The great market crash

[3 Eagles shorthorns]

There are not many things anymore that suprise me, but the price feeder calves are bringing are getting tough to take. Today in Missoula I sold some of the or June steer calves that weighed 501 and they brought 1.25 per pound, and keep in mind these were the top of the market for 5 weight calves. After commission and other fees we cleared a little under $600 a head.

 

[knabe]

Are you taking them to the sale yard?

 

[aj]

The crop people are are getting killed here........with lower prices......depending on debt levels. They are guessing 20% bank rup seee. The cattle deal is still profitable only to the top producers. I think 600-750 dollar calves will catch about everything. I sold my bottom 5 heifer calves off 4 weeks ago. They weighed 396 and brought a buck 54. I generated some cash flow that way. They were Red Angus-Shorthorn composites. There were alot of satelite auctions back a couple months ago when producers sold calves for say November delivery and they locked in on good prices. I wonder if the buyers can back out on that deal or not? It could be a hell of a mess. Seems like this happened once before.

 

[3 Eagles shorthorns]

Yes they went to the sale barn. Heifer calves 5,6,7 weights at the most brought 1.10. I didn't sell any heifers this year as hay is on the cheaper side. A lot of yearling guys in my area took a huge hit! One producer lost 200/hd on his steers and 350/hd on his heifers, and he runs 900-1000 head. As far as the early contracts my dad sold on superiors first sale and got 1.53 @550 on 300 steers and Kept all his heifers.

 

[Medium Rare]

Sure looks like it's going to get ugly. Seems we're nearing the bottom of the normal long term cycle, which generally means it's a terrible time to send shorthorns to a barn. Switching to retained ownership and keeping every heifer worth keeping might ease the pain. If you've been selling everything but the dog during the peak of the cycle the past few years everything should work out and set up for the next upswing.

There are some sale reports coming out of the southeast that are absolutely punishing the producers. I sent some solid red 8 weight Red Angus x Shorthorn F1 steers carrying too much flesh two weeks ago and managed 1.22 and felt very lucky. The week before and after they sold was ugly.

The week to week, or even day to day, swings has everyone second guessing everything they're doing. It'll be interesting to see how quickly the cow herd jumps back on its normal long term declining trend. I know for a fact I can't compete with JBS and the vaqueros to the south if everyone decides to get into a race with chicken and pork to the bottom.

 

[CAB]

The USA cow numbers really mean nothing anymore. The ability to ship meat has become so much more efficient and organized that it is global numbers that may make a difference. The strength of the dollar is killing us. If people can buy a third more product with the same amount of money somewhere else in the world that is what they are going to do.

 

[Will]

This past week I saw some 5 weight black ai sired heifers weaned 30 days bring an even buck.  Also so some decent young pairs bring $975 a pair. It is going to be tough this winter.

 

[aj]

On the grain issue......it's pretty interesting. I remember when the farmers had the set asides.......and were payed for not planting crops "fence row to fence row". Now the government subsidises crop insurance and this creates a false market or incentive. We need to figure out a new crop or value added product to grow in my country anyway. We are pumping the aquifer dry.......at a break even condition.

 

[librarian]

Pumping pure water out and glycophosphate in. Wish it could all be native pasture again- or even irrigated pasture.

 

[knabe]

Pumping pure water out and glycophosphate in. Wish it could all be native pasture again- or even irrigated pasture.

take away the subsidies and tax write-offs and it will trend that way.


there is no reason we need this much high fructose corn syrup and ethanol.

 

[simmyshower123]

Pumping pure water out and glycophosphate in. Wish it could all be native pasture again- or even irrigated pasture.

there is no reason we need this much high fructose corn syrup and ethanol.

And this is the reason that us row croppers are having a tough time making it today. How are we supposed to feed the world's growing population with less corn? And I take it that you would rather fill up your vehicles with foreign fuel than cheap American corn?

 

[Lucky_P]

Huh.  Would have loved to have seen $1.25 on calves i sold this week.
Group of 9 black steers 550-600#, weaned, bunk broke, 2 rounds of mlv respiratory vaccines... $109.50/cwt
Group of 4 black steers 475-535, weaned bunk broke, 2 rounds of mlv resp. vaccs ... $108/cwt.
Red steer (SM sired, out of ANxSH heifer) 695#, weaned vacc'ed ... $.90/cwt
3 SM-cross heifers, weaned, vacc'ed  - $84-$87/cwt

Took my lumps.  Don't have to feed 'em any longer.
Didn't lose and money on them, but sure didn't make much for my time and labor.

