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Mike

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I see in today's USDA beef cutout prices that:

Ground Beef Chuck (10 lb Chubs) are selling for $133.19 per cwt.

Chuck Shoulder Clods are selling for $127.16 per cwt.

Are you sure we don't need this cheap lean trim coming in from Uruguay, etc to make our fat more valuable? :lol: :lol: :lol:

http://www.ams.usda.gov/mnreports/lm_xb403.txt
 

Sandhusker

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Hmmmmm, that's interesting, to say the least! I wonder if a person could find a historical on the relationship between the prices of the two to find out if this is an anomaly, if it is seasonal, or if it reflects a generality.

BTW, can't they come up with a little more appetizing name than a "chub" or a "clod"? "Man, I'm starving, I could sure go for a clod!" or "I'm having a little get-together this weekend, gonna grill up a chub, come on over" just doesn't have much shine on it.
 

PORKER

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What 's interesting is that Beef ,cattle and calf prices went into the tank starting last week. Must be the grilling season is half over. That can't be ,or is it the packer imports are soooo much cheaper! Can't be the Canadians as their money almost matches ours.
 

QUESTION

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Try top get it right every once and a while, don't blame the drop on calf prices on canada when ethanol production is ramping up. Feed stocks consumed by cattle are decreaseing thus in creasing the price to feed out a calf thus to maintain a profit margin calf prices must go down. So thank you to BUSHY for the drop in cattle prices for trying to make more feul. i am sure you would rather dirve around for a few hours rather than have a tasty steak.
 

Texan

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Mike said:
I see in today's USDA beef cutout prices that:

Ground Beef Chuck (10 lb Chubs) are selling for $133.19 per cwt.

Chuck Shoulder Clods are selling for $127.16 per cwt.

Are you sure we don't need this cheap lean trim coming in from Uruguay, etc to make our fat more valuable? :lol: :lol: :lol:

http://www.ams.usda.gov/mnreports/lm_xb403.txt
Mike, this really points out the need to add some lean to the grind. That wasn't your intent, I know. :lol: In your example, it only adds $6/cwt to the value of a clod to grind it and package it. That's a measly six cents a pound for grinding and packaging. Not exactly a windfall.

But, if you'll look further into the report, you'll see that 93% lean ground is valued at $166.90 - $33/cwt higher than the ground chuck. That's a pretty impressive difference. I'm not suggesting that we try to blend enough lean with a clod to get it to 93%, but it's obvious that adding more lean into the grinder with those clods will really boost their value more than grinding alone.

You and I both know that consumers want leaner ground beef than we are producing right now. We need to fix that. I don't care how we do it - I'd rather do it without the imports, too - but we need to figure it out and figure it out quick. This yield grade problem has been getting worse for 10 years, or more. Considering how fast we're turning the nation's cowherd black, it looks to me like the genetic fix to produce leaner carcasses is a long way off.
 

Econ101

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Texan:
Mike, this really points out the need to add some lean to the grind. That wasn't your intent, I know. Laughing In your example, it only adds $6/cwt to the value of a clod to grind it and package it. That's a measly six cents a pound for grinding and packaging. Not exactly a windfall.

But, if you'll look further into the report, you'll see that 93% lean ground is valued at $166.90 - $33/cwt higher than the ground chuck. That's a pretty impressive difference. I'm not suggesting that we try to blend enough lean with a clod to get it to 93%, but it's obvious that adding more lean into the grinder with those clods will really boost their value more than grinding alone.


Texan, lean trimmings come from trimmings that have varying amounts of fat and so do the primal cuts. In the cattle I have slaughtered, they always trim the cuts out and add the trim to the ground beef.

The price per lb. in the store is very different than the wholesale amounts that you see in the report.

Lean trimmings from other countries just adds imported meat for ground beef from those countries. Not only do those lean trimmings have to come off all those (multiple) carcasses which increases the risk of one carcass contaminating all the others, but they have to be transported. With all the spoilage issues relating to ground beef, I would much rather have trimmings come from the US instead of Brazil or South America or even Australia. These lean trimmings surely are not scrutinized as to their safety---the USDA doesn't even do it for our domestic industry.

