Cattlenetwork - August Beef Imports Way Up

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cattle_gal

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From - http://www.cattlenetwork.com/content.asp?contentid=3135

Cattle Outlook – August Beef Imports Way Up

Beef imports in August were up a whopping 57.6% from a year earlier. For the first eight months of 2004 beef imports were up 26%. Most of this increase was from Canada and Argentina. Beef exports continue to be very low because of the finding of one cow last December with BSE. For January-August beef exports were off over 85% from the same months of 2003.

Feeder cattle imports from Mexico for January-August were up over 30%. However, total live cattle imports for the first eight months of the year were down over 28% because of the ban on live cattle imports from Canada due to BSE.

USDA estimate of the 2004 corn crop is a bin-busting 11.6 billion bushel. The soybean estimate for October 1 is 3.1 billion bushel. Both the corn and bean crops if they materialize would be a record high. The previous record high crop for corn was in 2003 at 10.1 billion bushels.

USDA projected price per bushel for corn for the 2004-05 marketing year is $1.95 for their mid point. This compares with $2.42 per bushel for the 2003-04 marketing year.

The estimated price per ton for soybean meal for 2004-05 marketing year is $165 per ton - down sharply from the $256 per ton average for the 2003-04 marketing year.

These potential much lower feed prices for the next year certainly are helping to hold strong feeder cattle prices.

At Oklahoma City this week, feeder steer and heifer calf prices were steady to $2 per cwt lower than a week earlier.

The price range by weight groups for medium and large frame number 1 steers this week were: 400-500 pounds $125 to 142 per cwt, 500-600 pounds $110 to 128 per cwt, 600-700 pound calves $105 to 115.75, 600-700 pound yearlings $116.75 to 123 per cwt, 700-800 pound $114.25 to 120.50 and 800-875 pounds $109-113.25.

Packers were able to push beef prices up some this week. Yield 3 choice beef Friday morning at $136.40 per cwt was up $6.41 per cwt for the week. Select yield 2-3 beef was up $4.21 per cwt at $131.23 per cwt.

Negotiated cattle prices, weighted average, for the five market areas at $83.22 per cwt live were up $1.12 per cwt from a week earlier.

The negotiated weighted carcass price this week through Thursday for the five market area was up $0.50 per cwt at $130.70 per cwt.

The range in fed cattle prices for the midwest direct trade was $N/A to N/A with a weighted average of $N/A per cwt. The range in prices for the high plains was $N/A to $N/A per cwt with a weighted average of $N/A per cwt.

The futures market continues to show the potential for modest increases in fed cattle prices in coming months.

Slaughter this week under Federal Inspection was estimated at 631 thousand head, up 0.3% from a year earlier.
 

Jake

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Even though these prices are great for now.... sooner or later they are gunna have to break for the better of us, this 900# and 1000# cattle selling for $1 isn't good, it may be a pretty penny now, but it makes it so we cant afford to retain or buy heifers, retail prices are going to get to high, and we're gunna lose consumers due to prices. Land prices will start climb even higher.... who knows how this will play out in the next ten years, but I intend to find out...
 

ollie

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I am going to be the other side of the fence and tell you guys I like high prices.
 

Jake

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I'm not saying I don't like the high prices, I'm just saying it's gunna catch up with us and it's not gunna be like this forever and these prices are only good to an extent.
 

Jake

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but how are you spose to buy low? a 4 weight calf cost $575 or $600, guess you have to go with, buy high- sell higher
 

Jake

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exactly, that's the problem with this market... how high is too high? are we there already? how far off are we? nobody can answer this but I personally think that we're flirting with too high, this can't last forever.
 

Texan

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Jake":13sb8ufg said:
.......I personally think that we're flirting with too high, this can't last forever.
Jake, I don't say this about many cattlemen anymore, but........I think you'd do to partner with!
 
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cattle_gal

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Here is something to ponder on with the view that the current prices are “high”. This was written in Feb of 1979.

