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Finally someone sees what is going on!

ddg1263

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7/1/2009 2:55:00 PM


R-CALF: Consumers Pay Near Record Beef Prices



Billings, Mont. – While meatpacker giant Tyson Fresh Meats (Tyson) continues its legal action to seize the home of Herreid, S.D., rancher Herman Schumacher, consumers pay near record beef prices and cattle ranchers like Schumacher receive below cost-of-production prices for their cattle.



In 22 of the past 23 months, U.S. cattle ranchers like Schumacher suffered horrendous losses, which exceeded $300 per head in late 2008 and early 2009 (see Fed Cattle Returns chart below). But, while cattle ranchers reel from low cattle prices, consumers continue to pay at or near record retail prices for beef, with Choice beef prices jumping over the $4 mark in February 2007 and reaching all-time highs in late 2008 and early 2009 (see Retail Choice Beef Prices chart below).



According to U.S. Department of Agriculture (USDA) data, in the first quarter of 2009 U.S. cattle ranchers received the smallest share of the consumer’s beef dollar in seven years. The price paid to U.S. cattle ranchers in May 2009 for raising a Choice beef steer from birth to about 18 months of age was approximately $1,059. Consumers, however, who purchased the Choice beef after the packer slaughtered the animal, paid about $2,168 for the meat.



“In other words, the markup on beef was more than twice the value received by the rancher after he or she had raised the animal for about a year and a half, which means the middlemen – the packers and retailers that only held the beef for a matter of days – captured unjust profits away from the rancher and exploited the consumer,” pointed out R-CALF USA CEO Bill Bullard. “In May 2009, the producer received only 43 percent of the consumer’s beef dollar.



“In a competitive marketplace, consumers would not pay long-term record beef prices while cattle producers suffer long-term, below cost-of-production prices,” he continued. “However, the fact this is happening demonstrates that U.S. cattle producers and consumers have lost their competitive marketplace.



“Schumacher dared to do what USDA failed to do for more than a decade,” emphasized Bullard. “He took Tyson to task and filed a lawsuit alleging that Tyson and other packers had taken unlawful advantage of cattle producers by violating the Packers and Stockyards Act (PSA).”



A federal jury charged with deciding the facts in the case agreed with Schumacher, finding that Tyson and other packers violated the PSA and finding that the damages were not small. The jury awarded Schumacher and other cattle producers $9.25 million. However, on appeal the jury’s verdict was overturned – not because Tyson and the other packers did not damage cattle producers, but rather, because the court found that it must be proven that packers intentionally violated the PSA in order for producers to receive any protection.



“Schumacher proved, by a jury’s decision – the anchor in our Constitution - that Tyson’s actions in the marketplace damaged U.S. cattle ranchers, and the fact that an appellate court refused to sanction Tyson does not lesson the harmful impact on ranchers like Schumacher and on consumers,” said Bullard.



Bullard said the group is calling on USDA and the U.S. Department of Justice to take immediate steps to protect U.S. family farmers and ranchers from the ongoing, anticompetitive practices that are disrupting the competitive market, both for consumers and producers.
 

Alberta farmer

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The other day I was in a super market buying some stuff and I took a stroll by the meat case. Top sirloin steak was over $13/kilo(about $6/lb.). Hamburger was $3.75/lb. I got talking to this old fella and he said he thought cattle prices were coming down so how come beef is going up? I told him it was just like gas prices...charge all the market will bare! It's summer, bbq season, and the store can stick it to the consumer.
I think for many cattle producers the time has come to realize the system has evolved to the point where they are never going to get a fair share of the consumers dollar? The big packers/retailers are just too strong and will take the lions share no matter what supply and demand dictate? Just like the hog guys, cattle producers are going to work for next to nothing or in a lot of cases pay to raise cattle. Now myself I don't mind working for a pittance by I will be damned if I will pay to work!
I intend to get out this fall. Over 100 years my family has been in the cow business, but I've read the writing on the wall, and I'm getting out. I suspect a good portion of the cattlemen in Alberta are thinking the same way.
My neighbor once wondered "Who is going to feed the people if all farmers quit?" I told him don't worry South America can do it!
I intend to start ripping up land this fall and I have a good grain farmer relative who will rent it on a crop share deal. He has rented my other crop land for many years and does a good job and is totally fair and honest. I will need to add some bin space but over the last several years I have usually averaged about $80/acre from the crop share. Now I'm no spring chick(mid 50s) and I have some other interests, so I figure its time to smell the roses a bit. I am no longer interested in feeding the world for free!
 

