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Cattle and beef prices and where they are headed in the future.
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<blockquote data-quote="LCCattle" data-source="post: 1345007" data-attributes="member: 23661"><p>July 8, 2016 <a href="http://www.nbcnews.com/politics/2016-election/democrats-add-15-minimum-wage-platform-n606351" target="_blank">http://www.nbcnews.com/politics/2016-el ... rm-n606351</a></p><p>The minimum wage effects the cattle industry just like it does every other industry. And when the cost of labor goes up prices go up for the consumer and the prices go down for the supplier.</p><p>The rule of thumb within the supply chain is, you try to pass one half of the new cost up the industry supply chain and one half down the industry supply chain. Cattlemen are at the bottom of the supply chain and will feel the brunt of the downward price change until supplies are diminished to the point to drive the prices up again and the consumers can and are willing to pay the higher price. </p><p>As Mexico has positioned itself, by using NAFTA, to import Australian beef and then export it to the US, there is an endless supply of beef in the US, so supply will never go down, which will create cheaper beef for the consumer and the cattlemen in the US will have to absorb all 100% of new labor US labor costs from within the supply chain in the way of lower cattle prices for their product.</p><p></p><p>As a small cow/calf operation my cost to produce 1 lb of beef, for the last 5 years has been between$1.28 to $1.30 per pound. Present market price is $1.42 per lb.</p><p>As I am retired I don't need a tax write off and as I an on lease land I don't need an age exempt property tax benefit. </p><p>And when I adjust my labor cost to $15. per hr, my cost per lb of beef goes to $1.41per lb.</p><p></p><p>For sale: Small cow/calf operation</p><p>I am now accepting bids for a profitable small cow/calf operation with full disclosure.</p></blockquote><p></p>
[QUOTE="LCCattle, post: 1345007, member: 23661"] July 8, 2016 [url=http://www.nbcnews.com/politics/2016-election/democrats-add-15-minimum-wage-platform-n606351]http://www.nbcnews.com/politics/2016-el ... rm-n606351[/url] The minimum wage effects the cattle industry just like it does every other industry. And when the cost of labor goes up prices go up for the consumer and the prices go down for the supplier. The rule of thumb within the supply chain is, you try to pass one half of the new cost up the industry supply chain and one half down the industry supply chain. Cattlemen are at the bottom of the supply chain and will feel the brunt of the downward price change until supplies are diminished to the point to drive the prices up again and the consumers can and are willing to pay the higher price. As Mexico has positioned itself, by using NAFTA, to import Australian beef and then export it to the US, there is an endless supply of beef in the US, so supply will never go down, which will create cheaper beef for the consumer and the cattlemen in the US will have to absorb all 100% of new labor US labor costs from within the supply chain in the way of lower cattle prices for their product. As a small cow/calf operation my cost to produce 1 lb of beef, for the last 5 years has been between$1.28 to $1.30 per pound. Present market price is $1.42 per lb. As I am retired I don't need a tax write off and as I an on lease land I don't need an age exempt property tax benefit. And when I adjust my labor cost to $15. per hr, my cost per lb of beef goes to $1.41per lb. For sale: Small cow/calf operation I am now accepting bids for a profitable small cow/calf operation with full disclosure. [/QUOTE]
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