American consumers will see no relief in beef prices for several years. It takes this much time for the cattle cycle to change.

Strange as it seems, cattle numbers are still decreasing and perhaps will continue to do so until the latter part of this year. Dry cows are worth so much that there is still an urge to sell rather than keep them.

When rebuilding of herds starts to take place, it will probably take about four years before the herds would increase enough to produce enough to produce an over supply.

As long as cattlemen continue to liquidate, beef prices will probably remain at present levels. However, when producers start to restock, this will again lower supplies, which should cause the market to spurt upwards again.

In 1950, hamburger was 50 cents per pound, while on May 1 1978, hamburger was only 89 cents per pound. In this same span, coffee rose from 69 cents to $2.95 a pound, gasoline from 24 cents to 64 cents per gallon, postage from 3 cents to 15 cents, and a congressman’s salary raised from $12,300 to $57,500 a year.

If cattle prices had risen in the same proportion as other products, we would be receiving $1 per pound to $1.20 per pound for fat steers instead of 60 cents
.”

Also along with the article (written in Feb of 1979) was the market report. Dry cows - $40 to $50. 500 to 600 lbs steers $80.

In 1993 (midwest year average) - Dry cows $56.49, 600-700 weight steers $90.94

If we put the current prices in to proportion with everything else currently, it is a wonder any ranchers are in business, but only because one has to make money off the ranch to support the ranch. If consumers would have the thinking that the prices are to high and stop buying the product then every other product would not be bought either. Look how much auto prices and everything else too has risen lately the past 10 or so years. Ridiculous. Can anyone remember the US people who started to say that prices are too high. Chances are they are the same people who have been taking advantage of the ranchers for along time. Why should one be led to believe that prices are too high. To high to what? 25 years ago? Can any other product be as far behind in inflation in comparison to everything else on the market, as is the farmer and ranchers pay off? What product can compare their prices to 25 years ago?

If the ranchers get more then they have more money to spend in the local economy(food, supplies, fertilizer,cattle, feed, machinery,ect). An economy that relies on the rancher/farmer(another reason I am against CRP). If I can I will buy at the locally(town or in state) owned stores or individuals(custom grown/made) to give them the business (sadly it’s getting really hard to find those folks), not the Costco’s or Wally-Worlds(who started out attracting people by saying they only have items made in the USA and then so fast changed to China). I just bet the Canadians would much rather buy/eat Canadian made/grown products than Argentinian or Brazilian or even US products.

While flipping through the tv last night there was a family show/movie and this kid said to this girl - “honesty is for those who think small”. Wow how discouraging to have that said on a supposed kid friendly movie. Grab, grab, grab and cheat at any cost, forget about being trustworthy and earn what you have.

There is one factor that the 1979 article did not have to account for - the importing of beef.

Land prices around here, you haven't been able to even put up your place for sale at ag prices to break even for some time now, some rich urbainite will suck it up first thing(use as a playground and take out of production). I know of folks who have sold and they go buy land in easten MT and even in the Midwest with more land and/ormore productive land.

Reataining or selling. It all boils down to which is going to give you the most down the road. A few bucks more now or a lot of bucks down the road. Ahh the gambling of the cattle business strikes again. If prices stay up then your herd will be much better of retaining. If prices all of a sudden go down well sell now. It's a gamble for the cow/calf and feeder person always has been. It isn't any different than sell low and buy low. Except if you want to improve your herd then you go from selling low to buyer higher. Cull cows sell lower and young bred cows buy higher. Buying improvement is never a straight across the boards deal. Wish it was. Get a bred good young cow for the same price as a cull cow.

Forgot to add - the US cattle supply is down almost 11 million head since the 1995 count and it’s not looking to be much better either. No, can’t blame it on the drought either. We were in drought from 1988 to 1993 and at the end of that drought there were still 7 million more head than the 2004 count.
 

Jake

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Thanks Texan, I just hope that I can make some money off of cattle with an optimistic yet realistic view like this, think it will work? or at least work as good as cattle ranching can?
 

