Today's workshop

[Caustic Burno]

Was largely on retaining and buying replacements.
Average cost to raise a heifer was 1900 the most to pay for a replacement
was 2400 with the five year forecast.
Forecast was the market steady this year then declining till 2021.

 

[denvermartinfarms]

Was largely on retaining and buying replacements.
Average cost to raise a heifer was 1900 the most to pay for a replacement
was 2400 with the five year forecast.
Forecast was the market steady this year then declining till 2021.

So what were the reasons for a 5 year decline?

 

[Caustic Burno]

Was largely on retaining and buying replacements.
Average cost to raise a heifer was 1900 the most to pay for a replacement
was 2400 with the five year forecast.
Forecast was the market steady this year then declining till 2021.

So what were the reasons for a 5 year decline?

There were several demand by the consumer decline due to price
As the poultry and swine market are already ramping up to fill the void.
Imports.
Better beef production today's average cattleman is producing the same pounds of beef of 12 cows
with 9 since 1997. Sixty percent of all beef is being ground now and they want pounds.
Said look for low dressing low yield to be dog food prices as the feedlots don't want them.
That is summing up 6 hours of economics and beef production from PHD's from TAMU
A lot of the data was generated by a PHD University of Missouri Ag Dept.

 

[bball]

Wow..very informative. I knew the CME forecast was for beef to hold strong this year and begin to decline early next year..for several of the reasons you listed, plus a few extras in there I wasnt aware of..thanks for sharing

 

[Caustic Burno]

Wow..very informative. I knew the CME forecast was for beef to hold strong this year and begin to decline early next year..for several of the reasons you listed, plus a few extras in there I wasnt aware of..thanks for sharing

I am not sure if I totally agree with the replacement cost numbers
as that was based off a ten year production life.
Here with Brimmer influence easy to get late teens up into the twenties on good grass.
Now these are smart guys and know the leading indicators and the lead economic speaker
is also owns a large cattle operation.
I think in general they are right as this is a commodity market price gets to point and the consumer will
look elsewhere. It takes the beef industry several years to change production the poultry and swine can do it
in months.
What I took away from the program is you are going to raise quality cattle to survive in the future.
Other take away was if you need to spend some improvement money this year and next is it, if their
predictions hold true.
Prediction on a 4 wt that is bringing 1200 dollars today was to be 800 2017/18.

You can bet our input cost wont go down.

 

[JSCATTLE]

I haven't seen very many replacement quality bred heifers for less than 3000 a head . I guess you might pick up a few here and there at the barn for less . But I'm not seeing any quality held long enough to breed.

 

[Caustic Burno]

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.

 

[JSCATTLE]

I don't see how anyone can make a 3000 dollar cow pencil out. I need about 30 head but I think I'll wait until the price falls out and buy some of those slightly used 3000 dollar cows for 800 when people sell out .

 

[bball]

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 op: p

 

[bball]

I don't see how anyone can make a 3000 dollar cow pencil out. I need about 30 head but I think I'll wait until the price falls out and buy some of those slightly used 3000 dollar cows for 800 when people sell out .

AMEN! I had 3 different people approach me just this past week to tell me they were getting into cattle NOW. While bottle calfs are 500 and heifers are 3000, presuming you could find them..very little margin (if any) at those buy in prices..on top of all the startup expenses, fencing, handling facilities, etc. Etc. They see the end dollar, not the beginning dollar. Like most things, you make your money when you buy, not when you sell...

 

[Red Bull Breeder]

Seems to me them smart boys haven't priced chicken or bacon in a while.

 

[M-5]

Just hold on a little while is prices start declineng you will see some panic selling and can get some good ones at a reduced price. People are predictable

 

[denvermartinfarms]

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.

 

[Caustic Burno]

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.

 

[Caustic Burno]

Denver I am convinced in your lifetime cattle operations as we know them will become extinct.
It has already started with womb to tomb cattle operations.
These will be ran like the chicken and pork industries owned by large corporations.
http://beefmagazine.com/blog/no-rancher ... t-ain-t-so

 

[bball]

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.

 

[Bigfoot]

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.

 

[denvermartinfarms]

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.

 

[Bigfoot]

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

 

[Caustic Burno]

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 op: 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.