I for one want the choice at the grocery counter to make the decision whether or not I want these risks, which are not well regulated, when I buy ground beef.

Texan, here is an article on cow cut out. As you will notice, they cut out the middle cuts for increased value and much of the rest goes to the grind. You can have cows too fat or too thin for maximum profitability.

http://tinyurl.com/28taz7
 

Econ101

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QUESTION said:
Try top get it right every once and a while, don't blame the drop on calf prices on canada when ethanol production is ramping up. Feed stocks consumed by cattle are decreaseing thus in creasing the price to feed out a calf thus to maintain a profit margin calf prices must go down. So thank you to BUSHY for the drop in cattle prices for trying to make more feul. i am sure you would rather dirve around for a few hours rather than have a tasty steak.

Question, increasing feed prices for those cattlemen who grow their own feed increases their bottom line. The point you raise here is for the current system of large feed lot systems that buy cattle that need to be fed with cheap corn that is not grown by those feedlots. I would much rather see the higher feed costs go to producer's bottom line than the factory farming that has made it on cheap feed.
 

Econ101

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Import Values for Australian and New Zealand Beef

DES MOINES - Jun 15/07 - SNS -- Report on import market values for beef

coming into the United States from New Zealand and Australia.

IMPORT BEEF TRADE

Compared to Last Week: Import lean boneless beef prices were steady.
The sharply lower domestic boneless processing beef market on all lean
percentages caused trading to halt as the spread domestic and import
closed. Offerings from overseas were light to moderate, while spot
delivery supplies remain moderate.



AUSTRALIA AND NEW ZEALAND - FOB AND TIS
0-15 Days
BULL MEAT: East Coast West Coast
95% 144.00- 146.00
COW MEAT:
95% 141.00- 142.00
90% 131.00- 132.00
CFM Fores 85%
Shank 85-90% 129.00
Chuck 85%
Beef Trim 85% 123.00
Beef Trim 80%
Beef Trim 75%
Beef Trim 70%
Beef Trim 65% 89.00
100 % LEAN:
Top Rounds
Flats & Eyes
S.P.B.
16-45 Days
BULL MEAT: East Coast West Coast
95% 146.00 146.00
COW MEAT:
95%
90% 131.00
CFM Fores 85%
Shank 85-90%
Chuck 85%
Beef Trim 85%
Beef Trim 80%
Beef Trim 75%
-----------------------------------------------------------------------------
URUGUAY - FOB AND TIS
BULL MEAT: 0-15 Days 16-45 Days
95% 142.00 142.00
COW MEAT:
95%
90% 132.00 132.00
CFM Fores 85% 123.50 123.50
Beef Trim 85% 123.00 123.00
Beef Trim 80%
Beef Trim 75% 106.00 106.00

Source: USDA Market News, Des Moines, IA

---
 

Bill

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Econ101 said:
Question, increasing feed prices for those cattlemen who grow their own feed increases their bottom line. The point you raise here is for the current system of large feed lot systems that buy cattle that need to be fed with cheap corn that is not grown by those feedlots. I would much rather see the higher feed costs go to producer's bottom line than the factory farming that has made it on cheap feed.

How does that increase their "bottom line"?


Are you telling us that high feed prices are positive for the cow/calf producer.
 

Econ101

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Bill said:
Econ101 said:
Question, increasing feed prices for those cattlemen who grow their own feed increases their bottom line. The point you raise here is for the current system of large feed lot systems that buy cattle that need to be fed with cheap corn that is not grown by those feedlots. I would much rather see the higher feed costs go to producer's bottom line than the factory farming that has made it on cheap feed.

How does that increase their "bottom line"?


Are you telling us that high feed prices are positive for the cow/calf producer.

Depends on if you raise the feed or not.
 

Bill

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Econ101 said:
Bill said:
Econ101 said:
Question, increasing feed prices for those cattlemen who grow their own feed increases their bottom line. The point you raise here is for the current system of large feed lot systems that buy cattle that need to be fed with cheap corn that is not grown by those feedlots. I would much rather see the higher feed costs go to producer's bottom line than the factory farming that has made it on cheap feed.

