Caustic's Crystal Ball

[papavillars]

I agree with part of the statement,but electricity will not rise as high as expected by this forum due to the price of natural gas. In Texas the coal industry is hurting. The electric companies have withdrawn over ten requests for coal fired electric power plants. I have two gas wells on my farm , located in Fairfield Texas, and my revenue checks are down 52 %. As far as batteries or as they are known in the industry power cells, they are making great strides. My son-in-law who has his phd in mechanical engineering specializes in alternative power sources. He helped to develop a new power cell to use in wind power technology. They are sure this cell will in the future be used in electric/ dual powered vehicles. Of course this year we are going to pay a higher price for fertilizer due to gas prices. Like most on this forum I am trying to decide when to sell and at what weight. A couple years ago natural gas prices were high but cattle prices were down. I guess I am being greedy but sure would like to have natural gas and cattle prices high.

 

[Caustic Burno]

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.

I don't see it going down either along with all other input cost.
Doesn't do much good to sell calves at a 1.50 a pound if input cost end up being a 1.60 a pound.
This looks a lot like the mid 70's when fuel prices skyrocketed and cattle prices bottomed out.
There are time's to hold them and time's to fold them.
The way I read the tea leaves we are going to have to be more efficient than we have ever been to survive.
Going to have to quit pretending and sharpen a pencil and count every input cost down to the penny.

 

[bannedagain]

caustic

what inputs are you unable to put in stone? or should i say why are they variable? if you cant make a profit at todays price why bet you can later?

 

[Cowdirt]

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.

Have you been watching the "rare earth" metals that are being used in new battery technology? Wall Street sure has. Guess what nation has the greatest supply of these metals? I'll give you a clue; the U.S.' greatest trade deficit is with this nation. That being said, I'll repeat my personal opinion; it will not be battery operated vehicles that will free us from imported oil.

 

[Isomade]

Everyone has an opinion, and that is fine. At the end of the day it is all speculation. I strongly believe that the electric automobile will have an impact on fuel prices. I do not think they will be "the end all be all" but will certainly have an impact. I jet set quite a bit. I spend time in a lot of big cities, and have observed the popularity growth of the electric car. There are two that I know of in my small home town. In the streets of San Diego they are very common. When, not if, but when they go 300 or more miles on a charge I will have one. That will be in the next 5-10 years. I put over 60,000 miles per year on a vehicle, that is a lot of fuel. Yes it will still take fuel to power the electric plant, but even Caustic, who know considerably more about fuel prices than I, can tell you that it takes considerably less fuel to convert electric energy than it does to power a fuel engine. Others have talked about hydrogen powered technology. My father-in-law is one of the best mechanics I have ever known. He uses hydrogen technology to increase the fuel mileage of his vehicles. He has a 1992 Chevy with a 350 engine that averages 36mpg. I have been keeping up with the advances in electric cars for the last four years, I don't just make assumptions from watching a tv show. I don't like the way things are heading any more than the rest of you, but I refuse to stick my head in the sand, sell my cattle, and say we are all doomed! And Caustic I haven't gotten just $550 for a calf in over a year. The calves I pulled off of first calf heifers at 5-6 months of age last week averaged $675.

 

[Caustic Burno]

Everyone has an opinion, and that is fine. At the end of the day it is all speculation. I strongly believe that the electric automobile will have an impact on fuel prices. I do not think they will be "the end all be all" but will certainly have an impact. I jet set quite a bit. I spend time in a lot of big cities, and have observed the popularity growth of the electric car. There are two that I know of in my small home town. In the streets of San Diego they are very common. When, not if, but when they go 300 or more miles on a charge I will have one. That will be in the next 5-10 years. I put over 60,000 miles per year on a vehicle, that is a lot of fuel. Yes it will still take fuel to power the electric plant, but even Caustic, who know considerably more about fuel prices than I, can tell you that it takes considerably less fuel to convert electric energy than it does to power a fuel engine. Others have talked about hydrogen powered technology. My father-in-law is one of the best mechanics I have ever known. He uses hydrogen technology to increase the fuel mileage of his vehicles. He has a 1992 Chevy with a 350 engine that averages 36mpg. I have been keeping up with the advances in electric cars for the last four years, I don't just make assumptions from watching a tv show. I don't like the way things are heading any more than the rest of you, but I refuse to stick my head in the sand, sell my cattle, and say we are all doomed! And Caustic I haven't gotten just $550 for a calf in over a year. The calves I pulled off of first calf heifers at 5-6 months of age last week averaged $675.

Been an interesting discussion the 550 bucks was number I pulled out of my ass after averageing the Crockett sale bale from lights to heavies, and what old Belle would have to make a year. The point is do you really know your input cost( not you personally) or you running welfare cattle. We as a group have little to no control over the sale price. We sale wholesale and buy retail.

 

[Caustic Burno]

caustic

what inputs are you unable to put in stone? or should i say why are they variable? if you cant make a profit at todays price why bet you can later?

