at now they are really doing something wrong. I just feel bad for the guys who bought high dollar bred heifers and cows. But there is risk in any business and maybe i am a pecimist when it comes to the profits that can be made on cattle. But usally i do better than i worked it out on paper. I don't want to be mean or rude but what were guys thinking buying bred cows for $1300/hd the past few years. I can understand getting caught with cows bought before bse was found but since those guys only have themselves to blame.
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I am glad you asked, Question. I rarely re read my own posts. Sometimes I could say things a little better and more understandable. I'm not going to re read that post, you are probably right that I got tangled up in my words or my words to other's understanding. Thanks for allowing me to clear it up.

You are right, what I meant to say was that the higher Canadian dollar makes corn about the same price even with the run up in corn prices in the U.S. Corn was your non domestic product. Barley isn't.

I hope you do well on your deal. In a global market, there are so many more things to have to figure out. Most of the time, the small producer doesn't have the time or the means to figure it out. They are busy with their cattle.
 
MLA Don't get me wrong i don't want to see guys going out of the beef business and i don't want to badmouth other producers but i think it is time that guys relize that the average cow only generates about $ 100 - $150 of net profit per year. Or that is what i get when i do the math granted i have a fairly expensive animal health and feeding program. So i just can't make the math work on a $1300 commercial cow , Say i buy her as a 2nd calver bred early and get 6 good calves out of her. That is $900 and a salvage of $325 - $350 when i cull her that totals 1250 how do i pay the bank back the 1300 i would have to borrow to buy her let alone the interest and i need to eat too. So excuse me if i sound heartless to the plight of some cattlemen. My heart is for my family, my brain and my balls is for business and i most definitely in the beef business. So i do the math now and $500 2nd and 3rd calvers look awesome If i can get 6 calves out of them and even at the current prices I net $100 per cow by the time i cull her i am really making the dollars. Please MLA can you show me the math that a 1300 dollars cow is profitable for her owner, even with prices from last fall the magins for the high dollar cow was pretty tight. If you can show me where my math is flawed i will admit that those high dollar cows are worth it.
 
Question,nobody gets into this business without working things out on paper,you seem to be under the impression your the only one that figured that little detail out.Like MLA said be careful,very careful when your putting your fellow cattle producers down...remember the old adage of walking a mile in anothers shoes :)
 

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