For the older guys here, what to expect in prices from a drought?

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Andyjorgen
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For the older guys here, what to expect in prices from a drought?

Postby Andyjorgen » Sun Jun 11, 2017 4:21 pm

I'm hoping some of the more experienced folks here will point a newbie like myself into the right direction in regards to how the market responds to drought.

In 2010 Texas started seeing some long term drought. When everyone rushes to cull their heards, I'm assuming prices fall. Due to thinner heards, once the excessive inventory dries up, I'm assuming prices increase due to limited supply?

Am I on the right track?

Now, I'm also assuming the prices fall harder on the initial sell off, versus the rise once supply gets slashed. I'm assuming this because foreign markets can supply the beef once supply falters, but the foreign markets might not be there to buy up the surplus culls as the drought starts to become a real threat. Am I correct?

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Re: For the older guys here, what to expect in prices from a drought?

Postby Brute 23 » Sun Jun 11, 2017 6:17 pm

Yup that's pretty much it. Factor in the economy also. Im not real up to speed on the foreign market stuff. I know it has an effect but I really don't think it is as much as you would think. I could be wrong on that though. I will be interested to see others thoughts on that.

It was not that long ago we were in a solid 4 year drought and getting .90$ for #500 calves. That was the real deal. :cowboy: We have discussed in on here many times, if you can't make money at $1 per lb you will not make it long term.

Always remember Karma has a wicked sense of humor. Droughts always hit just after you get your herd how you like it and the rains always come after its too late.

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Re: For the older guys here, what to expect in prices from a drought?

Postby Rafter S » Sun Jun 11, 2017 6:48 pm

I don't claim to know much about it, but here's my two cents worth. 2011 we had the worst drought in my part of the world since the 1950's (before my time), but calf prices held up pretty well, since other parts of the country were getting rain. The next year the Midwest was dry, and we had rain.

In short, in today's world, the economy is national, when it isn't global, but drought is more local, so I don't think weather affects the market as much as you might think. And I'm referring to the beef market, not breeding stock. I know those folks take a hit when no one around them has grass.

With that being said, I know there are folks here who have studied the subject more than I have, and are smarter than I am, so if they disagree I'll listen with an open mind.
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Re: For the older guys here, what to expect in prices from a drought?

Postby Caustic Burno » Sun Jun 11, 2017 8:08 pm

Rafter S wrote:I don't claim to know much about it, but here's my two cents worth. 2011 we had the worst drought in my part of the world since the 1950's (before my time), but calf prices held up pretty well, since other parts of the country were getting rain. The next year the Midwest was dry, and we had rain.

In short, in today's world, the economy is national, when it isn't global, but drought is more local, so I don't think weather affects the market as much as you might think. And I'm referring to the beef market, not breeding stock. I know those folks take a hit when no one around them has grass.

With that being said, I know there are folks here who have studied the subject more than I have, and are smarter than I am, so if they disagree I'll listen with an open mind.


Kinda like ivory soap your 99.94% right
The impact the "2011" drought had it was multi year and states.
We were fortunate for prices to hold while we were liquidating our herds.
Got nuts during the restocking years lots of people tried buying in on the high thinking they were going to get rich.
I am the NRA

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Re: For the older guys here, what to expect in prices from a drought?

Postby greybeard » Sun Jun 11, 2017 11:56 pm

Andyjorgen wrote:
Now, I'm also assuming the prices fall harder on the initial sell off, versus the rise once supply gets slashed. I'm assuming this because foreign markets can supply the beef once supply falters, but the foreign markets might not be there to buy up the surplus culls as the drought starts to become a real threat. Am I correct?

