Get READY for a "BIG TRAIN WRECK"??

[somn]

Aplus do you ever think before you type? The cost to borrow the money is only 8% of the total feedlot expense. That is the actual out of pocket expense.

That is not what you said in your original post, you said the operating loan not the cost of the operating loan. Don't rag on me because I can not read your mind! Say what you mean!

Considering a operating loan is only 8% of a feedlots expense I really doubt it will be the operating loan that causes a failure in a feedlot.

What part of this sentence are you stuggling to understand aplus? I clearly stated that a operating loan is only 8% of a feedlots expense. I never stated that a operating loan is used to finance 8% of a feedlots expenses did I? I stated it is only 8% of a feedlots expense. Will it help if I type it bigger? A OPERATING LOAN IS ONLY 8% OF A FEEDLOTS EXPENSE. If you still are stuggling with the reading part see if someone could read it to you. real slow.

 

[somn]

Besides we are talking about the possibility of increasing your profits 8% not your total profit being 8%. I evaluate my business on how can I make more money not how happy I am with what I currently make! If I see a chance for an 8% increase in a specific area, I would do everything I could to make it happen!

I find this statement to be very interesting. You claim you evaluate your business on how you can make more money. If you see an 8% increase in a specific area you would do everything to make it happen but you ridicule somebody else who is smart enough to use somebody elses money to make a 65% increase. I can see where you are going to drag this post next I will bow out now as I hate politics.

 

[somn]

Maybe it is not possible, or maybe it is possible but just 10 years down the road. But you will never know because you are more than happy to give the bank that 8% that could be going into your pocket! I guess the upside is Bankers have to eat also!

This hits the same area as before how do you suggest a feedlot owner builds up the cash reserves for the $1112 per calf that it takes for inputs without using a banks money? Don't forget the average net profit per steer is $53.

 

[HerefordSire]

Now there is a fella a bump in the road away from Freddie and Fannie. I certainly would not brag about a lousy 8% return on my money.

I am not bragging about it; but I have a Van Kampen(sp?) IRA mutual fund that failed and it became a Van Kampen IRA money market fund that is off 16% over the life of the investment (and it goes back to 2002). They even lost money last quarter (how do you lose money in a money market fund?!). I would whole lot rather have been making 8% a year. Heck an 8% capital gain would look good right now.

Transfer your fund out of their control if you haven't already. Open a self-directed account with an online brokerage firm then transfer your holdings.

 

[TexasBred]

Now there is a fella a bump in the road away from Freddie and Fannie. I certainly would not brag about a lousy 8% return on my money.

I am not bragging about it; but I have a Van Kampen(sp?) IRA mutual fund that failed and it became a Van Kampen IRA money market fund that is off 16% over the life of the investment (and it goes back to 2002). They even lost money last quarter (how do you lose money in a money market fund?!). I would whole lot rather have been making 8% a year. Heck an 8% capital gain would look good right now.

Transfer your fund out of their control if you haven't already. Open a self-directed account with an online brokerage firm then transfer your holdings.

Amen Bro.....then you can't blame anyone but yourself. :nod:

 

[dcara]

if you have to borrow for day to day operating expenses such as feed, then it is ultra dangerous!

Here's another perspective.
I have only a small operation. Even though it is a pain to deal with them, the USDA has operating loans for 3-4%. Hence I was able to get CD's at 5-6% earlier this year and use USDA money for operating costs.

 

[ollie?]

Thread revisited. Anyone got any predictions from here forward?

 

[RD-Sam]

I heard beef prices were going to skyrocket in the stores this summer. From the looks of some prices that have been paid lately, it may be true. I'd say we are about to see another downturn though, looks like bad economy for the rest of the year. Bad economy and high prices should equate to less beef consumed, so probably a flooded market again and prices will drop.

 

[bigbull338]

the market wont be flooded for another year atlest.because the feedlots are at record lows.an the stocker guys havent been running meny cattle either.so itll be a year or more i think before the prices back off.example with the last CWT dairy buy out every1 thought the market would crash.well it never crashed.an weigh cows went from .40 to .65 cents a lb.an weigh bulls are bringing .60 to .90 a lb.

 

[ddg1263]

I personally think we will see a upward trend from here on the cattle market. There are two things that are really driving the market. We have a lower herd number that is dropping every month, and beef consumption is still decent by the consumer. First of all our cattle population is the same as it was in the late 50's and despersal sales are happening every week. Our census population has tripled in the USA not to mention the worlds population has increased significally. This alone has been a huge factor in sale barns paying a bit more for feeder calves. Our supply has truly DECREASED. And the consumption market is still decent. Consumers may not be going out to the restaurants, but they are buying beef products by and large in the grocery stores and cooking at home. They may cut back on a summer trip but they are still eating beef.

This past week the futures market took a hit. Commodities across the board got hit hard because of Greece. However, the one thing about our commodity is that people need what we sell to survive! You cannot eat Gold, silver, steel, timber, but beef.. it is what's for dinner remember?????? Our market is going to hold its own for a while....


One last thing... the gulf oil spill will drive up the price of sea food significally... The amount of food comming out of the ocean will be effected by this disaster... People will need beef as a substitute. Beef prices are going up boys.....

 

[RD-Sam]

The seafood disaster might be the only thing that helps the beef market, you have a point there. Stocks will probably tumble by fall, and beef prices will go with it. 2011 might be a better year though.

