Is Beef a Heavily Subsidized Product

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Stocker Steve
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Re: Is Beef a Heavily Subsidized Product

Postby Stocker Steve » Sun Oct 15, 2017 2:22 pm

Ky cowboy wrote:I just can't make it pencil out to buy ground and make cow/calf pay for it.


How much for hay and pasture ground?
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Re: Is Beef a Heavily Subsidized Product

Postby Ky cowboy » Sun Oct 15, 2017 3:39 pm

Stocker Steve wrote:
Ky cowboy wrote:I just can't make it pencil out to buy ground and make cow/calf pay for it.


How much for hay and pasture ground?


Hay ground I pay $1200 a year for about 40 acres of useable ground and 60 of woods that we hunt. Pasture I don't pay, and its around 250 acres. The owner runs some of his cows on there and I supply labor and hay and bull for his and mine but I also get 1/2 of his calfs. I started with no cows and slowly building a herd on the rented pasture. When the owner decides to sell the rest of his cows we will work out a new contract for a straight lease.
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Re: Is Beef a Heavily Subsidized Product

Postby Farm Fence Solutions » Sun Oct 15, 2017 7:16 pm

Bigfoot wrote:People shy away from numbers here, but I'll keep it real for this thread. I run 85 cows, on 260 acres, with one 50 horse power tractor, and a sparse amount of hay equipment. Only because I've owned the place for many years, it's paid for. At the end of the year, I have nothing to show for my trouble, but calluses.


I think it's very important to talk real numbers with young people. Money talk shouldn't be taboo. My dad gave me a better than average start(in knowledge of $, not the actual folding $), but hiding the tough/business parts of an operation from the next generation is no favor.
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ddd75
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Re: Is Beef a Heavily Subsidized Product

Postby ddd75 » Sun Oct 15, 2017 8:00 pm

hoping my sons can making a living with cattle or some type of farming.
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Re: Is Beef a Heavily Subsidized Product

Postby Newberry Creek » Mon Oct 16, 2017 9:41 am

I've had cows for 11 years. Most years I lose a little. Some years I lose more than a little. Couple of years I hit a lick and made good money. On balance I come close to breaking even. I love messing with the cows. I would not be able to live this lifestyle (own the farm) if I didn't have the cows. Best thing I've ever done.
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Re: Is Beef a Heavily Subsidized Product

Postby bball » Sat Oct 21, 2017 5:08 am

ddd75 wrote:how much is a 600 lb calf supposed to be worth 'to make a profit? 1,500...2,000...3,000... ??

Right now you get 1.50.. or 900.00

where would you need it to be to 'make money'?


Random example here:
Beef prices in Jan 1990 were $78.70. So 600# =$472.20

One US dollar in 1990 had the same buying power as $1.91 today. Almost twice the value or buying power as today.

January 2017 was $119. So 600# = $714.00

So, just to keep up with the beef prices of 1990, Jan beef should have averaged $150.32(not $119) rendering the value of the 600 lber $901.92 instead of $714.00 (again these are Jan 2017 averages, not today's price) That's $187.92 less than the 1990 value of the animal.

Long story short, the beef industry doesn't keep up with the inflation rate of the US dollar..for many reasons.

Even in a record year like 2015, when Jan beef averaged $166, thats only $16 above the 1990 average beef value after inflation is calculated. A record year means a $16 gain from 25 years prior. I'd say things are tilted out of balance.
If my thinking or calculating is wrong, I would appreciate the correction.

Here's one more thing to consider: say we use todays price of $150 and get that $900, we realize that is essentially the same price as 1990 after inflation is figured. Yet you have to cover all your inputs with essentially half the dollars due to the same inflation. Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?
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Re: Is Beef a Heavily Subsidized Product

Postby Stocker Steve » Sat Oct 21, 2017 6:48 am

bball wrote:Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?


Inflation is a complicated thing. I think the biggest issue with inflation calculations is which index containing what basket of items is used. Most "real" indexes come in higher than the government CPI. It would be interesting to see an inflation index that included farm equipment and land.

Apparently we produce too much beef, or else folks are substituting white meat. Either way - - beef producers have profitability issues just like most other food commodities. Is there any reason to think that will change? I think we are on our own here.

