The next question is will prices get low enough to start triggering liquidation. I know guys that paid over $3000 for bred heifers a couple years back. $500-$600 calves will take a long time to make that investment pay, and we aren't far away.
Long Term Effects of Blood Bath in Fed Cattle
- Thread starter Brad S
- Start date
Angus 62 said:
Those are the guys that will be hurt by this market.
I'm in enough disbelief of the drop from $2.00 to $1.75 or less on the rail to stop making predictions. It might be time to buy soon though and feed for the April Fat market?
Yes I think several bankers will force liquidation. I know of a local guy who loaded up on 2600-$3000 cows and he's about to starve to death now. But his current solution is to keep buying so he can lower his average. It's gonna get ugly for some before it's over.
Maybe even cheaper. Early in this thread, I thought the June fat deal was probably a safe buy in the !.04-1.05 range. Now, what is it? 97.75 - so much for my ability to forecast correctly.4Diamond said:
My biggest worry when we wonder how low it can go is what happens with a global recession/depression. The macro economy is a house of cards - not just in this country, but the whole world. Look at the Hanjin bankruptcy and some of the other global shipping. Things are bad and there's only so long that central banks and rosy forecasts from media and government agencies can prop things up. Personally, I don't see how we can even get through the first quarter without things getting ugly.
So...when we wonder how low they can go, we have to consider the possibility of a global meltdown that will make 2008 look like good times. I think we're close enough to that to measure the time in months instead of years. That could easily mean fats into the 70's.
I question how much of what is happening is fundamental (increasing cow numbers, competition from other protein sources, etc.) and how much is pure manipulation. We know the futures market is likely broken and has very little connection to reality any longer. We know there is little in the way of true market reporting. We know that captive supply cattle allow packers to stay out of the market for considerable periods which as much as anything puts a sense of panic in a downward market. I have a friend who is a banker and he says there really aren't as many cattle out there as the market seems to indicate. Even a year ago the projection was that it would take until 2018 for cattle prices to start serious decline. It is not like everyone in the beef business is losing money. Packer and retail profits are very healthy.
Big Muddy rancher
Well-known member
Here is a market report, Sold yearling strs Friday, These are Canadian dollars
780lbs at $186, Last year same weight at $284, the year before same wt $245.
Looks to me like the cattle market is experiencing reverse inflation. To bad machinery and taxes would have the same thing happen
780lbs at $186, Last year same weight at $284, the year before same wt $245.
Looks to me like the cattle market is experiencing reverse inflation. To bad machinery and taxes would have the same thing happen
Faster horses
Well-known member
Big Muddy rancher said:
OUCH!
Wish it had been better, BMR.
mytfarms
Well-known member
Gentleman I work around down here echo the same sentiment in terms of a disconnect between the cash market and the traders. A fairly big volume cattle buyer tells me the story they are selling is numbers are back up, but he says the timeline and the numbers he's seeing traded in the cash market aren't supporting that story. It's all algorithms driving the prices he thinks. That and government reports.
The more fiscal responsibility I assume, the more everything in the world feels like a Big Brother conspiracy. Kind of wonder if I'll see a milk cow and a garden being the only way to feed a family in my lifetime if this facade ever crashes.
The more fiscal responsibility I assume, the more everything in the world feels like a Big Brother conspiracy. Kind of wonder if I'll see a milk cow and a garden being the only way to feed a family in my lifetime if this facade ever crashes.
Brad S
Well-known member
I'm in enough disbelief of the drop from $2.00 to $1.75 or less on the rail to stop making predictions. It might be time to buy soon though and feed for the April Fat market?[/quote]
Truth!
It used to be conventionally thought that you didn't place steins without a market position - usually an actual contract, not a board position. Seems like you need an exit strategy to place
Truth!
It used to be conventionally thought that you didn't place steins without a market position - usually an actual contract, not a board position. Seems like you need an exit strategy to place
Mike
Well-known member
With corn down to around $3.30, calf prices down...........seems like a good year to retain ownership?
Big Muddy rancher
Well-known member
http://calgaryherald.com/business/local-business/western-feedlots-shutting-down-canadas-biggest-feeder-blames-headwinds-in-cattle-industry
Mike
Well-known member
That's going to hurt, BMR.
perfecho
Well-known member
Spoke to a fellow who used to work there...says the writing has been on the wall for awhile...but they have to blame something....