Caustic's Crystal Ball

[Caustic Burno]

For the topic of discussion looking at projected input cost this year, I am having trouble finding a profit in cattle.
Fuel is 3.00 dollars a gallon plus fertilizer is projected to be 800 a ton.
This is going to drive all maintaince cost up as well.
This isn't my first rodeo man has to look at this without the rose colored glasses on.
These prices are going to drive the cost of upkeep of ole Belle in the 1.50 a day or higher.
That mean's old Belle has to sell a calf at 550 bucks with a 100% calf crop.
As Cattlemen we have little to no control over our output cost our only handle is input cost.
Looks like it is going to be a tough year to keep a grip on the handle.
As a group we are bull headed and stupid that we have not organized.
The lack of an energy policy along with EPA regulations is going to be the end of us all.
We have not built a new refinery in this country since 1974. Our population dang sure hasn't decreased in 35 years. The idiots in Washington have shut down drilling in the Gulf putting 80,000 more Amercans out of work, driving the price of crude up. The ethanol pork barrel is killing us as well.
This doesn't paint a pretty picture in the future as the prices are rising in a recession, and will skyrocket as the demand goes higher.

Just my :2cents:

 

[pdfangus]

LISTENED TO AN ECONOMIST YESTERDAY WHO SAID BASICALLY THE SAME THING

 

[Isomade]

Isoms Optomistic Reply.

Caustic, your post boils down to the price of fuel. High fuel prices drive ALL input costs higher for the cattleman. However, I predict than in the next 5-10 years the price of fuel will plummet. Why? Electric Automobiles. Nissan just released the first fully electric car (the LEAF) it will go over 100 miles on one charge. Over the next 5 years this industry will get better and better. We will see automobiles be able to go 300-500 miles on one charge. When this happens, the demand for fuel will drop causing a drop in fuel prices. The major oil companies know this, that is why they are gouging the industry for all it is worth now. The government will raise taxes to make up for the loss of taxes on fuel, but the tax will be spread over all of America and allow the cattleman to make a better profit. Young cattlemen like my self have a bright future, as long as you can afford the land to run them on. Personnally I am here to stay, and I would hope that there are others that feel the same way. JMHO

 

[backhoeboogie]

After paying commissions, my Ole Bell's averaged $706.80 Tuesday.

I did not have a 100% calf crop having lost 3 last year. So far so good this year. Calves are hitting the ground left and right.

 

[pdfangus]

Isomade......

NOT jumping on you.....

However some factors that are influencing the price of petroeoum fuels.
1. we have already gotten the easy stuff. every drop from here on cost more to get
2. opec cartel still controls the price and they are happy now at 90/barrel and see no need to lower it.
3. guvment restrictions on what sources can be used
4. international demand.....Brazil, russia, India Indonesia, China.....these are the growth economies driving everything now.
5. what is going to power the electric generation needed to charge the new fleet of electric cars?

Changes....we ain't seen nothing yet.

 

[Black Coos]

Electric Cars are a JOKE, aint going to work, no net gain...OK first the more electric cars you have , THE MORE ELECTRIC THAT IS USED...RIGHT???
The electric grids are old and thus the electric is not cheap...So gas prices drop as electric goes up, everyone payes more for electric due to the rise in demand.....ELECTRIC CARS ARE A JOKE UNLESS YOU USE SOLAR OR WIND TO POWER THEM.. Right ?, can not use coal or natural gas , still just more fossile fuel , just I do not see a upside to electric cars That use electricity off of the existing grid...

I think everyone is in for some hard times, some hard choices, what else is new? Maybe Smaller is better, that way I can lose my money slower...

 

[backhoeboogie]

5. what is going to power the electric generation needed to charge the new fleet of electric cars?

2 years ago I would have said nuke power. The new legislation added to the nubuild and cola incentives (by last year's administration) shut that down.

As far as the cars go, I don't understand how people in the big city can have a 10 year old car with less than 30K on it. That's not even 3K a year. It seems impossible. Then I hear most of the family's there don't even own cars and have no where to park them in the first place. They rely on the government to transport them with subways, bus etc. I don't understand that and can't visualize living like that either. But they are the ones crying about their smog and levy the legislation that we have to deal with. Maybe electric cars will work for them. Just another one of those things I can't imagine about their life.

 

[Caustic Burno]

Isom the problem with your ball is it still takes oil to make electricty and the effiency goes down even further on the oil to electicty to the car. It is costing you more btu's to make the wheels on the bus go round and round. Now if the government went to building hydro electric dams and nuke plants you might have something. Now back to the EPA and not in my back yard we are not buiding these plants. The ones we have are switching from coal. Which we have the largest known reserves in the world due to the EPA BS.
We are regulating ourselves to death. Who at the EPA did you vote for that are making laws that effect your life. Do you think China, India etc are worrying about if they need a new refinery or to drill? Do you think they wait ten years to get a permit from the government to drill. Cuba is currently leasing drilling rights off our coast in waters our companies can't drill in. Russia has laid claim to more than half of the Artic circle for oil drilling, while we set by and say we can't. We have enough oil reserves to power this country for decades if not centuries that we are not allowed to drill for. We have billions of barrels sitting off our coast in Alaska and in the Dakota's that have been virtually untapped.
It is time to wake up in the energy race no one is playing by the EPA's rules and regulation but us.
We are putting the Apple Srings Eagles (6 Man ball) on the field against the Green Bay Packers thinking we are going to win..

