Can These Prices Hold??

[A-RRanch]

I am trying to buy a few cows right now but these prices are insane. I am shopping around locally from traders as well as going to Navasota and Bryan sale barns. Old half dead open cows are nearly a dollar a pound. Im trying to buy a couple more heavy breds but the price keeps inching up and Im worried about the price holding and therefore the value of my cows....some of the "experts" say these prices will hold for a year or two at least and saying this fall we'll see $2.00 5wt steers do you all agree?? Should I not be afraid to buy breds at $1300-$1500 or pairs at $2000 and up?

 

[1982vett]

Old rule of thumb was something like 2 calves for 1 bred cow.......with 500 lb calves scaring the hell out of $1000.....but I'll bet a hot dry summer will bring that cow price down a bit.

 

[Bigfoot]

I personally don't think they will hold, but what do I know. I've got several cows, no need in expanding during a record high market. I'm not going to buy any while they are high, and I may not even keep any heifers, we'll see. They ever hit $80 cwt again I'll load up.

 

[denvermartinfarms]

Here's my feelings, we have and still are selling 220cwt and up 5wt steers, I don't think in the next 2 to 4 years we will be selling any for alot more than that, but I also don't think that 5wts will drop back to 80cwt like they was in 08. I think it's going to be steady to a little cheaper for a while, but not completely blow out.

 

[wacocowboy]

as long as herd counts are down cattle prices will be steady not sure they will go much higher may drop some this summer especially if it gets dry

 

[snake67]

One thing you an be sure of - they will go down some day - that is the name of the game.

When?

Who knows - even the experts who predict have no skin in the game for the most part so I believe them about as much as I believe you when you tell me you want to kiss my azz. LOL

DO NOT!! I repeat - DO NOT - go and borrow money on these prices.

Just enjoy it and relax - the ride is always great - just know when to get off - and when is that?

When you have the feeling that they definitely WILL hold for one more year and you want to go to the bank and borrow money.

Some will do this and win. Some will do this and lose.

Me?

I am taking the money and using it to get a better handle on the debt that I am still carrying from the BSE crisis started in Canada by a US immigrant rancher a bit more than 10 years ago.

Him and one black Angus downer cow he tried to send to slaughter. Remember that guy? Haven't heard much about him since he got his big bailout package from the Canadian feds. The rest of us went hungry when the industry died over night.

I knew it was going to be bad when I sold a pretty decent 2400 pound registered black Angus bull later that summer for 2.5 cents a pound.

We liquidated a herd of bred cow for less than 250 bucks a head. Banks ordered that sale and we had to follow through - that one hurt. And we were not talking 5 cows here. It was enough to create a half million dollar debt.

I had a lot of skin in the game that year - that is when I learned how things can go bad in a hurry because we were riding high and fairly big players at that time.

And we were well treated by our federal government when the bail outs came through - although I admit to being a bit jealous when my wife got her check because it was about 50 bucks more than mine. My cheque was just over a hundred bucks. Between the two of us we did not get enough money to fill both trucks parked in the yard with fuel. LOL

Probably should have declared bankruptcy but I was dammed if I would. We still have the land today but it is still close at times. Only 200K (plus) more to go and it is all ours again! And that ladies and gentlemen is why I have done 5 tours overseas while the old girl runs this place - that little bit if extra cash - who says being a merc does not pay! LOL

Am up for one more tour - will know in about 15 - 20 days. Then I will call it quits.

Remember this - someone - somewhere is getting ready to take a big bite of cash on low interest rates and high prices - and someone is - as always - going to get burned.

Enjoy the ride - to H'E'L'L' with when the prices will go down - clean up everything first!

Best to all

Bez

 

[SRBeef]

To the OP: do it on your cash flow, not someone elses. It's slow but you sleep better at night.

Jim

 

[bigbull338]

the cattle prices will keep going up no m for a while.an heres why.you hng on in CA.an they arnt used to droughts. plus the last few years texas an some other states are always 1 rain away from a drought.so every1 is selling cows when forced to.

 

[Stocker Steve]

Bud said every day you do not sell - - you are buying at today' price... I think a person could rationalize good cows, but not junk, at today' prices. It may be time for some more of that good old Hard Cull'in !

I projected some value of gain numbers for grass cattle this summer, and they were not real encouraging. A guy could let the feedlots have the steers and hire a custom guy to cut hay.

 

[Aaron]

This spring and fall she is gonna get mean and lean around here. Got the D8 rolling in next winter to open up more ground and the corral system is due for a complete overhaul before she falls down completely.

No more backgrounding steers or the bottom 1/2 of the heifers.

