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Napanee, Ontario | Hi Garvo,
Well, the article i quoted did point out that they thought the several good years for the cow guys are going to come from feeders... but i don't really agree with that. It was more to show that for cow guys, things are turning around. I think maybe in the beginning stages it will come from feeders, but most on out is going to come from that 70-80 cent packer spread and then the big take in the supermarket :
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No, instead packers will eventually find themselves in the postion where they are getting used to a 40-50 cent fat-rail spread instead of 80, and supermarkets will no longer get to enjoy the greedy margins they've been harvesting off beef producers backs for years.
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What the cow guy will enjoy in the short run will eventually get split among all parties, feeders alike - there is a large infrastructure and equipment demand for feeders to finish animals and they deserve profit as much or more, depending on capital investment required in equipment vs land dollars. Not long ago, you could buy a 100 parcel for the price of a used combine up here. pretty hard to rent that ground for pairs and feed bought hay off the same ground now. Meanwhile, fats prices were 1.10-1.20 then also.... and feeders barely 30% lower than now. Feeders and fats are both needed in the chain, and the rise of both our prices is necessary in the long run to get more pricing power back from the packers and distributors. Since when has the fat rail spread ever been so big that i can remember..
Edited by OldMcdonald 8/20/2013 18:23
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Feeders Arn't Dropping Anytime Soon IMO
