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A tough story and a sign of things to come
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<blockquote data-quote="gizmom" data-source="post: 1335142" data-attributes="member: 13402"><p>I have been reading through this thread and decided to throw my :2cents: into the conversation. First of all I feel bad for the folks that had to sell out. No matter what the reasons I hate to see when someones dream comes crashing down on them. I will confess I didn't study the article just grazed through it a bit, but one of the things I picked up is that they started there own feed lot. The past two years when the calf prices went through the roof the feeders took a huge hit. Timing in business is everything and having those kind of prices during a period when your in start up mode of a feedlot would be difficult for someone with years of experience much less someone just getting started. With beef cattle you have cow/calf operators, stockers, backgrounders and feeders. When the price of the calves and stockers got so high there was no way the feeders could make a profit they were going in the hole pretty fast. The prices had to come back down. But folks when I hear comments like" if these prices stay like this ". Really? I hope to heck they do because they are still better than they were for a good number of years. </p><p><a href="http://s831.photobucket.com/user/gizmom/media/US-Cattle-Prices-2006-16_zpsq06d8ld3.png.html" target="_blank"><img src="http://i831.photobucket.com/albums/zz240/gizmom/US-Cattle-Prices-2006-16_zpsq06d8ld3.png" alt="" class="fr-fic fr-dii fr-draggable " style="" /></a></p><p></p><p>I had a conversation today with a good friend, we bounce management ideas off one another all the time. He called and said I need your opinion. He had sent 5 steer calves to the local sale barn, he said they were nice calves but nothing super special just nice average weight 505lbs he got 1.36 a pound for the calves, and said he was a bit disappointed with the price he received. My answer to him was what did you get for the same quality steer back 4 years ago? He said well I got 85-95 cent a pound. Humm 1.36 doesn't sound as bad when you put it like that. The drought out west drove the cattle inventory down to the lowest it has been in years it was a perfect storm for high prices, but we all knew or if you studied what was going on you knew what was going to happen. Prices would have to come down to a point where a balance of all the different sections of the industry could still make a profit. I think we are getting close to that balance and I for one will be thankful if we can maintain these prices of 136-156 for steer calves. It won't give me the surplus to upgrade equipment and renovate pastures like we were able to do in 2014 and 2015 but thank the good Lord we used the surplus wisely and got some things done while the prices were high. The current prices sure aren't so bad that you can't make a profit you just won't have the margins that you were able to achieve in 2014 - 2015.</p><p></p><p>gizmom</p></blockquote><p></p>
[QUOTE="gizmom, post: 1335142, member: 13402"] I have been reading through this thread and decided to throw my :2cents: into the conversation. First of all I feel bad for the folks that had to sell out. No matter what the reasons I hate to see when someones dream comes crashing down on them. I will confess I didn't study the article just grazed through it a bit, but one of the things I picked up is that they started there own feed lot. The past two years when the calf prices went through the roof the feeders took a huge hit. Timing in business is everything and having those kind of prices during a period when your in start up mode of a feedlot would be difficult for someone with years of experience much less someone just getting started. With beef cattle you have cow/calf operators, stockers, backgrounders and feeders. When the price of the calves and stockers got so high there was no way the feeders could make a profit they were going in the hole pretty fast. The prices had to come back down. But folks when I hear comments like" if these prices stay like this ". Really? I hope to heck they do because they are still better than they were for a good number of years. [url=http://s831.photobucket.com/user/gizmom/media/US-Cattle-Prices-2006-16_zpsq06d8ld3.png.html][img]http://i831.photobucket.com/albums/zz240/gizmom/US-Cattle-Prices-2006-16_zpsq06d8ld3.png[/img][/url] I had a conversation today with a good friend, we bounce management ideas off one another all the time. He called and said I need your opinion. He had sent 5 steer calves to the local sale barn, he said they were nice calves but nothing super special just nice average weight 505lbs he got 1.36 a pound for the calves, and said he was a bit disappointed with the price he received. My answer to him was what did you get for the same quality steer back 4 years ago? He said well I got 85-95 cent a pound. Humm 1.36 doesn't sound as bad when you put it like that. The drought out west drove the cattle inventory down to the lowest it has been in years it was a perfect storm for high prices, but we all knew or if you studied what was going on you knew what was going to happen. Prices would have to come down to a point where a balance of all the different sections of the industry could still make a profit. I think we are getting close to that balance and I for one will be thankful if we can maintain these prices of 136-156 for steer calves. It won't give me the surplus to upgrade equipment and renovate pastures like we were able to do in 2014 and 2015 but thank the good Lord we used the surplus wisely and got some things done while the prices were high. The current prices sure aren't so bad that you can't make a profit you just won't have the margins that you were able to achieve in 2014 - 2015. gizmom [/QUOTE]
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