Dire predictions?

[glacierridge]

http://www.cnbc.com/id/101327276

If you do a web search of "worldwide beef shortage"... You'll see that this has been trending the last few years.
It's not necessarily only that people are eating less, but that there is less to eat as well.
Despite pink slime, despite recalls, people still like and eat beef.
And don't forget, there are a couple religions that won't touch pork so they can and do enjoy beef.

 

[smnherf]

Really people? This really is not that difficult. I realize everyone is high on record prices and think that because you are in the beef business people should pay more. Especially when some buy really expensive donor cows.

Here is the bottom line, if beef gets too expensive people will eat alternatives. End of story regardless of your opinion. Point number 2, to produce this higher demand for burger high growth cattle on feed for 180 days ain't workin and won't. Start thinking along these lines and it will make sense .

Cheers

I am familiar with the concept of alternatives to eating beef and with the concept of inelastic and elastic demand, but at what point is the price of beef so high that we cant sell it? This has been talked about for the past 20 years even when beef was still at $.80 a pound. As someone stated earlier, hamburger demand doesn't drive the beef market.

You cant look at the price of beef in a vacuum either. If it was too expensive in relation to other meats or meat alternatives, then then it would be rotting on the store shelves. I ran into a former neighbor the other day and he had a CAB loin in his cart and bought it for 6.99 a lb. That doesn't sound to bad too me.

 

[greybeard]

gasoline-1975-$.57/gal
Gasoline-2012-$3.30/gal.
A five fold increase.
How many have given up driving and started walking?
Not many.

 

[Chuckie]

Our grocery stores mark down meats that get within one day of the expired date. When they put the colored sticker on it, people are all over it. The only reason it didn't sell I believe is because of the person cutting one side thin and one side thick. One of the steaks is much smaller than the rests. But it looks really nice when they reduce the price. I have trouble believing that anything is thrown away.
Someone here on the forum had made the remark here that the bulls with the real plump full rumps were not desirable because it was not a steak cut. More American's eat ground beef than steak. Many other cuts come from the rump as well.
I really like the flank and skirt steaks; cook them rare; slice them against the grain of the meat, and it sure makes for some good eating.
I usually see more people in the beef section.

 

[TennesseeTuxedo]

gasoline-1975-$.57/gal
Gasoline-2012-$3.30/gal.
A five fold increase.
How many have given up driving and started walking?
Not many.

Driving habits have changed. Remember going out for a Sunday drive? Who does that anymore?

 

[Aaron]

gasoline-1975-$.57/gal
Gasoline-2012-$3.30/gal.
A five fold increase.
How many have given up driving and started walking?
Not many.

Driving habits have changed. Remember going out for a Sunday drive? Who does that anymore?

Still do and quite a few people around here still do. Not real often but maybe once every month or two.

 

[Tim/South]

The packer and retail markets suggest growers should settle for less since corn prices have fallen and our input is less. Our CO-OP is still charging $257 a ton for bulk feed. I have not seen the trickle down effect of low corn prices reach me yet.
What happened last summer when the retail market set 8 new record high prices during a 4 week span? Our sale prices dropped 20 cents. Packers and retailers made a killing and we took a loss. Cattle producers do not have a built in profit margin. We produce a product then carry it to auction and ask, "What will you give me for it?"
The U.S. cattle herd will never be what it once was. Consumers need to adjust. The dollar does not go as far in any area as it once did, probably never will. It is the U.S. economics that are out of order more than anything else.
Who is going to be raising beef in 15 years? The age of the American cattle producer is getting long in the tooth.
How many members on this forum will still be in the cattle business 10 - 15 years from now?
How many young people in our communities will be raising calves in 10-15 years?

Beef prices are not high. They are where they should have been all along. What other industry would have stayed in business on the meager profits we have been working under?
There will always be a need for beef. Whether the consumer will be willing to sacrifice in other areas in order to purchase beef is the question.
Exports are fickle. We can not depend on them in the long haul.
Now there is talk of boxed beef imports being allowed to help the consumer.

 

[Farmerjon]

I sell my freezer beef for what good ground beef is sold for. This year our freezer beef will cost my customers $2.95 a pound hanging weight. They pay the processing. Since I have started explaining to them that the cost makes their hamburger a little higher than the store, their steaks are quite a bit cheaper. My wife has started mailing customers recipes for crockpots/roasts and our customers are saying they are helpful. So what we decided was to help them use their beef to its fullest potential instead of them giving away a bunch of cuts they didn't understand how to use. It seems to be something they enjoy. Am I selling enough freezer beef to make my living off of it? No. Sell 10 a year. But it is a start and makes me an acceptable profit margin.