Fuel and fertilizer are not set in stone. You have to realize we are further from the corn belt and the feedlots.
This increase's feed cost if you feed and reduces salebarn prices due to trucking. Here you are a grass farmer first and a Cattleman second. Grass is feed here and the only feed. You can't continuely take from your pasture and not put back as you are cutting units per acre. This is all effected by fertilizer prices.

 

[novatech]

caustic

what inputs are you unable to put in stone? or should i say why are they variable? if you cant make a profit at todays price why bet you can later?

Fuel and fertilizer are not set in stone. You have to realize we are further from the corn belt and the feedlots.
This increase's feed cost if you feed and reduces salebarn prices due to trucking. Here you are a grass farmer first and a Cattleman second. Grass is feed here and the only feed. You can't continuely take from your pasture and not put back as you are cutting units per acre. This is all effected by fertilizer prices.

Caustic; I feel the same as you. I have been researching the sustainable pasture systems for quite some time and somewhat redoing my pastures in those lines.
I always consider the source of information as to what people have to gain by giving it. Well a few weeks ago I spent a few hours visiting with a man named Gene Sollock in Iola. The man is 84 years old. I could find no way he could profit from any info he gave me. Although he does have to add lime he has not had to a fertilizer in 20 years. Driving up to his house I could see the pastures had stockpiled forage. Even though they were in drought conditions. You can find a lot of good info from him on Utube.
There are also sites were I am investigating no-till farming and want to apply it to pastures. Here is one with a lot of good info; http://www.youtube.com/user/NCATATTRA
The things being used today, as if they were new, are practices that were being used by farmers before commercial fertilizer. I believe we may need to at least partially revert back to some of it.
Although we read a lot about people that say they do not need to fertilize their pastures I take that with a grain of salt. There is only 1 element of the 3 which can feasible replaced by mother nature. That is N. P an K must be provided first before mother nature can provide the N. There are those that advocate planting deep rooted grasses to bring those elements from deep in the soil to the top but I don't have that many years left in my life. So I do believe there is also some initial expense involved. No I did not forget PH and lime. It is also going to be an expense in some cases.

 

[Stocker Steve]

The sharp pencil folks state that most producers do not capture all the costs of production, and that $150/cwt calves are needed to trigger cow herd expansion. Seems reasonable to me if you want to focus on market price rather than your own operation.

The sustainable folks state that producers have to reduce the amount of (increasingly expensive) inputs, and that mob grazing is a great tool to do this. Seems reasonable to me if you want to focus on variable cost that you control and thus buy in less material.

My 2011 gross margin projections look OK for all enterprises - - but I think the underlying issue is how much OH can you support for a beef animal. Can you afford to renovate adding lime and P and K and seed??? Can you afford to put in fence and water??? Can you afford to buy the hobby farm next door??? Can you afford to replace a tractor???

I think we all need to focus our niche even at these better 2011 prices. My calves did not sell for $150.

 

[novatech]

The sustainable folks state that producers have to reduce the amount of (increasingly expensive) inputs, and that mob grazing is a great tool to do this. Seems reasonable to me if you want to focus on variable cost that you control and thus buy in less material.

My 2011 gross margin projections look OK for all enterprises - - but I think the underlying issue is how much OH can you support for a beef animal. Can you afford to renovate adding lime and P and K and seed??? Can you afford to put in fence and water??? Can you afford to buy the hobby farm next door??? Can you afford to replace a tractor???

P and K are expensive and initially can break you just going into it. Fortunately they do not have to be replaced from year to year as they recycle fairly well. I do mine in 10 acre plots to ease the pain and also see if the program is really economically justifiable. Seed is the same for me. I do not plant anything that does not reseed or is not a perennial.

 

[Stocker Steve]

What do you figure per acre for total renovation cost, and how long does it take to get that back?

 

[Ryder]

Caustic's original post concerned $3 per gallon gasoline. Some are predicting $4 or higher in the very near future. Electric cars are not going to save the day in the next 2,3 years. Cattleman today in the real world cannot survive based on what "may" be 15 years from now.

Anybody with some available money may do well to hedge fuel prices by buying oil or gasoline.
You can't make it relying on pessimism. Can't make it relying on optimism either. Going to have to deal with what is real in the here and now.

 

[novatech]

What do you figure per acre for total renovation cost, and how long does it take to get that back?

The answer to that is dependant on your soil requirements. I had to add 85 lbs P per acre to one pasture that I planted in WW-B Dahl. I could not afford to do the entire pasture so I am doing it as I can afford it. 10 acre plots. This also allows me to experiment. The next step on that plot will be to plant a clover that will reseed. With a PH of 7.8 I needed no lime. Your location and soil conditions will be totally different so your costs will be different. I would also advise to initially do a small section at first. What works for someone else may not work for you and will allow you to figure cost on the rest of your property more accurately..

 

[Caustic Burno]

The price of crude effects the price of fertilizer as well, I have my pastures on a 3 year renovation schedule.
If you don't here you will have just about enough grass for the grasshoppers. That's another huge cost 300 grasshoppers eat a days worth of cow feed in a week. It is easy to have way more than that an acre and not think you have a problem.

