Today's workshop

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Re: Today's workshop

Postby bball » Fri Apr 17, 2015 7:45 pm

Caustic Burno wrote:
denvermartinfarms wrote:I'm not sure I buy there opinion on the market. A steady 5 year decline seems unlikely. Where do they think prices will be at the end if that?

I here all the time people's big ideas about how 500lb calves are going to be 1.00$ again. It makes me wonder if that's the case when they think we will see 60 cent gas, a new dodge dually for 15k and nice houses for 30k.



After nearly 50 years the one thing I am sure of is this market will crash just as it has in the past and it will rise again.
Cattle price trends historically for the last 50 years of records have a ten year curve between highs and lows.
We have been riding an artificial high caused by a drought.


This is 100% correct. it's all supply and demand..the drought a few years back gave us a limited supply, and the demand ( especially in the Orient has been record highs because of their growing/thriving economy). But as with any commodity, it will reach a peak high that people will refuse to pay for and select other options..it's happening already in some places. The advantage the beef industry has is it's a one calf a year industry, not just a matter of hatching more eggs or breeding more litters of pigs to saturate the market, the supply isn't as easily manipulated as pork or chicken..or soy (yuck) for that matter. History has shown us things like trucks, homes and fuel never come down (for long). The law of luxury vs essential..just like wages never go up in proportion to basic living expenses.
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Re: Today's workshop

Postby Bigfoot » Fri Apr 17, 2015 7:50 pm

The amount of beef being ground has been concerning to me for a long time. That kinda beef can come from anywhere. Imports will have to rise, if they haven't already.
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Re: Today's workshop

Postby denvermartinfarms » Fri Apr 17, 2015 8:19 pm

Bigfoot wrote:The amount of beef being ground has been concerning to me for a long time. That kinda beef can come from anywhere. Imports will have to rise, if they haven't already.

Imports are up for sure.

My point on the market is this, I know they will get cheaper, no question of that, there's alot more room to get cheaper than there is to go up. But I believe the cattle costing 3.00$ now are not going to be 80$ or 1.00$ again.
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Re: Today's workshop

Postby Bigfoot » Fri Apr 17, 2015 8:28 pm

I hope your right. I've raised them many years, in the hope that next year would be better.
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Re: Today's workshop

Postby Caustic Burno » Fri Apr 17, 2015 8:37 pm

bball wrote:
Caustic Burno wrote:JSC they discussed that and how those cows wont pay out with the predictions.
People are buying like they are never going down. This has always been a cyclic market.

Another graphic they had that doesn't look good for cattlemen in the S/E US is the national herd is shifting to
the plains states and declining in the Eastern.
Largely due to feedlots being in the corn belt and the added trucking cost to get them there from the east.


It's funny you said this. I had a chance to buy several replacements for 2500 this year and I just couldn't do it. I look at this just like stocks or real estate...buy when prices are down, sell when they are high. To the extreme that I was ready to liquidate 50% of my stock last fall while prices were strong. I paused, researched the market and decided to cash in on a larger numericcalf crop this year (futures showed a solid 2015) and I will liquidate a good portion of my herd while prices are still so strong..it's very basic economics...and rebuild while prices are on a downslide...thoughts, critiques welcomed :pop: p



Sounds solid to me.
If I buy and retain it is a deal or in a down cycle.
I have sat on my hands for this whole year at the barn.
Got room to pick up some heavies to run on grass, prices on them don't work out for me
at this time. My crystal ball says fuel prices will rise pulling spendable dollars out of American pockets.
Americans will spend every penny they have on entertainment and toys.That tells me something has to be
cut from the budget . Beef is going to be exchanged for cheaper protein.
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Re: Today's workshop

Postby Caustic Burno » Fri Apr 17, 2015 8:41 pm

denvermartinfarms wrote:
Bigfoot wrote:The amount of beef being ground has been concerning to me for a long time. That kinda beef can come from anywhere. Imports will have to rise, if they haven't already.

Imports are up for sure.

My point on the market is this, I know they will get cheaper, no question of that, there's alot more room to get cheaper than there is to go up. But I believe the cattle costing 3.00$ now are not going to be 80$ or 1.00$ again.



Todays prediction chart had it 2 to 2.50 a pound on 4 wts.
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Re: Today's workshop

Postby denvermartinfarms » Fri Apr 17, 2015 8:55 pm

Caustic Burno wrote:
denvermartinfarms wrote:
Bigfoot wrote:The amount of beef being ground has been concerning to me for a long time. That kinda beef can come from anywhere. Imports will have to rise, if they haven't already.

Imports are up for sure.