I had an old cow one time cut into all hamburger. She cost more to process than if I had her cut normally. They said all the deboning. So making all hamburger isn't a good alternative. The grocery stores I am sure take those old steaks and grind and mix them into their cheap chuck roast/hamburger.

I don't have any solutions. But am enjoying this conversation and what you folks are quoting and sharing. Just thought I would throw my two cents in.

 

[Chevyman]

Let me try this again for those who can't look pass their noses. The sales statistics don't lie. Nobody is saying you have to receive lower prices but we all raise a commodity. The market will determine its worth. Now no matter who or where this ground beef goes to is not relevant! The color of the sky is blue in case some you were confused.

Bottom line is we do not need to fill feedlots with expensive inputs to supply the growing ground beef market. This is not something you and I can probably change but the big boys better figure it out before they crash our industry.

I gets the feeling some here don't get too far from their porch......or keyboard very often.

 

[alexfarms]

Let me try this again for those who can't look pass their noses. The sales statistics don't lie. Nobody is saying you have to receive lower prices but we all raise a commodity. The market will determine its worth. Now no matter who or where this ground beef goes to is not relevant! The color of the sky is blue in case some you were confused.

Bottom line is we do not need to fill feedlots with expensive inputs to supply the growing ground beef market. This is not something you and I can probably change but the big boys better figure it out before they crash our industry.

I gets the feeling some here don't get too far from their porch......or keyboard very often.

"Nobody is saying you have to receive lower prices but we all raise a commodity. The market will determine its worth....
....Bottom line is we do not need to fill feedlots with expensive inputs to supply the growing ground beef market."

I think this is pretty much what Mr Helming is driving at. He has suggested feed yards feed roughage based rations instead of corn based rations for a hamburger market. Not no corn, just less. If I understand him right, he is saying the market grading system needs to be changed to encourage it to happen. I'm not sure exactly what changes in the grading system would encourage that to happen.

 

[smnherf]

Let me try this again for those who can't look pass their noses. The sales statistics don't lie. Nobody is saying you have to receive lower prices but we all raise a commodity. The market will determine its worth. Now no matter who or where this ground beef goes to is not relevant! The color of the sky is blue in case some you were confused.

Bottom line is we do not need to fill feedlots with expensive inputs to supply the growing ground beef market. This is not something you and I can probably change but the big boys better figure it out before they crash our industry.

I gets the feeling some here don't get too far from their porch......or keyboard very often.

True, the sales statistics are what they are, but they don't tell the whole story about why they are what they are. You cant blame it on price alone as there are lots and lots of reasons why per capita beef consumption is down.

The market is determining its worth right now and it is still telling us to produce choice cattle.

I have a feeling that those that are so embarrassed by the high price of beef haven't had too much manure on their boots for a long time either.

 

[smnherf]

Let me try this again for those who can't look pass their noses. The sales statistics don't lie. Nobody is saying you have to receive lower prices but we all raise a commodity. The market will determine its worth. Now no matter who or where this ground beef goes to is not relevant! The color of the sky is blue in case some you were confused.

Bottom line is we do not need to fill feedlots with expensive inputs to supply the growing ground beef market. This is not something you and I can probably change but the big boys better figure it out before they crash our industry.

I gets the feeling some here don't get too far from their porch......or keyboard very often.

"Nobody is saying you have to receive lower prices but we all raise a commodity. The market will determine its worth....
....Bottom line is we do not need to fill feedlots with expensive inputs to supply the growing ground beef market."

I think this is pretty much what Mr Helming is driving at. He has suggested feed yards feed roughage based rations instead of corn based rations for a hamburger market. Not no corn, just less. If I understand him right, he is saying the market grading system needs to be changed to encourage it to happen. I'm not sure exactly what changes in the grading system would encourage that to happen.

I don't see how changing the grading system will encourage more production of hamburger. The market, if it is functioning properly will simple adjust its pricing according to the demand for the meat within the system whether it is the new system or the current one.

There are lots of outside forces affecting beef production. If we want to increase production of US beef, we need to focus on creating an environment that will encourage people to enter the cow calf business and the only way that is going to happen is if we have a sustained period of good profits in that sector, otherwise, we will continue to see cow numbers shrink.

 

[Jake]

Why do we as American beef producers what to produce the cheapest hamburger? Why don't we want to produce quality meats that can be exported and then in turn import hamburger quality meat? Is there a true advantage for the American producer to hit the hamburger market as oppose to relying on trade to increase the value of our commodity?

 

[alexfarms]

Why do we as American beef producers what to produce the cheapest hamburger? Why don't we want to produce quality meats that can be exported and then in turn import hamburger quality meat? Is there a true advantage for the American producer to hit the hamburger market as oppose to relying on trade to increase the value of our commodity?