How does that increase their "bottom line"?


Are you telling us that high feed prices are positive for the cow/calf producer.

Depends on if you raise the feed or not.

How does high feed prices increase their bottom line if they don't SELL the feed. It may give them a short term advantage against other feeders but their cost of production is also greatly higher to produce that grain now than 5 years ago and my understanding of the term "bottom line" is PROFIT.

You're the self proclaimed economist...explain what you mean. All of us who are actual producers (who still bother to come back to this site now and then) are interested in how to make tons of money from an armchair quarterback such as yourself with all your experience and insight.

And once again are you trying to tell us that high feed prices are postive for cow/calf producers?
 

Econ101

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Bill said:
Econ101 said:
Bill said:
How does that increase their "bottom line"?


Are you telling us that high feed prices are positive for the cow/calf producer.

Depends on if you raise the feed or not.

How does high feed prices increase their bottom line if they don't SELL the feed. It may give them a short term advantage against other feeders but their cost of production is also greatly higher to produce that grain now than 5 years ago and my understanding of the term "bottom line" is PROFIT.

You're the self proclaimed economist...explain what you mean. All of us who are actual producers (who still bother to come back to this site now and then) are interested in how to make tons of money from an armchair quarterback such as yourself with all your experience and insight.

And once again are you trying to tell us that high feed prices are postive for cow/calf producers?


Bill, they do sell the feed ony it is on the hoof. As feed prices go up, the cost of raising hogs and chicken will go up. Tyson has already said poultry prices were going to increase. As the substitutes go up, so will beef. It might be that cattlemen can keep their cattle longer as backgrounders. When only cattle feed goes up in the very short term due to erratic yearly production, your point will be well taken.

We are going to have a longer term trend, especially if corn prices stay high, as it seems they will, for cattlemen to put as much lbs. on that set of hooves as they can before selling. Higher feed prices will mean that cattle are on feed less and on grass more. Feed out will be shortened. It is a long term trend that has started.
 

Sandhusker

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Bill said:
Econ101 said:
Bill said:
How does that increase their "bottom line"?


Are you telling us that high feed prices are positive for the cow/calf producer.

Depends on if you raise the feed or not.

How does high feed prices increase their bottom line if they don't SELL the feed. It may give them a short term advantage against other feeders but their cost of production is also greatly higher to produce that grain now than 5 years ago and my understanding of the term "bottom line" is PROFIT.

You're the self proclaimed economist...explain what you mean. All of us who are actual producers (who still bother to come back to this site now and then) are interested in how to make tons of money from an armchair quarterback such as yourself with all your experience and insight.

And once again are you trying to tell us that high feed prices are postive for cow/calf producers?

A wise man once said, "Cheap corn makes cheap cows"
 

Bill

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Econ101 said:
Bill said:
Econ101 said:
Depends on if you raise the feed or not.

How does high feed prices increase their bottom line if they don't SELL the feed. It may give them a short term advantage against other feeders but their cost of production is also greatly higher to produce that grain now than 5 years ago and my understanding of the term "bottom line" is PROFIT.

You're the self proclaimed economist...explain what you mean. All of us who are actual producers (who still bother to come back to this site now and then) are interested in how to make tons of money from an armchair quarterback such as yourself with all your experience and insight.

And once again are you trying to tell us that high feed prices are postive for cow/calf producers?


Bill, they do sell the feed ony it is on the hoof. As feed prices go up, the cost of raising hogs and chicken will go up. Tyson has already said poultry prices were going to increase. As the substitutes go up, so will beef. It might be that cattlemen can keep their cattle longer as backgrounders. When only cattle feed goes up in the very short term due to erratic yearly production, your point will be well taken.

We are going to have a longer term trend, especially if corn prices stay high, as it seems they will, for cattlemen to put as much lbs. on that set of hooves as they can before selling. Higher feed prices will mean that cattle are on feed less and on grass more. Feed out will be shortened. It is a long term trend that has started.