 

[Stocker Steve]

- I understand that as corn gets cheaper, then the value of gain goes down, and the backgrounder/stocker guy gets squeezed.

- The talking heads say sharpen your pencil because you can still make money backgrounding/stockering, but is that your best option ???

 

[js1234]

Everyone has different levels of risk tolerance. Personally, I'm not afraid of cows costing what your talking, assuming the quality is there. I think $2 5wts. is a fairly safe bet for this fall. Can I be wrong? Of course. My personal opinion is that a 500lbs. smooth steer, top quality this fall costing $2 will seem 20-30 cents under the money. While I'm actively involved in all 3 segments, I think for the next couple years the cow/calf segment is poised to be very profitable. Could something go horribly wrong and you have a true disaster on your hands? Sure. It's also possible to sit on the sidelines wringing your hands getting nothing done. Goodluck with your project.

 

[Aaron]

I was offered $781 on one small bunch of 425 lb steers last fall and brought them home. I've got $50 of grain into each one of them, plus about another $100 in hay. One chronic bloater in the bunch died a month ago, so have to factor him into it. They should weigh around 700-725 by end of April when I will sell them. As of right now, I need $1126 to break even on them. Is it going to work out?

 

[Stocker Steve]

I was offered $781 on one small bunch of 425 lb steers last fall and brought them home. I've got $50 of grain into each one of them, plus about another $100 in hay. One chronic bloater in the bunch died a month ago, so have to factor him into it. They should weigh around 700-725 by end of April when I will sell them. As of right now, I need $1126 to break even on them. Is it going to work out?

It will be close. Commission and trucking will eat up most of the profit, unless you ate the chronic.

Been there, done that, the meat was pretty bland. :nod:

 

[Aaron]

I was offered $781 on one small bunch of 425 lb steers last fall and brought them home. I've got $50 of grain into each one of them, plus about another $100 in hay. One chronic bloater in the bunch died a month ago, so have to factor him into it. They should weigh around 700-725 by end of April when I will sell them. As of right now, I need $1126 to break even on them. Is it going to work out?

It will be close. Commission and trucking will eat up most of the profit, unless you ate the chronic.

Been there, done that, the meat was pretty bland. :nod:

He's on ice, sitting under a snowpile, until I can burn him in the spring and at least get the fertilizer value out of him. No way I would eat it. Only thing that gets eaten here is prime, open 28 month old heifers that have been fed barley for a couple months.

But anyways, that's why I am going to be leaving the backgrounding to someone else until these prices drop in half in the downturn. If you don't have substantial numbers, it's too costly now to try and recoup any losses.

 

[Stocker Steve]

Veal is not my favorite, but since we feed alfalfa, I carry a knife just in case.

 

[js1234]

I was offered $781 on one small bunch of 425 lb steers last fall and brought them home. I've got $50 of grain into each one of them, plus about another $100 in hay. One chronic bloater in the bunch died a month ago, so have to factor him into it. They should weigh around 700-725 by end of April when I will sell them. As of right now, I need $1126 to break even on them. Is it going to work out?

That's a $155 B/E. Not sure about up there but I sold a whole bunch of 725lbs. steers that deliver next week for par the board delivered at the time I sold them last week. In my case that rolls back to $167 and change in their tracks. April deliveries would contract the same way. Even if you don't do quite as good, I would think you'll come out fine.

 

[polledbull]

i was at meeting last night with a beef specialist talking who had talked to a feeder and a packer , they said for the next 10 years , there will be $1000 calves and $1000 cold carcases for extended periods all through out the period over the next ten years.. not the whole time , but for times during the ten year period , it will take ten years to get the herd fully built back , as he said , there was sell offs in CA now because of drought there , there was massive losses in the Dakotas with the Blizzard this fall , we had a severe winter and a lot of cattle were hauled to town , so it will be a slow recovery , and take years, he said, that will be good for our pockets

 

[Stocker Steve]

it will take ten years to get the herd fully built back , as he said , there was sell offs in CA now because of drought there , there was massive losses in the Dakotas with the Blizzard this fall , we had a severe winter and a lot of cattle were hauled to town , so it will be a slow recovery , and take years,

Not sure if we can or if we should. Why would the herd ever "fully build back" ?

 

[denvermartinfarms]

it will take ten years to get the herd fully built back , as he said , there was sell offs in CA now because of drought there , there was massive losses in the Dakotas with the Blizzard this fall , we had a severe winter and a lot of cattle were hauled to town , so it will be a slow recovery , and take years,

Not sure if we can or if we should. Why would the herd ever "fully build back" ?

The herd will never build back, I say that with confidence, that it will NEVER build back.