cattle futures

[HerefordSire]

speculate

I was hoping you would say market your cattle, as speculators are the biggest villian of commodity producers.

When you get down to it, every cow calf producer is a speculator. If we weren;t we wouldn;t breed the cows speculating that we would make money on the calves.
ALl in how you look at things

It is less speculative to select and buy stocks by throwing a dart against the Wall Street Journal stock listings than it is running a cow calf operation. Cattle are more likely to die than a corporation and as long as you don't sell a stock and the corporation doesn't go out of business, you still have a chance at making a return.

 

[Brandonm22]

It is less speculative to select and buy stocks by throwing a dart against the Wall Street Journal stock listings than it is running a cow calf operation. Cattle are more likely to die than a corporation and as long as you don't sell a stock and the corporation doesn't go out of business, you still have a chance at making a return.

Exactly, you could go off for a year and completely ignore your stock portfolio and most of the stocks will still be there and be worth something. Do that with the cows and they will likely be long gone without somebody winter feeding, putting out minerals, repairing fences, warding off rustlers, rotating pastures, breaking iced waterers, etc.........and then the cow market is just as volatile as the stock market. My last Alabama Livestock Market News was just SAD. I have long said that you needed to hold your breakeven cost something below 90 cents a lb on feeders........with 600 lb steers bringing between 87 and 81 cents and 600 lbs heifers 78-69 even that won't work in this market. By my math, at those prices, a 100 good calves (both genders) are only worth $46,800. Good luck maintaining a 110 cow herd on that.

http://www.ams.usda.gov/mnreports/lswalabama.pdf

 

[john250]

When you get down to it, every cow calf producer is a speculator. If we weren;t we wouldn;t breed the cows speculating that we would make money on the calves.
ALl in how you look at things

No dun you are a hedger, a hedger actually produces, needs, consumes or uses a commodity. Speculators participate in the futures market purely to make money. That's why they're called speculators. They have no interest in or intention of producing, consuming, using or taking delivery of any commodity.

Dun (and myself) are hedgers, in the sense we actually produce something.
But, turning bull in with cows is an act of pure speculation. The income is considerably far down the road, and the costs are immediate.

 

[options]

John250

Yes when you and dun turn the bull in you are hoping to make a profit. Same as any other business. Aplus buys expensive janitor equipment with hopes he will also make a profit his expenses are immediate as well. Those are business providing or raising something in hopes of making a profit on their trade. Speculators don't give a **** if the people producing the commodity they are trading ever make a profit or not. I bet however you care if your fellow cattle producers make a profit don't you?

 

[options]

It is less speculative to select and buy stocks by throwing a dart against the Wall Street Journal stock listings than it is running a cow calf operation. Cattle are more likely to die than a corporation and as long as you don't sell a stock and the corporation doesn't go out of business, you still have a chance at making a return.

Exactly, you could go off for a year and completely ignore your stock portfolio and most of the stocks will still be there and be worth something. Do that with the cows and they will likely be long gone without somebody winter feeding, putting out minerals, repairing fences, warding off rustlers, rotating pastures, breaking iced waterers, etc.........and then the cow market is just as volatile as the stock market. My last Alabama Livestock Market News was just SAD. I have long said that you needed to hold your breakeven cost something below 90 cents a lb on feeders........with 600 lb steers bringing between 87 and 81 cents and 600 lbs heifers 78-69 even that won't work in this market. By my math, at those prices, a 100 good calves (both genders) are only worth $46,800. Good luck maintaining a 110 cow herd on that.

http://www.ams.usda.gov/mnreports/lswalabama.pdf

Brandom22 I'm not sure what the quality of these cattle are selling so poorly, but the market isn't that bad everywhere in the country.

 

[HerefordSire]

It is less speculative to select and buy stocks by throwing a dart against the Wall Street Journal stock listings than it is running a cow calf operation. Cattle are more likely to die than a corporation and as long as you don't sell a stock and the corporation doesn't go out of business, you still have a chance at making a return.

