Future cattle prices.

[Sir Loin]

Future cattle prices.
All my reading and research shows this upward swing will continue for at least 2 more years as there is a shortage of cattle.

In short: supply is down and demand is up, which means prices can only go up.

The only thing that can disrupt this trend is the Nov. election.
But even then, if the election goes the wrong way, prices should hold for at least one year, and most likely two years.
Retroactive legislation is the only thing that could cut it back to 1 year after the election.

Remember you heard it here first.

SL

 

[tom4018]

I wonder how long it will take for the higher prices to be reflect at the stores and restaurants? If the economy tanks again due to higher prices of gas and others things, what will that do?
IF I knew these answers I would not own cattle at all, would I?

 

[SRBeef]

...supply is down and demand is up, which means prices can only go up...

When anyone says "prices can only go up" that often signals they are in fact going to go down.

I respectfully disagree that "the election" will affect any of the forces which have caused recent cattle prices to rise.

Jim

 

[shaz]

I wonder how long it will take for the higher prices to be reflect at the stores and restaurants? If the economy tanks again due to higher prices of gas and others things, what will that do?
IF I knew these answers I would not own cattle at all, would I?

The average price per pound of beef is $5.00.
Does that sound right?

 

[Sir Loin]

Tom,
Did you see this:

Kentucky, U.S. cattle numbers decrease

http://southeastfarmpress.com/livestock ... s-decrease


This should answer some of your questions.

Q. How many states had a decrease in cattle in 2011? Can you name them?
SL

 

[tom4018]

Tom,
Did you see this:

Kentucky, U.S. cattle numbers decrease

http://southeastfarmpress.com/livestock ... s-decrease


This should answer some of your questions.

Q. How many states had a decrease in cattle in 2011? Can you name them?
SL

No agruement here that Ky is down in numbers, as I see that in my local area. CREP took a lot of cattle out of here. I would say that most states lost cattle, I don't know for sure.

 

[Sir Loin]

SR,
Good post.

Re:

When anyone says "prices can only go up" that often signals they are in fact going to go down.

That is true for those who have a special interest in the price moving or to promote a special interest agenda, such as future traders and environmentalists.
Of which I am not.

I respectfully disagree that "the election" will affect any of the forces which have caused recent cattle prices to rise.

Q. Who got our economy in this mess that is driving prices up?
Was it not the government? Is not the government responsible for high fuel and corn prices?
If not, then what/who do you attribute these high cattle prices to?
SL

 

[inbredredneck]

SL

I see nothing wrong with producing more from less and being paid more for the product. Why are so many overwhelmed with the shrinking cow herd? Why do they want to produce less from more and then get paid less for the product. It is just stupid in my opinion to think that way.

 

[SRBeef]

SR,
Good post.

Re:

When anyone says "prices can only go up" that often signals they are in fact going to go down.

That is true for those who have a special interest in the price moving or to promote a special interest agenda, such as future traders and environmentalists.
Of which I am not.

I respectfully disagree that "the election" will affect any of the forces which have caused recent cattle prices to rise.

Q. Who got our economy in this mess that is driving prices up?
Was it not the government? Is not the government responsible for high fuel and corn prices?
If not, then what/who do you attribute these high cattle prices to?
SL

I agree with you and also believe the current economic situation is largely the result of government action and inaction over the past decade or so. This is also true in Europe.

I do not however believe the outcome of the 2012 presidential election is going to have an effect on current cattle prices one way or the other.

Jim

 

[Kathie in Thorp]

I wonder how long it will take for the higher prices to be reflect at the stores and restaurants? If the economy tanks again due to higher prices of gas and others things, what will that do?
IF I knew these answers I would not own cattle at all, would I?

The average price per pound of beef is $5.00.
Does that sound right?

In the grocery store cooler? That's probably close, if you average ground beef on up -- maybe higher. ??

 

[Sir Loin]

Jim,

As has been shown historically, it is the 3-Fs ( fuel, feed and fertilizer ) cost that has caused the decline in cattle numbers and a rise in cattle market price and government policies control all three.

Prior to the forced use of Ethanol the government only control the flow of oil (fuel ) and by controlling the price of oil (fuel ) they also controlled the cost of fertilizer as it comes from oil.

The forced use of Ethanol by the government, the government has now taken control of cattle feed.
In addition taxes, another cost factor controlled by the government, continue to rise.

So you see the government now has full control of all 3-Fs ( fuel, feed and fertilizer ) costs and taxes.