Bez+

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Alberta farmer":3brisc2b said:
The other day I was in a super market buying some stuff and I took a stroll by the meat case. Top sirloin steak was over $13/kilo(about $6/lb.). Hamburger was $3.75/lb. I got talking to this old fella and he said he thought cattle prices were coming down so how come beef is going up? I told him it was just like gas prices...charge all the market will bare! It's summer, bbq season, and the store can stick it to the consumer.
I think for many cattle producers the time has come to realize the system has evolved to the point where they are never going to get a fair share of the consumers dollar? The big packers/retailers are just too strong and will take the lions share no matter what supply and demand dictate? Just like the hog guys, cattle producers are going to work for next to nothing or in a lot of cases pay to raise cattle. Now myself I don't mind working for a pittance by I will be damned if I will pay to work!
I intend to get out this fall. Over 100 years my family has been in the cow business, but I've read the writing on the wall, and I'm getting out. I suspect a good portion of the cattlemen in Alberta are thinking the same way.
My neighbor once wondered "Who is going to feed the people if all farmers quit?" I told him don't worry South America can do it!
I intend to start ripping up land this fall and I have a good grain farmer relative who will rent it on a crop share deal. He has rented my other crop land for many years and does a good job and is totally fair and honest. I will need to add some bin space but over the last several years I have usually averaged about $80/acre from the crop share. Now I'm no spring chick(mid 50s) and I have some other interests, so I figure its time to smell the roses a bit. I am no longer interested in feeding the world for free!

We have been going that way for the past couple of years.

As I write, my wife has contracted to clear another 45 acres of bush land, tile it and prep it for seeding.

I got 25-30 pics in the mail - the shovels are working and the boys are hard at hauling any rock fences out. The trees are sold and any wood left over will be split three ways evenly - so they get cleaned up for free by the neighbours and I get a couple more years of firewood.

We have a renter in the wings who has dealt with us for many years on other things - he will take it over - all the work will be paid for over the next 5-6 years of rent.

We now clear far more money on land rental than we have made on cattle in a lot of years.

So we now are truly at the hobby stage - let someone else do the work and pay me the rent. We will keep about seven animals for feeding family and friends - oh, the renter has promised to provide the hay to feed those cows as part of the deal. So the feed is free to us. Or mostly free - I let him use our round baler to put up the hay. Wear and tear on a 14 year old baler that will do about 70 six foot bales a year is minimal - baler is paid for and worthless (written down as far as it can go) anyways.

Alberta Farmer - you and I are the same age.

I got tired of working off the farm to support the cows.

Good luck to you

Bez+
 

Oldtimer

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Bez+":lym34qz3 said:
Alberta farmer":lym34qz3 said:
The other day I was in a super market buying some stuff and I took a stroll by the meat case. Top sirloin steak was over $13/kilo(about $6/lb.). Hamburger was $3.75/lb. I got talking to this old fella and he said he thought cattle prices were coming down so how come beef is going up? I told him it was just like gas prices...charge all the market will bare! It's summer, bbq season, and the store can stick it to the consumer.
I think for many cattle producers the time has come to realize the system has evolved to the point where they are never going to get a fair share of the consumers dollar? The big packers/retailers are just too strong and will take the lions share no matter what supply and demand dictate? Just like the hog guys, cattle producers are going to work for next to nothing or in a lot of cases pay to raise cattle. Now myself I don't mind working for a pittance by I will be damned if I will pay to work!
I intend to get out this fall. Over 100 years my family has been in the cow business, but I've read the writing on the wall, and I'm getting out. I suspect a good portion of the cattlemen in Alberta are thinking the same way.
My neighbor once wondered "Who is going to feed the people if all farmers quit?" I told him don't worry South America can do it!
I intend to start ripping up land this fall and I have a good grain farmer relative who will rent it on a crop share deal. He has rented my other crop land for many years and does a good job and is totally fair and honest. I will need to add some bin space but over the last several years I have usually averaged about $80/acre from the crop share. Now I'm no spring chick(mid 50s) and I have some other interests, so I figure its time to smell the roses a bit. I am no longer interested in feeding the world for free!

We have been going that way for the past couple of years.

As I write, my wife has contracted to clear another 45 acres of bush land, tile it and prep it for seeding.

I got 25-30 pics in the mail - the shovels are working and the boys are hard at hauling any rock fences out. The trees are sold and any wood left over will be split three ways evenly - so they get cleaned up for free by the neighbours and I get a couple more years of firewood.

We have a renter in the wings who has dealt with us for many years on other things - he will take it over - all the work will be paid for over the next 5-6 years of rent.