Why would you want imports? Imports just put US producers out of business. We need the hamburger market for the portions of the carcass that don't sell as the high price cuts. 25% of the finished beef carcass yield is ground beef. We need to increase demand. Being as price competitive as possible is one way to increase demand. Improving quality is another way of increasing demand. We are losing demand. US per capita consumption of beef is declining while pork and chicken are increasing. We have to be competitive. Decreasing cost of production is one way of becoming more price competitive. Since 1976, the per capita consumption of beef has dropped 40%, while the per capita consumption of chicken has nearly doubled. Ground beef and boneless chicken breast are about the same price per pound and the rest of the chicken meat is 1/2 the price of ground beef. Just since 2006, the price of boneless chicken breast has gone up 30 cents/pound and ground beef has gone up over $1/pound.

 

[Jake]

Why would you want imports? Imports just put US producers out of business. We need the hamburger market for the portions of the carcass that don't sell as the high price cuts. 25% of the finished beef carcass yield is ground beef. We need to increase demand. Being as price competitive as possible is one way to increase demand. Improving quality is another way of increasing demand. We are losing demand. US per capita consumption of beef is declining while pork and chicken are increasing. We have to be competitive. Decreasing cost of production is one way of becoming more price competitive. Since 1976, the per capita consumption of beef has dropped 40%, while the per capita consumption of chicken has nearly doubled. Ground beef and boneless chicken breast are about the same price per pound and the rest of the chicken meat is 1/2 the price of ground beef. Just since 2006, the price of boneless chicken breast has gone up 30 cents/pound and ground beef has gone up over $1/pound.

If imports are going to put you out of business you better figure out how to produce hamburger at a price that is competitive against imported beef. Probably better be competitive against chicken if that's that market share you want back. I personally don't want the USA to compete for the hamburger market. That makes my calves worth a helluva lot less if their purpose is to supply the microwavable dinner crowd. Cattle prices will have to drop significantly to buy that market share.

Also I don't care if total consumption is down if profit and total value of my product is up. Why would I want to produce and sell more for less value and profit margin?
http://www.ers.usda.gov/topics/animal-p ... ation.aspx

We are never going to compete with chicken from a price standpoint, there is no way to mass produce that many cattle to do it. So why not strive for a premium beef product that is worth more per serving.

I've have to run at the moment so I will follow up with more research later. But the beef industry trying to compete against chicken for the microwave meal American is a losing battle. There are other angles to increase the value of our product both domestic and oversees.

 

[alexfarms]

Why would you want imports? Imports just put US producers out of business. We need the hamburger market for the portions of the carcass that don't sell as the high price cuts. 25% of the finished beef carcass yield is ground beef. We need to increase demand. Being as price competitive as possible is one way to increase demand. Improving quality is another way of increasing demand. We are losing demand. US per capita consumption of beef is declining while pork and chicken are increasing. We have to be competitive. Decreasing cost of production is one way of becoming more price competitive. Since 1976, the per capita consumption of beef has dropped 40%, while the per capita consumption of chicken has nearly doubled. Ground beef and boneless chicken breast are about the same price per pound and the rest of the chicken meat is 1/2 the price of ground beef. Just since 2006, the price of boneless chicken breast has gone up 30 cents/pound and ground beef has gone up over $1/pound.

If imports are going to put you out of business you better figure out how to produce hamburger at a price that is competitive against imported beef. Probably better be competitive against chicken if that's that market share you want back. I personally don't want the USA to compete for the hamburger market. That makes my calves worth a helluva lot less if their purpose is to supply the microwavable dinner crowd. Cattle prices will have to drop significantly to buy that market share.

Also I don't care if total consumption is down if profit and total value of my product is up. Why would I want to produce and sell more for less value and profit margin?
http://www.ers.usda.gov/topics/animal-p ... ation.aspx

We are never going to compete with chicken from a price standpoint, there is no way to mass produce that many cattle to do it. So why not strive for a premium beef product that is worth more per serving.

I've have to run at the moment so I will follow up with more research later. But the beef industry trying to compete against chicken for the microwave meal American is a losing battle. There are other angles to increase the value of our product both domestic and oversees.

Its not a choice between a hamburger or whole meats market. It should be that we go after both. Its also not a question of giving up profitability to lower market prices, it ought to be a question of how to lower cost of production to increase profitability at times of lower prices.