Caustic Burno

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Just wait this market will correct itself and when it does we will get to see what Cattlemen are left. If this new generation see's a correction like in 73 won't be a lot left when it's over.
 

Texan

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cattle_gal":26hew51w said:
Why should one be led to believe that prices are too high. To high to what? 25 years ago?
Cattle_gal, that's a good post and those are all good points you make, but when I worry about the market being too high, I worry about it in comparison to the chicken and the pig. We all know that the consumer prefers beef, but they are only going to pay for that preference up to a certain point. I'm not real interested in trying to find the point of diminishing consumer preference. By then, we'll be in trouble 'cause it'll be a bloodbath for most of us while we make the corrections.
 

Ryder

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Jake":9me8lk89 said:
exactly, that's the problem with this market... how high is too high? are we there already? how far off are we? nobody can answer this but I personally think that we're flirting with too high, this can't last forever.
There is a saying, "no tree grows to the sky".
I think prices are a lot closer to the top than to the bottom. Every market cycles up and down. The ones who get hurt the most are those that believe that 'this time' is different.
 

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Texan":2axrl6ki said:
cattle_gal":2axrl6ki said:
Why should one be led to believe that prices are too high. To high to what? 25 years ago?
Cattle_gal, that's a good post and those are all good points you make, but when I worry about the market being too high, I worry about it in comparison to the chicken and the pig. We all know that the consumer prefers beef, but they are only going to pay for that preference up to a certain point. I'm not real interested in trying to find the point of diminishing consumer preference. By then, we'll be in trouble 'cause it'll be a bloodbath for most of us while we make the corrections.

Amen Cattle_gal--- cattle prices are only getting near where they should be....

Texan- remember their is little of the chicken and hog industry that is not owned by the Corporation Packers..........
 
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cattle_gal

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Bruno,

And just like the early 80's. Ouch. You'll see alot more people finding diverse incomes coming in again or they'll just say the heck with it.

Texan,

Yeah that's the original competion we had in the whole scheme of things. It would be nice if we could just only worry about competing with the other meats and vegi only groups. :( Ah remember those times of - oh yeah beef is better than XXX , and shaking your head at PETA and vegi group ads. Actually I'm glad I don't see any of those PETA ads right now. But hopefully after the carb diet has been tested, people will also see that beef is good or better than what the others claim. If people have a variety in meats that would be ok with me too. I don't eat beef everyday of my life. Mix it up a little, just a little, some elk, and chicken and pork, and sometimes fish but no cat, dog or rat ;-) . At least I hope not :shock:

Oldtimer,

There getting closer. If we can get through this drought and get a hay crop next and prices keep up we may make it, until the next round of what ever comes up. But they say that we are in for another 5-6 years of this stuff. Don't know what to think. They can't even predict tomorrows weather. I heard that Havre to GF got some snow up there yesterday and today. We were the warm spot here and then it came in some. Not much only a little snow down to timber line. Hey sorry to read that you had a tip over in the 4 wheeler.
 

Texan

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Oldtimer":1uopy3k5 said:
Texan- remember their is little of the chicken and hog industry that is not owned by the Corporation Packers..........
Yeah, OT. I'll grant you that they reach in the same pockets. But remember that Don Tyson put the big, evil, greedy, packer-devil IBP in his toybox. Not the other way around!
 

Oldtimer

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Cattle_gal- It snowed all day Saturday - down here in the valley it all melted but you get a few miles north toward the border and its all white--rained all day yesterday and is again today- Just a misty rain- reminds me of Seattle or London weather--Spent yesterday working and inspecting 200 calves- feedlot was a little sloppy-- Last year winter started on Oct. 29 th- Hope it don't start on Oct. 15th this year......
 

ollie

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I think that the ones that loose money are the ones sitting on the side line. I have a friend of mine that made 400,000.00 in a cattle trade last year. Bought high sold higher. No one makes money on cheap cattle.
 
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