FACT: The government now controls the cost of the three plus major cost factors in the cattle industry.
And he who controls cost also controls both profit (P) and sale price. (SP)
( SP aka market price.)
Remember: C + P = SP
FACT: You are not running your cattle operation, THE GOVERNMENT IS as they have full control of your major costs. And the same can be said for many other industries. Hence the continued pizz poor economy and continued high unemployment rate which will, if left to fester, cause a decline in demand in beef while at the same time reduce cattle inventor (supply ) by forcing supplier (cattleman ) to sell off more cattle to meet costs ( the 3-Fs ) or to go out of business All together.

Re:

I do not however believe the outcome of the 2012 presidential election is going to have an effect on current cattle prices one way or the other.

I’m at a lost for words on that one.
Think about it.
SL
PS I’m trying to stay away from political discussions as it may/will probably cause my to go on another forced hiatus ( permanently ).

 

[SRBeef]

I will end my participation in this discussion here by saying there are major holes in several areas of your arguments above including ethanol. As a long time engineer in the ag machinery business, especially corn and and soybean growing business, I have had a lot of experience with ethanol and its effects on rural America over the past 30 years or so.

Even aside from politics, I am tired of folks blaming the government for all of our ills yet claiming credit for themselves when they make a bit of money... I do not believe your remarks above hold water nor are offered in good faith. You appear to be looking for an argument and to make a political statement under the guise of talking about cattle. Over and out on this one.

Jim

 

[Sir Loin]

Jim,
Thanks for your participation but you really need to take a course to learn how to

Have a nice night and thanks for divulging your special interest!
Few on here are that honest.
My special interest is the cattle industry and the economical well being of all Americans.
SL

 

[shaz]

I wonder how long it will take for the higher prices to be reflect at the stores and restaurants? If the economy tanks again due to higher prices of gas and others things, what will that do?
IF I knew these answers I would not own cattle at all, would I?

The average price per pound of beef is $5.00.
Does that sound right?

In the grocery store cooler? That's probably close, if you average ground beef on up -- maybe higher. ??

Yeah, the grocery store cooler.
I just wanted put one number on the price of beef. Seems to work for chicken right?

 

[angus9259]

The only thing that can disrupt this trend is the Nov. election.SL

Or BSE.

There are a few more players in this market on both the supply and demand side than the mighty US or anything the Nov elections can bring about. Valuation of the dollar, Greece, increased profitability attracting international competition, availability of other protein sources - even those considered delicacies, Iranian nuclear crisis (you think our government controls the cost of fuel? Let me introduce you to India and China - our largest competitors for fuel) - all will have a larger effect on the demand for US beef than any election in November.

And, as you yourself preach, these higher prices are not necessarily good news to the cattle person - only profit is. Much of these higher prices (supply) are being driven by external factors driving up costs (drought/ethanol/fuel/land value) forcing producers out. Making less money while selling their product at a record price is actually a prescription for collapse.

There's a whole world out there SL that doesn't capitulate to the whims of the USofA any more.

Unless, of course, the November election changes all that . . . .

 

[Sir Loin]

Angus,

I fully understand what you are saying and I don‘t disagree.
You are talking to someone who runs a little personal rescue mission for horses that costs me personally about $2,000 per year which I gladly pay just for that feeling you are talking about.
But it was never meant to be a business and turn a profit. If it was, I would have been out of business the first year I started it because it was run on “feeling” not “profit” motivated.

When I started my rescue mission it was a personal decision not a business decision.
Had it been a business decision I would have never stated it as I fully knew it could only be a money loser.

Now that is not to say that your personal feeling should be totally void from all your business decisions but they should never over ride your motivation for profit.

Example:
You should not go out and buy a $30,000 + truck because it makes you feel good. The purchase should be made based on need and will the business be able to afford it.

There are far to many business decisions being made today based on feelings with no thought of profit, from the government all the way down.

This is also why Co. & Corps. Are so misunderstood. Sheeple don’t understand that they are nothing more then a piece of paper, without feelings, that clearly defines their goal as nothing except to make a profit.
SL

 

[1wlimo]

I agree with you SL that too many make feel good instead of business decisions, but to say that a Corp does not work that way as well? Look at the way the banks went down, Enron etc.

Have the cattle numbers not dropped due to the low prices paid by the Corps who control the market?

Have the droughts and floods not reduced the cattle numbers, and BSE, and the age of farmers,?

I would agree that prices are likely to stay up for the next couple of years, given conditions as they are.

Will farmers who sold cattle due to drought buy back in?

Will corn be more profitable than cows?

Will there be as many young farmers who want to farm cattle?

What will the press do? The press in the UK have done a lot of damage in the past

I think any Government would have trouble changing many things, they do not have the power in this world.