 

[Jake]

Why would you want imports? Imports just put US producers out of business. We need the hamburger market for the portions of the carcass that don't sell as the high price cuts. 25% of the finished beef carcass yield is ground beef. We need to increase demand. Being as price competitive as possible is one way to increase demand. Improving quality is another way of increasing demand. We are losing demand. US per capita consumption of beef is declining while pork and chicken are increasing. We have to be competitive. Decreasing cost of production is one way of becoming more price competitive. Since 1976, the per capita consumption of beef has dropped 40%, while the per capita consumption of chicken has nearly doubled. Ground beef and boneless chicken breast are about the same price per pound and the rest of the chicken meat is 1/2 the price of ground beef. Just since 2006, the price of boneless chicken breast has gone up 30 cents/pound and ground beef has gone up over $1/pound.

If imports are going to put you out of business you better figure out how to produce hamburger at a price that is competitive against imported beef. Probably better be competitive against chicken if that's that market share you want back. I personally don't want the USA to compete for the hamburger market. That makes my calves worth a helluva lot less if their purpose is to supply the microwavable dinner crowd. Cattle prices will have to drop significantly to buy that market share.

Also I don't care if total consumption is down if profit and total value of my product is up. Why would I want to produce and sell more for less value and profit margin?
http://www.ers.usda.gov/topics/animal-p ... ation.aspx

We are never going to compete with chicken from a price standpoint, there is no way to mass produce that many cattle to do it. So why not strive for a premium beef product that is worth more per serving.

I've have to run at the moment so I will follow up with more research later. But the beef industry trying to compete against chicken for the microwave meal American is a losing battle. There are other angles to increase the value of our product both domestic and oversees.

Its not a choice between a hamburger or whole meats market. It should be that we go after both. Its also not a question of giving up profitability to lower market prices, it ought to be a question of how to lower cost of production to increase profitability at times of lower prices.

Being able to lower cost of production will only happen will major changes to the industry. The free market is determining what the production costs are at the moment and without incentives to make a change the production model of beef is not going to change in this nation. It will be very hard to confine cattle into mass production systems to get the economies of scale enough to pay. As long as there are large land masses of grass the market will find a way to price that input into the production model. Unless the government steps on and subsidizes cattle production.

 

[alexfarms]

Its not a choice between a hamburger or whole meats market. It should be that we go after both. Its also not a question of giving up profitability to lower market prices, it ought to be a question of how to lower cost of production to increase profitability at times of lower prices.

Being able to lower cost of production will only happen will major changes to the industry. The free market is determining what the production costs are at the moment and without incentives to make a change the production model of beef is not going to change in this nation. It will be very hard to confine cattle into mass production systems to get the economies of scale enough to pay. As long as there are large land masses of grass the market will find a way to price that input into the production model. Unless the government steps on and subsidizes cattle production.

Its got nothing to do with the govt stepping in, it has to do with people wanting to make money. That should be incentive enough, but it doesn't seem to be. The surest way to increase income is to cut cost of production. For some reason that just doesn't seem to be of interest to many people in the cattle business today. It could have something to do with the number of cattle producers who actually make a living from cattle production. Of course, with the current high prices, it is understandable.

 

[Jake]

Its not a choice between a hamburger or whole meats market. It should be that we go after both. Its also not a question of giving up profitability to lower market prices, it ought to be a question of how to lower cost of production to increase profitability at times of lower prices.

Being able to lower cost of production will only happen will major changes to the industry. The free market is determining what the production costs are at the moment and without incentives to make a change the production model of beef is not going to change in this nation. It will be very hard to confine cattle into mass production systems to get the economies of scale enough to pay. As long as there are large land masses of grass the market will find a way to price that input into the production model. Unless the government steps on and subsidizes cattle production.

Its got nothing to do with the govt stepping in, it has to do with people wanting to make money. That should be incentive enough, but it doesn't seem to be. The surest way to increase income is to cut cost of production. For some reason that just doesn't seem to be of interest to many people in the cattle business today. It could have something to do with the number of cattle producers who actually make a living from cattle production. Of course, with the current high prices, it is understandable.

Cutting costs only increases profitability if production levels stay constant. With the availability of feedstuffs and ethanol by products input costs across the board are relatively cheap compared to prices at the moment. If a person pays attention to margin and return on investment there is no reason to not be making money right now. It is the producers that can adapt to current market environments that will always be successful. This is a very dynamic industry as it must be to be commodity production.

 

[Howdyjabo]

Its not economical to "finish" cattle in this area. But we can grow them very efficiently.
I think the market is going to change and I am buying some bottle calves betting on the change.

I am going to grow them out to 1400lbs and sell them into the local cow/bull market. I think there will be a severe shortage of cull cows and the price between culls and fat cattle will shrink more.
Secondly there is going to be too much competition for calves because there is going to be a shortage of them too. So I need to figure out how to make more off of fewer calves Right now that looks to be by keeping them longer and sell more lbs/calf without getting into finishing.

Cow calf producer is going to be in the drivers seat , probably for the rest of my life.