Jim - 1/11/2017 08:11
garvo - 1/10/2017 23:33 why don't you call it out Jim-you have been hinting at your disgust towards me long enough-Ya I dont fit your marketing plan for 50 head of fat cattle-I market the day I buy the calves or I don't buy-its a lot better plan then blindly paying to much and trying to hope for a higher market-your post's stink to a guy trying to make it-you have no idea-and your being a prick
Gary, I don't know what caused this response but my comments were not aimed at you nor anyone else, just the effect of the process on the cow/calf business in this country.
I appreciate your input on the stock talk board very much. I understand the predicament the independent feeder is in, and the potential for financial disaster in the feeding business. It is logical and understandable that the independent feeder, with a lot of dollars invested, buy at the lowest prices he can find an acceptable input and protect himself by hedging in any way possible.
Because of the concentration in the beef packing industry there is little competition for fat cattle. The cow/calf business on the other hand is the exact opposite of the packers: many smaller (avg US cow/calf herd is still around 50 cows), diverse, independent producers.
The USA beef breed cow herd numbers have been in decline for over 50 years, interrupted only by the brief period of higher prices in 2014 and 2015. It is fairly well accepted that the main reason for this decline is calf prices consistently below the cost of production.
As I have said many times, the correction in the beef business must come from higher fat prices, not from lower calf prices.
I have the highest respect for you and your operation. My comments are intended to support the cow/calf producer, not to criticize the independent feeder.
You are an important resource for NAT and very generous with your knowledge and experience. In no way are my comments above directed at you. I apologize if they in any way appear to be and sorry you took them as such.
Jim
Jim I don't think you are looking at the big picture. Per capita US beef consumption has been on a downward slope since the mid 70's. With so many small producers it is difficult to regulate supply and therefore not have large price swings. Such is the function of the market. As production integrates horizontally and vertically it will become more efficient and the wide price swings will narrow. An integrated cattle producer is going to look at his production costs differently than an independent cow/calf or feeder. From the independent feeder's perspective it is a matrix of future fat price, current feeder calf price and feed price to get there. It all has to come together to allow a profit long term for that independent feeder to remain in business. Do you as a cow/calf operator ever give any thought to what the future feeder calf contract is telling you? Or do you just breed 50 cows because that's what you have? I realize that it would be hard to not breed a cow you already own-but you could just sell the cow if the market is telling you it doesn't need that calf in 18-24 months. Thanks.
Feb Cattle