For folks that are not into the marketing arts - - I think some of the work Greg Judy has done is an extreme example of increasing productivity and substituting lower cost inputs.
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Re: Is Beef a Heavily Subsidized Product

Postby True Grit Farms » Sat Oct 21, 2017 8:06 am

Stocker Steve wrote:
bball wrote:Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?


Inflation is a complicated thing. I think the biggest issue with inflation calculations is which index containing what basket of items is used. Most "real" indexes come in higher than the government CPI. It would be interesting to see an inflation index that included farm equipment and land.

Apparently we produce too much beef, or else folks are substituting white meat. Either way - - beef producers have profitability issues just like most other food commodities. Is there any reason to think that will change? I think we are on our own here.

For folks that are not into the marketing arts - - I think some of the work Greg Judy has done is an extreme example of increasing productivity and substituting lower cost inputs.


Imports are killing us, that's what puzzles me about NCBA. Foreign car manufacturers would kill US manufacturers if there wasn't a tariff.
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Re: Is Beef a Heavily Subsidized Product

Postby angus9259 » Sat Oct 21, 2017 10:13 am

My beef is subsidized by me (day job) and by you (via tax breaks I get on losses to offset taxes on the day job). I appreciate all of you kicking in :).
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Re: Is Beef a Heavily Subsidized Product

Postby Stocker Steve » Sat Oct 21, 2017 11:33 am

angus9259 wrote:My beef is subsidized by me (day job) and by you (via tax breaks I get on losses to offset taxes on the day job). I appreciate all of you kicking in :).


The grain guys have a proven plan - - more CRP and more ethanol. :nod:

Did you are sign up for CRP too?
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Re: Is Beef a Heavily Subsidized Product

Postby bball » Sat Oct 21, 2017 1:22 pm

Stocker Steve wrote:
bball wrote:Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?


Inflation is a complicated thing. I think the biggest issue with inflation calculations is which index containing what basket of items is used. Most "real" indexes come in higher than the government CPI. It would be interesting to see an inflation index that included farm equipment and land.

Apparently we produce too much beef, or else folks are substituting white meat. Either way - - beef producers have profitability issues just like most other food commodities. Is there any reason to think that will change? I think we are on our own here.

For folks that are not into the marketing arts - - I think some of the work Greg Judy has done is an extreme example of increasing productivity and substituting lower cost inputs.


In nature, everything seeks equilibrium. In economics, it seems to be the opposite, but I haven't studied economics past high school. The American food production 'system' has enough govt interference, for the safety and security of the masses, that free market doesn't exist as it should. There is culpability for all involved.

I will Google Greg Judy.
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Re: Is Beef a Heavily Subsidized Product

Postby cowgirl8 » Sat Oct 21, 2017 1:56 pm

We do pretty good. But then again, our land was paid for years ago. I don't know how anyone would make it today with how much land cost now. It was tough when land was under 400 an acre. Calf prices aren't much more than they were last century. But the cost of land, equipment and such is so many xs what it was back then also. So, I don't know how anyone makes money on cattle if they are just starting out.
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Re: Is Beef a Heavily Subsidized Product

Postby Dave » Sat Oct 21, 2017 4:38 pm

Stocker Steve wrote:
angus9259 wrote:My beef is subsidized by me (day job) and by you (via tax breaks I get on losses to offset taxes on the day job). I appreciate all of you kicking in :).


The grain guys have a proven plan - - more CRP and more ethanol. :nod:

Did you are sign up for CRP too?


I think CRP is on the way out and a lot of people here who have land in CRP agree with me. And when that happens there will be a bunch of pasture available to rent. People who have had ground in CRP for 20 years no longer have equipment and the price of wheat won't cover purchasing equipment.
I am surrounded by people who make a living on cattle. They have a lot more than 20-30 cows. They buy and sell by semi loads whether it is selling cattle, or buying minerals, grain, hay, or any other inputs. You never see them at the local farm store.
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Re: Is Beef a Heavily Subsidized Product

Postby Stocker Steve » Sat Oct 21, 2017 10:00 pm

Every grain growing state, and the bird hunters, want to raise the CRP acres cap.
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