 

[aj]

Field corn goes to feeding cattle and hog.........and I don't know much about fructose. On the ole old feeding the world deal........gets kinda tricky. Corn beef and don't feed starving people in Africa. Starvation is transportation problem. Even food lifts end up going to a dictators pocket.

 

[RyanChandler]

Pumping pure water out and glycophosphate in. Wish it could all be native pasture again- or even irrigated pasture.

there is no reason we need this much high fructose corn syrup and ethanol.

And this is the reason that us row croppers are having a tough time making it today. How are we supposed to feed the world's growing population with less corn? And I take it that you would rather fill up your vehicles with foreign fuel than cheap American corn?

The only reason corn is cheap is because the production ri$k has been shifted away from the producer and to the US tax payer-- who ironically receives no reward for assuming the risk. In fact, using non renewable US resources to 'feed the world' is about as ass backwards as it gets in terms of looking out for #1 and preserving our nation's own future food supply. The topsoil is blowing away at record rates and the aquifers are LITERALLY going dry!! It's all lollipops and new tractors until it's all gone-- then what?? No, seriously- then what??  You can only steal from the future and call it GDP for so long.

 

[beebe]

Amen.  That is very well stated.

 

[CAB]

IMO you can't put corn into the oil business, ei, ethanol, and not expect for it to follow the oil market. As soon as the USA started producing (too much) of it's own energy the middle east decided to take us back out. The next thing you can expect to happen is that the idiots that try control supply and demand will do is to subsidize non production again and hurt the ethanol plants severely. I don't understand why we built so many ethanol plants so quickly and that none of them were set up to use by products such as corn stalks or native grasses. Until something changes there will always be a love hate relationship between the grain farmers and the livestock producers. It has sure been nice to be able to afford to buy some good ole corn for feed instead of having to use by-products as much as you possibly could.

 

[beebe]

Does that mean that you are profitable now?

 

[oakview]

There's a huge corn residue to ethanol plant about 15 minutes from us that is yet to be fully operational.  They bought a 3 year supply of stalks to have on hand when they're ready to go that are still sitting in the fields they rented on a 10 year lease.  At one time, they were paying $850/acre for approximately 20 acre plots to store the bales on.  The rumor is that they are not purchasing stalks this year.  I was told the going rate was $7/large square bale.  My neighbors that sold them the bales were told by the company that the $7/bale payment more than equaled the fertilizer value they were taking off the fields.  Thousands and thousands of them are stacked in fields around us.  What a haven for rats, mice, and the fox and coyotes that eat them.  Several bale stacks have burned, supposedly struck by lightning.  I assume that we, as tax payers, are footing a large portion of the bill for this environmentally favorable experiment.  Just like the hundreds of wind generators I can see from by house.  I've been told only 1/3 of the energy they can produce is actually utilized. 

So my calves are worth $1/pound.  Why is hamburger still $5/pound at the grocery store?  Rib eyes still close to $10/pound around here.     

 

[CAB]

Does that mean that you are profitable now?

No I'm going to bleed money like the rest of the cattle people. The high prices for calves and the high grain prices of the past years have driven up the demand for land and pasture rents rose right along with the trends.
Thinking that a person can sell big bales of stalks for $7 is crazy. That wouldn't pay for a person's time to say nothing about wear and tear on equipment, loss of organic matter and removal of nutrients! Everything is so messed up from Smithfield Farms being allowed to be sold to China to Anheuser- Busch being owned by the Netherlands. The USA needs to be more in control of our own business. Those countries are going to do what is best for them and worry about us way later.

 

[oakview]

The $7 big square stalk bales were totally the responsibility of the ethanol company.  They did all the work, any raking, baling, hauling, etc.  The land owner/operator got paid $7 for each bale hauled out of their field.  They did nothing other than harvest the corn.  Another problem the ethanol company is having is with the large number of rocks "harvested" with the square bales.  Maybe that's a side benefit to the farmer!