The ONE distinction we have in North American beef is a HIGHER priced product that is a quality eating experience. This is created by GRAIN fed beef that is harvested at a younger age.

Yes I have had some very good grass fed beef in various countries but I have also had some real crap. If you think we can compete in the grass fed market against South America especially given the new regualtions with over 30 month animals you are dreaming in technicolor.
 

Bill

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Sandhusker said:
Bill said:
Econ101 said:
Depends on if you raise the feed or not.

How does high feed prices increase their bottom line if they don't SELL the feed. It may give them a short term advantage against other feeders but their cost of production is also greatly higher to produce that grain now than 5 years ago and my understanding of the term "bottom line" is PROFIT.

You're the self proclaimed economist...explain what you mean. All of us who are actual producers (who still bother to come back to this site now and then) are interested in how to make tons of money from an armchair quarterback such as yourself with all your experience and insight.

And once again are you trying to tell us that high feed prices are postive for cow/calf producers?

A wise man once said, "Cheap corn makes cheap cows"

That could be as I don't know the context in which he spoke but anyone who has been directly involved in this biz KNOWS that expensive feed grain makes for lower priced calves and lower priced calves most definitely leads to lower priced cows.

DDGs have a greater chance of offsetting the increased cost of feeding than trying to switch to grass fed beef.
 

Sandhusker

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Cheap corn makes the grass weight worth more. 940# yearlings in Valentine sold for $111 last week. That's cutting a fat hog.
 

Sandhusker

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don said:
so would the price of those cattle be higher or lower if corn prices were lower?

You can't say for sure because there are many factors that go into cattle prices, but one thing that we do know is that high corn prices are casting a pretty big shadow over all of agriculture right now. However, put yourself in the shoes of a feeder and ask yourself if you would rather pay to put on 600 lbs or 300 lbs. of corn weight.
 

don

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lousy diversion. i thought you were talking about corn prices and leaving all other factors constant. don't you think if cost of gain is lower competition for the animal would raise prices for feeders of whatever weight?
 

Econ101

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See what the lower costs of corn have done for the poultry companies, your main competitors:


Sector Snap: Meat Producers
Associated Press 06.29.07, 10:24 AM ET

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Meat producer shares rose Friday after the Department of Agriculture said the number of acres of corn planted by farmers this year will be higher than expected, raising hopes that the price of corn - a key food for cattle - may drop.

In the crop acreage report, the USDA estimated that 92.9 million acres will be planted in 2007, a rise of 19 percent from 2006. The number is also 3 percent higher than the department's initial guess in March of 90.5 million acres.

The earlier estimate came from farmers who estimated how many acres they intend to plant. Friday's report gives the number of acres farmers actually planted.

The number is the biggest U.S. corn planting since 1944 when 95.5 million acres were planted.

Meat producers have been awaiting the report to see if an increase in the number of acres planted will help drive down skyrocketing corn prices.

The price of corn, which meat producers use to make animal feed, has soared recently as demand increased for the alternative fuel ethanol, which is also made with the grain.

The higher costs have forced meat producer Tyson Foods Inc. (nyse: TSN - news - people ), pork producer Smithfield Foods Inc. (nyse: SFD - news - people ) and chicken producer Pilgrim's Pride (nyse: PPC - news - people ) Corp. to either raise prices on meat or warn that an increase may be inevitable.

But even if corn prices fall, producers may still take a hit if soybean prices rise significantly - a good possibility given that the report estimated that the number of acres of soybeans is down 15 percent from last year, said Greg Wagner, director of marketing risk management for Horizon Ag Strategies, a brokerage for grain and livestock commodities.

Wagner called the drop in soybean acreage "a very, very acute situation," and if the crop is threatened by unfavorable weather in the next few months during the pollinating season, the price could climb.

Soybeans are also used to make animal feed.

Tyson shares climbed 9 cents to $23.33 in morning trading while Smithfield Foods shares rose 16 cents to $31.03.

Pilgrim's Pride shares rose 39 cents to $38.33. Shares of Sanderson Farms Inc. (nasdaq: SAFM - news - people ), which produces both fresh and frozen chicken, rose 22 cents to $45.33.
 

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