Sort of.
Initial selloff began at the end of 2010, and really rolled thru 2011, peaking in Texas probably around Sept-Oct 2011, but that was in only certain parts of the country, but those regions made up a big part of the cattle market in the US. For every region hit by drought during any time period, there were others that weren't bad shape at all. Because our market prices then weren't influenced as much by foreign beef as they are today, I don't think the foreign imports affected things as much as the regional selloffs did that boomeranged into other regions that weren't affected by drought as bad. It wasn't that there weren't any US buyers but they just weren't paying much. When prices were rock bottom here in Texas, they were better up in the midwest, where the drought hadn't reached yet. The drought bounced around to different regions 2010-2014. Everyone's prices were down, but some regionally worse than others.
Archive drought monitor:
http://droughtmonitor.unl.edu/MapsAndDa ... chive.aspx
Sept 2011
Image

Sept 2012
Image

June 2013
Image

Sept2013
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Sept2014
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Re: For the older guys here, what to expect in prices from a drought?

Postby Turkeybird » Mon Jun 12, 2017 5:29 am

The best insurance a man can have to be drought proof is go to church!

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Re: For the older guys here, what to expect in prices from a drought?

Postby cowgirl8 » Mon Jun 12, 2017 5:56 am

In 2011 we got about 1/2 what we got the year before for our calves. Not because of the price at the sale barn, but they were smaller too...
When I hear someone say, I'm on a fixed income, don't take advantage of me....I want to say, i'm not on a fixed income, don't take advantage of me....lol..... That year a fixed income sounded pretty good...
Dont worry about how i do things, worry about why you worry so much about how i do things.

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Re: For the older guys here, what to expect in prices from a drought?

Postby TexasBred » Mon Jun 19, 2017 2:08 pm

Turkeybird wrote:The best insurance a man can have to be drought proof is go to church!

If I don't go to church do it get any benefits if I live next door to you since you apparently do.
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Re: For the older guys here, what to expect in prices from a drought?

Postby callmefence » Mon Jun 19, 2017 6:12 pm

TexasBred wrote:
Turkeybird wrote:The best insurance a man can have to be drought proof is go to church!

If I don't go to church do it get any benefits if I live next door to you since you apparently do.


:D
Rain can get pretty spotty round here. But that still oughta work.
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Re: For the older guys here, what to expect in prices from a drought?

Postby Rafter S » Mon Jun 19, 2017 8:53 pm

TexasBred wrote:
Turkeybird wrote:The best insurance a man can have to be drought proof is go to church!

If I don't go to church do it get any benefits if I live next door to you since you apparently do.


I went to church pretty regular in 2011, but I didn't get any more rain than the folks that didn't go at all.
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Re: For the older guys here, what to expect in prices from a drought?

Postby Turkeybird » Tue Jun 20, 2017 5:28 am

But you survived! If you're not a church goer I'm not downing you,I just figured out a long time ago I sure need all the help I can get. I've struggled through some pretty rough droughts and never had to thin the herd and after it was over I felt like I learned some valuable lessons

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Re: For the older guys here, what to expect in prices from a drought?

Postby TexasBred » Tue Jun 20, 2017 2:15 pm

Turkeybird wrote:But you survived! If you're not a church goer I'm not downing you,I just figured out a long time ago I sure need all the help I can get. I've struggled through some pretty rough droughts and never had to thin the herd and after it was over I felt like I learned some valuable lessons

Just giving you a hard time Turkey....I love church....but don't think God pays much attention to my prayers for rain sometimes. Guess he knows better than me how long we can go without it.
“If it were up to me, I would put in jail every sandal-wearing, scruffy-bearded weirdo who burns the American flag.....“But I am not king.”....Supreme Court Justice Scalia

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Re: For the older guys here, what to expect in prices from a drought?

Postby greybeard » Tue Jun 20, 2017 10:35 pm

He was an old-time cowboy, don't you understand
His eyes were sharp as razor blades his face was leather tan
His toes were pointed inward from a-hangin' on a horse
He was an old philosopher, of course
He was so thin I swear you could have used him for a whip
He had to drink a beer to keep his britches on his hips
I knew I had to ask him about the mysteries of life
He spit between his boots and he replied
"It's faster horses, younger women,
Older whiskey, and more money"
He smiled and all his teeth were covered with tobacco stains
He said, "It don't do men no good to pray for peace and rain.
Peace and rain is just a way to say prosperity,
And buffalo chips is all it means to me."
"For evil to flourish, all that is required is for good men to do nothing" Burke
"The hottest places in Hades are for those who in time of great moral crises remain neutral" Dante


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