My point on the market is this, I know they will get cheaper, no question of that, there's alot more room to get cheaper than there is to go up. But I believe the cattle costing 3.00$ now are not going to be 80$ or 1.00$ again.



Todays prediction chart had it 2 to 2.50 a pound on 4 wts.

So if it has them at 2.00$ to 2.50$ and today they are 2.75 to 3.25$. The worst they expect is a 75 cent drop. I hope they are right, that's fine with me.
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Re: Today's workshop

Postby Caustic Burno » Fri Apr 17, 2015 9:01 pm

That is what I said earlier in the post 1200 dollar 4wts are predicted to be 800.
33% is a heck of a drop.
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Re: Today's workshop

Postby denvermartinfarms » Fri Apr 17, 2015 9:05 pm

Caustic Burno wrote:That is what I said earlier in the post 1200 dollar 4wts are predicted to be 800.
33% is a heck of a drop.

Yes, it's alot, but it won't ruin the business.
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Re: Today's workshop

Postby Caustic Burno » Fri Apr 17, 2015 9:13 pm

denvermartinfarms wrote:
Caustic Burno wrote:That is what I said earlier in the post 1200 dollar 4wts are predicted to be 800.
33% is a heck of a drop.

Yes, it's alot, but it won't ruin the business.



It will never pencil out on 3K+ replacements being sold today.
That cow will be a loser for the rest of her life.
Secondly that is on premium calves not low yield or grade.
One of the takeaways today was to survive you had better be
producing high grade pounds.
This is not the old west the cowboy is dead and the scrape by cattleman is riding after him.
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Re: Today's workshop

Postby denvermartinfarms » Fri Apr 17, 2015 9:25 pm

Caustic Burno wrote:
denvermartinfarms wrote:
Caustic Burno wrote:That is what I said earlier in the post 1200 dollar 4wts are predicted to be 800.
33% is a heck of a drop.

Yes, it's alot, but it won't ruin the business.



It will never pencil out on 3K+ replacements being sold today.
That cow will be a loser for the rest of her life.
Secondly that is on premium calves not low yield or grade.
One of the takeaways today was to survive you had better be
producing high grade pounds.
This is not the old west the cowboy is dead and the scrape by cattleman is riding after him.

I agree with that 100%, I don't think a 3000$ bred cow makes very much sense in this market we have today.

It was just over a year ago that we saw the first 2.50$ 4wts, it was unbelievably good at the time, I don't know about everyone else, but in the last 12 months my expenses haven't went up enough that a 2.50$ 4wt calf wouldn't work about the same as they did a year ago. Now the next 5 years may be a very different story.
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Re: Today's workshop

Postby bball » Fri Apr 17, 2015 9:40 pm

CB, darn good point about producing QUALITY lbs of beef if you expect to draw top market prices. I think some of the folks that have been benefiting from a reduced supply/increased demand and moving some mediocre animals are going to find themselves in a whole different position in the next couple years.
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Re: Today's workshop

Postby Caustic Burno » Fri Apr 17, 2015 9:48 pm

With the technology in the business today the Cattleman better educate himself on the better cow.
Since 1970 the industry has exploded with technology producing better grade meat and more
pounds. We started out scratching our head and butt to pick a bull to EPD's, sexed semen,
AI, invitro to genome mapping.
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Re: Today's workshop

Postby Caustic Burno » Sat Apr 18, 2015 10:45 am

bball wrote:CB, darn good point about producing QUALITY lbs of beef if you expect to draw top market prices. I think some of the folks that have been benefiting from a reduced supply/increased demand and moving some mediocre animals are going to find themselves in a whole different position in the next couple years.


This even applies to the hamburger market as well.
You now have box meat being marketed and graded as ground sirloin or chuck as well.
Now at the feedlot that calf will be put with a group of peers that will grade.
They will be micro chipped and the lot will know the gain % on days of feed.
Every time that calf sticks his head in the feed trough it is read.
The calf will be graded by ultra sound while on feed and then again on the rail.
As Highgrit stated you can not beat a man at his game.
This is down to a science and has been for years.
The order buyer is filling an order that his employer wants not buying just anything you haul to the barn.
Now there are buyers for low yield and dressing cattle as well for chili, dog or cat food.
No one should want to be in this group.
This is simple economics 101 the buyer will pay according what he can make off the product after
his input cost and profit margins based on demand.
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Re: Today's workshop

Postby Jabes0623 » Sat Apr 18, 2015 11:03 am

If people could accurately predict any market they wouldn't be talking about it they'd be playing it. You make a heck of a lot more $ doing something than talking about it.

Now that's not to say cattle prices won't go down, they will. But someone acting as though they can actually predict what a market is going to look like 6 months from now is rather ridiculous, 5 years is just absurd. There's far too many unknowns.
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