 

[dieselbeef]

hence my thread on subsidizing fuel

reduce taxes and subsidize gas and oil...duh..

btw...keep yer health care bill also..73 billion dollar pit i hear now..swell

 

[E in PA]

another problem with electric. i don't know about where you are at, but here in my area there has been a cap on electric prices for about 15 years. that cap is set to expire this year.

 

[Cowdirt]

I don't believe the love affair that Americans have with cars is anywhere near passionate for the electric car yet. I realize that battery technology and distribution stations are making progress but It will take a quantum change in Americans to widely accept electric powered cars on a wide scale. I predict that as soon as government subsides for research, manufacturing and all the associated industries at the national, state and local levels stop; most electric cars will end up in museums and such. There will be other more acceptable alternatives than electricity. :2cents:

 

[dun]

Isoms Optomistic Reply.

Caustic, your post boils down to the price of fuel. High fuel prices drive ALL input costs higher for the cattleman. However, I predict than in the next 5-10 years the price of fuel will plummet. Why? Electric Automobiles. Nissan just released the first fully electric car (the LEAF) it will go over 100 miles on one charge. Over the next 5 years this industry will get better and better. We will see automobiles be able to go 300-500 miles on one charge. When this happens, the demand for fuel will drop causing a drop in fuel prices.

Seems like we've returned to the 50's, that's the same kinds of predictions for the future they made then

 

[chippie]

It's downright depressing

 

[Isomade]

Isoms Optomistic Reply.

Caustic, your post boils down to the price of fuel. High fuel prices drive ALL input costs higher for the cattleman. However, I predict than in the next 5-10 years the price of fuel will plummet. Why? Electric Automobiles. Nissan just released the first fully electric car (the LEAF) it will go over 100 miles on one charge. Over the next 5 years this industry will get better and better. We will see automobiles be able to go 300-500 miles on one charge. When this happens, the demand for fuel will drop causing a drop in fuel prices.

Seems like we've returned to the 50's, that's the same kinds of predictions for the future they made then

Or we could go back roughly 45 years before that when they boldly predicted "The automobile will never last, nothing can take the place of a horse." But I am sure you remember that like it was yesterday. ;-)

 

[backhoeboogie]

another problem with electric. i don't know about where you are at, but here in my area there has been a cap on electric prices for about 15 years. that cap is set to expire this year.

I sure hope voters or legislatures don't put a 15 year cap on cattle prices or hay prices. Especially if they do it when prices are down. I can't go tofu

 

[jkwilson]

I realize that battery technology and distribution stations are making progress but It will take a quantum change in Americans to widely accept electric powered cars on a wide scale. :2cents:

The problem is that battery technology ISN'T advancing. Most of the changes in the last 100 years have been in the area of physical durability; Better case materials, better spacers and better lead alloys. Capacity per pound and capacity per cubic inch have not advanced much at all. The few battery technologies that have advanced carry either extreme cost or are even more hazardous than acid filled batteries.

 

[backhoeboogie]

Weight too. Those batteries are heavy. It throws a lot of extra load on the cars.

Wind generation creates so much instability that practically all grids are having to be backfitted with the ability to shed loads to protect turbines. Better battery technology would help if wind could be put into batteries and stabilized. Until that happens, wind turbines are disasters waiting to happen. Conventional power plants are being asked to cut back on generation (now without compensation) and increase VARS. Who's gonna pay for this?

Hydro is rock solid and stable. We don't have enough capability in these parts to accomodate hydro. We, unfortunaately, have a good wind source.

In the mean time we are playing second fiddle to China in every way. They can produce everything with little enforced regulation. It helps on cost, it helps on production, and practically every avenue there is.

Hug a tree. Afterall, you can't beat them. You may as well join them it seems. Don't starve tho.

 

[bannedagain]

Seriously how can you not make money on calves at $1.23 Sept. delivery?

 

[backhoeboogie]

Seriously how can you not make money on calves at $1.23 Sept. delivery?

I am optimistic as well. Sold 5 weights Tuesday and it was an awesome deal at the sale barn. Check the prices. It was way over your Sept price. http://www.mlslivestock.com/new_page_6.html

The reports said we had a corn shortage back in the fall and corn futures went up, cattle dropped. They are now saying 2010 was the third best year ever for corn production (they admit to a mistake in their estimates) so corn prices are dropping, cattle are rising way up. Feedlots are running at 75% capacity and some have closed/combined because they cannot get the animals to fill them. People are dumping heifers because prices are good. What will that do to future production?

I dunno. I truly don't.

 

[TexasBred]

Corn is not going down. Was down one day due to some profit taking but up 12 3/4 today March and May. Farmers are already contracting some corn because lenders require it. That locks in a lot of it at the current high prices. Soybean meal well over $400 a ton in Texas with no relief in sight there either. I'd think heavier calves would continue to bring good money as it's cheaper to buy them at the heavier weights than to try to put weight on them.