We now clear far more money on land rental than we have made on cattle in a lot of years.

So we now are truly at the hobby stage - let someone else do the work and pay me the rent. We will keep about seven animals for feeding family and friends - oh, the renter has promised to provide the hay to feed those cows as part of the deal. So the feed is free to us. Or mostly free - I let him use our round baler to put up the hay. Wear and tear on a 14 year old baler that will do about 70 six foot bales a year is minimal - baler is paid for and worthless (written down as far as it can go) anyways.

Alberta Farmer - you and I are the same age.

I got tired of working off the farm to support the cows.

Good luck to you

Bez+

Well I'm a little older than you two- but am doing much the same thing...Especially with the farming and all the work that takes expensive iron...Leased out the wheat/crop land on a crop share- and have my hayland put up on a share basis now...No more fighting all the time with breakdowns and worn out equipment- that is almost impossible to replace anymore at the prices they want....I am keeping the cows- altho cutting back on numbers and input there too- using mostly only the deeded pastures as the lease prices have went too high...Slowly letting my son buy those out from me- altho he has too good a job to put in full time, so now I am the (free) hired help like he was for me for years...
If we don't get a good rain soon- there will be no dryland wheat left to worry about...Irrigated wheat fields are late this year because of the cold spring- but at least aren't burning up...
 

ddg1263

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Well I'm a little older than you two- but am doing much the same thing...Especially with the farming and all the work that takes expensive iron...Leased out the wheat/crop land on a crop share- and have my hayland put up on a share basis now...No more fighting all the time with breakdowns and worn out equipment- that is almost impossible to replace anymore at the prices they want....I am keeping the cows- altho cutting back on numbers and input there too- using mostly only the deeded pastures as the lease prices have went too high...Slowly letting my son buy those out from me- altho he has too good a job to put in full time, so now I am the (free) hired help like he was for me for years...
If we don't get a good rain soon- there will be no dryland wheat left to worry about...Irrigated wheat fields are late this year because of the cold spring- but at least aren't burning up...

I am telling you this stuff is sad. If it was the ecconomy it would be different, but it isn't. Our sales may tail spin from the economy from here on out, but what these guys are experiencing is a travisty. Tyson foods should be ashamed.
 

Alberta farmer

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Heres how I see it:
When we consider expenses and income, we hope to make something at the end of the day. My figures are fairly accurate for my area....yours might be a lot different.
The cost of a bred cow is about $1000. The $1000 dollar investment carries a 5% interest charge every year she is around...whether it is the banks money or your own...so $50?
That same cow will bring about $600 when she is culled, hopefully after 8 live calves at an average of 10 years old. Lots of cows go longer than ten years old...a lot never make it to that age! So you lose $400 over 8 calves or $50/year?
To breed that cow will cost you from $25 to $35 a year, so we will say $30 on average.
Salt and mineral are about $20/year?
Vaccine and vet costs another $20?
Fence and corrals another $20?
Winter feed and bedding at $1 day for 180 days is $180?
Pasture costs again at a $1/day for 185 days is $185?
Cost to deliver the feed and bedding is about $40?
Selling costs and transportation about $25?
Total costs excluding labor $620!

Income is on an average 600 lb calf(heifers and steers)
At $1.10/lb it works out to $660.
However I know very few people raising commercial cattle who get a consistant 100% calf crop so lets lower that to 97%...now your $660 is actually $640.20!
Your profit potential is now $20.20/cow!

A couple of other things should be considered? How about some labor for your efforts? How about the cost of checking cows(fuel, quad, horse...whatever)? How about the lost "opportunity costs"? I would like to think I could get paid at least minimum wage for my work(I could go become a Walmart greeter for that). How many hours do you spend checking cows, calving cows, pulling calves, treating and processing calves, hauling cattle around? Even if you figure that at 10 hours per cow per year it adds up to $70?
Lost opportunity cost. If I am renting my own land to myself for pasture at the grazing cost of $1/day I figure 180 days gets me $64.29/acre($180 divided by 2.8 acres)? If I can cash rent that same land for $80/acre(just about all of it)then I'm losing another $43.99/cow by grazing it?
If you like to get paid minimum wage and you like to get paid rent on your property your profit potential is now a negative number...like $93.79/cow! In other words you are actually paying $93.79 for the priveledge of feeding the world with cheap beef! Obviously this is not sustainable.
I have a cow herd of 160 cows. I will be much better off without them. I wonder if Walmart is hiring?
 

