Dire predictions?

[alexfarms]

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.

I didn't say cutting costs, I said cutting cost of production. In a free market, the best way for a single producer to increase profitability is by cutting cost of production. That is what producers who are making a living in cattle production should be looking to do.

 

[Jake]

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.

I didn't say cutting costs, I said cutting cost of production. In a free market, the best way for a single producer to increase profitability is by cutting cost of production. That is what producers who are making a living in cattle production should be looking to do.

Agreed

 

[toughntender]

I have been reading this topic with a lot of interest and it got me thinking about how too many "cattleman" have lost sight of what a beef animal is supposed to do. Cattle are supposed to take large amounts of forage and turn it into edible protein for human consumption. On this basis chicken and pork can not compete. Its only since we have strayed to far from what a cow is supposed to do that we fell off the tracks. To be profitable cattle need to do more of their own feed harvesting and less standing at a feed bunk. There's no point in trying to compete with pork or chicken on feed efficiency of grain, because we will get beat. It doesn't matter how far genetically we try to push our cattle, they will never get to the point where we are on par with pork or chicken. Where we need to be focusing our attention is not at the feedlot end, but on the cow/calf, and stocker end. That is where the true worth of a ruminant animal shines. There are millions of acres of grazing land being under utilized and where do we look to improve gains, the feedlot. We go to calf feds and eliminate the most profitable time of an animals life, the stocker phase. Then, we wonder why we are losing market share. We've increased our own cost of production by turning keys instead of letting our animals harvest their own feed. Then we have the gall to whine about our profitability, and blame exports for our problems. There is a reason that Argentina, Brazil, Australia, and a whole host of other countries can produce burger cheaper than we can, they let their animals to what they were meant to do.

 

[Backbone Ranch]

I have been reading this topic with a lot of interest and it got me thinking about how too many "cattleman" have lost sight of what a beef animal is supposed to do. Cattle are supposed to take large amounts of forage and turn it into edible protein for human consumption. On this basis chicken and pork can not compete. Its only since we have strayed to far from what a cow is supposed to do that we fell off the tracks. To be profitable cattle need to do more of their own feed harvesting and less standing at a feed bunk. There's no point in trying to compete with pork or chicken on feed efficiency of grain, because we will get beat. It doesn't matter how far genetically we try to push our cattle, they will never get to the point where we are on par with pork or chicken. Where we need to be focusing our attention is not at the feedlot end, but on the cow/calf, and stocker end. That is where the true worth of a ruminant animal shines. There are millions of acres of grazing land being under utilized and where do we look to improve gains, the feedlot. We go to calf feds and eliminate the most profitable time of an animals life, the stocker phase. Then, we wonder why we are losing market share. We've increased our own cost of production by turning keys instead of letting our animals harvest their own feed. Then we have the gall to whine about our profitability, and blame exports for our problems. There is a reason that Argentina, Brazil, Australia, and a whole host of other countries can produce burger cheaper than we can, they let their animals to what they were meant to do.

Well said. :clap:

 

[mojaxcow]

Amen!

 

[AllForage]

I have been reading this topic with a lot of interest and it got me thinking about how too many "cattleman" have lost sight of what a beef animal is supposed to do. Cattle are supposed to take large amounts of forage and turn it into edible protein for human consumption. On this basis chicken and pork can not compete. Its only since we have strayed to far from what a cow is supposed to do that we fell off the tracks. To be profitable cattle need to do more of their own feed harvesting and less standing at a feed bunk. There's no point in trying to compete with pork or chicken on feed efficiency of grain, because we will get beat. It doesn't matter how far genetically we try to push our cattle, they will never get to the point where we are on par with pork or chicken. Where we need to be focusing our attention is not at the feedlot end, but on the cow/calf, and stocker end. That is where the true worth of a ruminant animal shines. There are millions of acres of grazing land being under utilized and where do we look to improve gains, the feedlot. We go to calf feds and eliminate the most profitable time of an animals life, the stocker phase. Then, we wonder why we are losing market share. We've increased our own cost of production by turning keys instead of letting our animals harvest their own feed. Then we have the gall to whine about our profitability, and blame exports for our problems. There is a reason that Argentina, Brazil, Australia, and a whole host of other countries can produce burger cheaper than we can, they let their animals to what they were meant to do.

Great post! If one combines this answer with the frame score article (which I believe was written by Mr. Helmings as well) I think a balance comes into place. It still baffles me why those who don't have the scale allow the lots to determine their direction when the profit or loss is in their inputs. Between the consumption numbers, input costs, and land prices I think those with the right kind of stock and lowest inputs will survive.