 

[TexasBred]

I agree with part of the statement,but electricity will not rise as high as expected by this forum due to the price of natural gas. In Texas the coal industry is hurting. The electric companies have withdrawn over ten requests for coal fired electric power plants. I have two gas wells on my farm , located in Fairfield Texas, and my revenue checks are down 52 %. As far as batteries or as they are known in the industry power cells, they are making great strides. My son-in-law who has his phd in mechanical engineering specializes in alternative power sources. He helped to develop a new power cell to use in wind power technology. They are sure this cell will in the future be used in electric/ dual powered vehicles. Of course this year we are going to pay a higher price for fertilizer due to gas prices. Like most on this forum I am trying to decide when to sell and at what weight. A couple years ago natural gas prices were high but cattle prices were down. I guess I am being greedy but sure would like to have natural gas and cattle prices high.

$12.00 gas was a lot more fun wasn't it Papa. This $3.50 stuff is a killer.

 

[Caustic Burno]

caustic

what inputs are you unable to put in stone? or should i say why are they variable? if you cant make a profit at todays price why bet you can later?

Fuel and fertilizer are not set in stone. You have to realize we are further from the corn belt and the feedlots.
This increase's feed cost if you feed and reduces salebarn prices due to trucking. Here you are a grass farmer first and a Cattleman second. Grass is feed here and the only feed. You can't continuely take from your pasture and not put back as you are cutting units per acre. This is all effected by fertilizer prices.

Caustic; I feel the same as you. I have been researching the sustainable pasture systems for quite some time and somewhat redoing my pastures in those lines.
I always consider the source of information as to what people have to gain by giving it. Well a few weeks ago I spent a few hours visiting with a man named Gene Sollock in Iola. The man is 84 years old. I could find no way he could profit from any info he gave me. Although he does have to add lime he has not had to a fertilizer in 20 years. Driving up to his house I could see the pastures had stockpiled forage. Even though they were in drought conditions. You can find a lot of good info from him on Utube.
There are also sites were I am investigating no-till farming and want to apply it to pastures. Here is one with a lot of good info; http://www.youtube.com/user/NCATATTRA
The things being used today, as if they were new, are practices that were being used by farmers before commercial fertilizer. I believe we may need to at least partially revert back to some of it.
Although we read a lot about people that say they do not need to fertilize their pastures I take that with a grain of salt. There is only 1 element of the 3 which can feasible replaced by mother nature. That is N. P an K must be provided first before mother nature can provide the N. There are those that advocate planting deep rooted grasses to bring those elements from deep in the soil to the top but I don't have that many years left in my life. So I do believe there is also some initial expense involved. No I did not forget PH and lime. It is also going to be an expense in some cases.

That is one reason Bahia is king here, the lower cost to maintain while it has great survivabilty on poor soils while being heavily grazed. Our soil is so poor here you would have to sit on a sack of fetilize to raise an umbrella.

 

[bannedagain]

caustic

what inputs are you unable to put in stone? or should i say why are they variable? if you cant make a profit at todays price why bet you can later?

Fuel and fertilizer are not set in stone. You have to realize we are further from the corn belt and the feedlots.
This increase's feed cost if you feed and reduces salebarn prices due to trucking. Here you are a grass farmer first and a Cattleman second. Grass is feed here and the only feed. You can't continuely take from your pasture and not put back as you are cutting units per acre. This is all effected by fertilizer prices.

If you can profit at todays fuel and fert prices why do you not contract or pre pay those inputs, to lock in the prices. Or are you saying that at the current prices you are unable to make a profit?

 

[novatech]

That is one reason Bahia is king here, the lower cost to maintain while it has great survivabilty on poor soils while being heavily grazed. Our soil is so poor here you would have to sit on a sack of fetilize to raise an umbrella.

I take it the Red River Crab Grass you tried did not work out.

 

[Caustic Burno]

That is one reason Bahia is king here, the lower cost to maintain while it has great survivabilty on poor soils while being heavily grazed. Our soil is so poor here you would have to sit on a sack of fetilize to raise an umbrella.

I take it the Red River Crab Grass you tried did not work out.

Not well, it is still here. Bahia is taking it over it seems to need better soils than I have.

 

[Caustic Burno]

caustic

what inputs are you unable to put in stone? or should i say why are they variable? if you cant make a profit at todays price why bet you can later?

Fuel and fertilizer are not set in stone. You have to realize we are further from the corn belt and the feedlots.
This increase's feed cost if you feed and reduces salebarn prices due to trucking. Here you are a grass farmer first and a Cattleman second. Grass is feed here and the only feed. You can't continuely take from your pasture and not put back as you are cutting units per acre. This is all effected by fertilizer prices.

If you can profit at todays fuel and fert prices why do you not contract or pre pay those inputs, to lock in the prices. Or are you saying that at the current prices you are unable to make a profit?

I can profit at today's input cost. What worries me is beef prices as fuel goes so goes the American public.
Americans are going to drive first and will cut cost in other areas first. These input cost are not leaving a lot of room for a drop in cattle prices.