Bez+

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Alberta farmer":2fosipag said:
Heres how I see it:
When we consider expenses and income, we hope to make something at the end of the day. My figures are fairly accurate for my area....yours might be a lot different.
The cost of a bred cow is about $1000. The $1000 dollar investment carries a 5% interest charge every year she is around...whether it is the banks money or your own...so $50?
That same cow will bring about $600 when she is culled, hopefully after 8 live calves at an average of 10 years old. Lots of cows go longer than ten years old...a lot never make it to that age! So you lose $400 over 8 calves or $50/year?
To breed that cow will cost you from $25 to $35 a year, so we will say $30 on average.
Salt and mineral are about $20/year?
Vaccine and vet costs another $20?
Fence and corrals another $20?
Winter feed and bedding at $1 day for 180 days is $180?
Pasture costs again at a $1/day for 185 days is $185?
Cost to deliver the feed and bedding is about $40?
Selling costs and transportation about $25?
Total costs excluding labor $620!

Income is on an average 600 lb calf(heifers and steers)
At $1.10/lb it works out to $660.
However I know very few people raising commercial cattle who get a consistant 100% calf crop so lets lower that to 97%...now your $660 is actually $640.20!
Your profit potential is now $20.20/cow!

A couple of other things should be considered? How about some labor for your efforts? How about the cost of checking cows(fuel, quad, horse...whatever)? How about the lost "opportunity costs"? I would like to think I could get paid at least minimum wage for my work(I could go become a Walmart greeter for that). How many hours do you spend checking cows, calving cows, pulling calves, treating and processing calves, hauling cattle around? Even if you figure that at 10 hours per cow per year it adds up to $70?
Lost opportunity cost. If I am renting my own land to myself for pasture at the grazing cost of $1/day I figure 180 days gets me $64.29/acre($180 divided by 2.8 acres)? If I can cash rent that same land for $80/acre(just about all of it)then I'm losing another $43.99/cow by grazing it?
If you like to get paid minimum wage and you like to get paid rent on your property your profit potential is now a negative number...like $93.79/cow! In other words you are actually paying $93.79 for the priveledge of feeding the world with cheap beef! Obviously this is not sustainable.
I have a cow herd of 160 cows. I will be much better off without them. I wonder if Walmart is hiring?

Our numbers are similar - except I get more for land rent than you do.

Depending on the land I can get from 100 - 150 bucks an acre for land rent.

It would take a heck of a pile of cows to get me that kind of money - so we are basically just hobby folks now.

Does not bother me at all - when the money comes back into the system I will be happy to raise a few extra head

No matter how much "fun" cattle can be - they are not making money - which is fine of you are capable of paying for your hobby - but as a business you had better not have a mortgage and machinery payments - unless you have a great off farm job. And if you do the two jobs to support the farm you run into the time issue - working on fences by headlight is not all it is cracked up to be.

Time and quality of life are issues that sooner or later begin to be important.

Best way is to put $1000 in the money jar and one open cow in the field and use the cash to look after the cow in all ways. The money does not grow any more - it disappears. Especially if you have payments to make and the cow is to make the payments.

Until then we will rent it out and keep a few beef for the family.

Bez+
 

ddg1263

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Just a couple of quick notes. Sometimes you do not get 660 dollars when you cull a cow. Sometimes you get 460. Also note that sometimes you don’t get 1.10 for your calves. Sometimes you get more like .75 to 80. So if you have a 500lbs calf it brings 400 dollars. Now revisit your numbers and look at what many ranchers are loosing in their operations.
 

Alberta farmer

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ddg: Without a doubt I never put in much of a "risk factor"! The picture I painted was a fairly rosy average outlook!
In my area this year we are experiencing a very tough drought. The price of hay/feed will probably more than double. My winter feed costs were based on $60/ton hay....prices on hay right now are in that $100 plus range and clearly on the way up....so my feed costs would have to change from $185 to $370! Which probably explains why we will see a major sell off of the western Canadian cow herd....no matter how low cow prices go! A long time ago you could take a hit like that every so often because you might make it back down the road. I don't see that happening. We've had 8 years of poor prices due to BSE and high costs. We've pretty well run out of gas.
The fact is the cattle business is no longer sustainable in western Canada. I suspect it is not much better in the northern US states? They face the same hard weather and calf prices that just won't pay the bills and provide some kind of living for the owners.
This does not mean there won't be cattle. There is always someone who will pay to work and do it for the lifestyle? I have just got to the point where I've had enough. I'm tired of losing money so some city slicker can have a cheap steak! Our basically useless government has done absolutely nothing for us...in fact it looks like they are doing just about everything possible to get rid of us...so I figure why fight it?
 

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