Exactly, you could go off for a year and completely ignore your stock portfolio and most of the stocks will still be there and be worth something. Do that with the cows and they will likely be long gone without somebody winter feeding, putting out minerals, repairing fences, warding off rustlers, rotating pastures, breaking iced waterers, etc.........and then the cow market is just as volatile as the stock market. My last Alabama Livestock Market News was just SAD. I have long said that you needed to hold your breakeven cost something below 90 cents a lb on feeders........with 600 lb steers bringing between 87 and 81 cents and 600 lbs heifers 78-69 even that won't work in this market. By my math, at those prices, a 100 good calves (both genders) are only worth $46,800. Good luck maintaining a 110 cow herd on that.

http://www.ams.usda.gov/mnreports/lswalabama.pdf

Brandom22 I'm not sure what the quality of these cattle are selling so poorly, but the market isn't that bad everywhere in the country.

Are the sale barn price differences directly related to transportation costs?

For example, the bulk cattle buyer thread.....buy in Alabama and dump where transportation costs are covered plus a little profit.

 

[options]

Are the sale barn price differences directly related to transportation costs?

For example, the bulk cattle buyer thread.....buy in Alabama and dump where transportation costs are covered plus a little profit.

I have never personally sat in a Alabama sale barn, I have bought cattle out of an Alabama sale barn, but not for a long time. I'm unsure of why there is such a difference in calf prices. If it is quality issue, non preconditioning, or just location however if they are like cattle, as these selling in the north they are selling below where they could be. Wheels don't cost that much.

 

[Brandonm22]

........with 600 lb steers bringing between 87 and 81 cents and 600 lbs heifers 78-69 even that won't work in this market. By my math, at those prices, a 100 good calves (both genders) are only worth $46,800. Good luck maintaining a 110 cow herd on that.

http://www.ams.usda.gov/mnreports/lswalabama.pdf

Brandom22 I'm not sure what the quality of these cattle are selling so poorly, but the market isn't that bad everywhere in the country.

Quality??? Read the sheet. My numbers are for all Medium & Large 1s and 2s sold in the state. I "assume" the best black baldie and char 1 steers were the ones bringing the 87 cents and I "assume" the less desirable of the 2s were the ones bringing the 81 cents. I didn't include the 3s........as anybody selling lots of 3s has some issues with their operation anyway. Prices PROBABLY are higher someplace else......that doesn't change the conditions on the ground here any.

 

[S&WSigma40VEShooter]

You can take the $ you spend trading cattle futures to Las Vegas and pretty women will serve you free drinks while you lose the money.
The odds are about the same.

John, I am not sure I can agree with you. If I remember correctly Hilary Clinton demonstrated to us all how you can make a lot of money trading cattle futures. All you have to do is read the Wall Street Journal. :lol2: :lol2: :lol2:

Hillary had an exceptional broker. :lol2:

Martha stewart had a not so good broker.

 

[options]

Quality??? Read the sheet. My numbers are for all Medium & Large 1s and 2s sold in the state. I "assume" the best black baldie and char 1 steers were the ones bringing the 87 cents and I "assume" the less desirable of the 2s were the ones bringing the 81 cents. I didn't include the 3s........as anybody selling lots of 3s has some issues with their operation anyway. Prices PROBABLY are higher someplace else......that doesn't change the conditions on the ground here any.

Just because calves fall into the category meduim large 1's or 2's doesn't meen they are quality cattle.

 

[Brandonm22]

Just because calves fall into the category meduim large 1's or 2's doesn't meen they are quality cattle.

That is precisely the point! Some probably were sucky. Some were average. Some were amoung the best calves in the country. THAT is the RANGE that Medium and Large 1 and 2 calves (~600 lbs) were trading at for across 20 stockyards.

 

[options]

I never seen the cattle personally however they seem to be selling for very very low money considering they are some of the best in the country. There must be an underlying problem.