|
| ok ill go over what I am about again but i did it below. I DO NOT speculate on whether tbe market is going up or down. That is none of my business and neither you nor I nor SAT really know. SATs numbers however paint a picture of why price is where it is, why its moving, and why it wont stay in one spot forever.
Ill tell you what I do know. I work on margins. If i cant buy cattle and hedge them for a profit, im probably not buying them. Same goes for my corn and beans. A person was able to lock in about $50 acre minimum profit serveral years back for mulitple years by taking your crop insurance into consideration, that was a worst case scenario. If you raised a good crop it was probably more like $200 of actual profit form projected. If you you didnt raise a crop you still made your 50 bucks because crop insurance kicked in.
This obviously doesnt work in todays market as well, so i will be open eventually. And ill be trying to adjust and adapt to the new situation.
But whether its cattle or crops, i WILL not speculate my familys earnings and buy something that is not going to make me money.
This cattle market isnt the packers fault but was allowed by packer. Pack was short of beef, only way to make up for less cattle in feedyards is to allow them to grow bigger. They stopped discounting heavies and allowed ghem to get bigger. Feeder prices too high had adjusted to the packer allowing heavies weight making the cattle feeder have to grow them bigger and longer at low cost of gains to make the cattle profitable. Then one day packer couldnt sell some beef, price dropped and they said were discounting heavies. The minute they started discounting heavies that was the day the music died. It was easy to see it would happen eventually and wont be the last time.
I will say july 2015 i said fats were too high but packers not discounting heavies allowed this to go on way longer than i imagined. I may not trade my opinion but i run my business in the anticipation and protection of my wealth and it kept me out of this mess.
Edited by GOMSK 9/30/2015 10:19
| |
|
"I told you so"