 

[uscangus]

The seafood disaster might be the only thing that helps the beef market, you have a point there. Stocks will probably tumble by fall, and beef prices will go with it. 2011 might be a better year though.

i would agree with you that the second year will be depressed. from agriculture side--if the current administration will not back or subsidize the ethanol, the feed price(corn) will be depress and make the beef prices escalate. the current views of the people do not want to subsize this program worth billions and billions because the cost of ethanol does not justify the return and products.

also, since the first half of the economy was based of the government stimulus by paying local states of their state expenses such as cost of running local government. now, there are at least 40 states are in the red and want more stimulus from our future generation to pay their costs. the new one is to pay their city and state pensions workers. heck, no one gave me a stimulus on my pensions or the average persons who did not work for the city.

with state and local government, first time buyers of homes of $8,000, clunker and caulker deal, auto industries, TARP money, Wall street(hedge funds mistake of hedging), and bankers, these stimulus have temporarily post-pone the problem of job creation of private sectors. the new jobs were just local, state, and federal government jobs. but without the second demand of second stimulus for local and state expenses, the first stimulus will be worthless. since we have lost 9 million jobs from private sectors from the mortgage, housing, and credit crunches, there are very, very little jobs have created in private sectors. hence, no one paying into tax base (by working), sale tax (buying goods), capital gains (from housing and equities from the stock markets-by selling-since houses and stocks have been depressed), and consumers are inactive in buying big good services. our economy was driven by 2/3 of consumers. since middle class has been eroded, we are in deep ****.

i am worried about the european countries (PIIGS--portugal, ireland, italy, greece, and spain). since we saw what happen to Greece in our stock market and we ended up paying into the 1 trillion dollars to save Greece. the next one to tumble is Spain which is two to three times as Greece. After that, the next one is Portugal. there is talk that Germany will leave the euro.

this problem will be worst than mortgages problems since we are inter-related with International Monetary Funds and soveriegn funds.

 

[ddg1263]

The seafood disaster might be the only thing that helps the beef market, you have a point there. Stocks will probably tumble by fall, and beef prices will go with it. 2011 might be a better year though.

i would agree with you that the second year will be depressed. from agriculture side--if the current administration will not back or subsidize the ethanol, the feed price(corn) will be depress and make the beef prices escalate. the current views of the people do not want to subsize this program worth billions and billions because the cost of ethanol does not justify the return and products.

also, since the first half of the economy was based of the government stimulus by paying local states of their state expenses such as cost of running local government. now, there are at least 40 states are in the red and want more stimulus from our future generation to pay their costs. the new one is to pay their city and state pensions workers. heck, no one gave me a stimulus on my pensions or the average persons who did not work for the city.

with state and local government, first time buyers of homes of $8,000, clunker and caulker deal, auto industries, TARP money, Wall street(hedge funds mistake of hedging), and bankers, these stimulus have temporarily post-pone the problem of job creation of private sectors. the new jobs were just local, state, and federal government jobs. but without the second demand of second stimulus for local and state expenses, the first stimulus will be worthless. since we have lost 9 million jobs from private sectors from the mortgage, housing, and credit crunches, there are very, very little jobs have created in private sectors. hence, no one paying into tax base (by working), sale tax (buying goods), capital gains (from housing and equities from the stock markets-by selling-since houses and stocks have been depressed), and consumers are inactive in buying big good services. our economy was driven by 2/3 of consumers. since middle class has been eroded, we are in deep be nice.

i am worried about the european countries (PIIGS--portugal, ireland, italy, greece, and spain). since we saw what happen to Greece in our stock market and we ended up paying into the 1 trillion dollars to save Greece. the next one to tumble is Spain which is two to three times as Greece. After that, the next one is Portugal. there is talk that Germany will leave the euro.

this problem will be worst than mortgages problems since we are inter-related with International Monetary Funds and soveriegn funds.

And you think that our currencies will remain strong with deflation? If you read what you just wrote, it is easy to see why beef will remain in demand through out this recession. People will eat even if they have to steal it, but I do not see governments around the world not allowing inflation to take hold to help work our way out of a deep financial debt. It is the only solution availble.

 

[traderaaron]

And you think that our currencies will remain strong with deflation? If you read what you just wrote, it is easy to see why beef will remain in demand through out this recession. People will eat even if they have to steal it, but I do not see governments around the world not allowing inflation to take hold to help work our way out of a deep financial debt. It is the only solution availble.

Except that it's a solution that has never really worked. As much as every nation tries to inflate it isn't working, it never worked in Japan for any real length of time, still doesn't. What if this is the inflation and this is all it can muster without a much more prolonged period of deflation to setup asset prices where they need to be to then jumpstart inflation?

And the Dollar in 2010 has been the strongest currency in the world other than Gold. Europe had been an increasing export market, recession there and currency factors may very well impact beef trade.

Betting on inflation or deflation either one in your cattle operation is likely to leave one eventually disappointed. And will beef really be one of the only food commodities to not come under deflationary pressures that are currently being felt in many other markets?

Increasing my cattle inventory turnover is my solution to dealing with either inflation or deflation or none of the above.

 

[Stocker Steve]

Increasing my cattle inventory turnover is my solution to dealing with either inflation or deflation or none of the above.

How many turns?

 

[SRBeef]

i would agree with you that the second year will be depressed. from agriculture side--if the current administration will not back or subsidize the ethanol, the feed price(corn) will be depress and make the beef prices escalate. the current views of the people do not want to subsize this program worth billions and billions because the cost of ethanol does not justify the return and products...

With all due respect sir, I have to speak up on this one.

We should all refrain from spouting off on things we no little real facts about. For example:

"...the cost of ethanol does not justify the return and products..."

This is an issue that one can generate a wide range of numbers to support whatever point of view one chooses to support.

In actual fact, ethanol can and in most cases does justify the return and products. Even if you look just at an energy balance, ethanol can make energy sense. It depends on your assumptions on how much fertilizer is used to produce the corn and many other factors.

Right now we have an oil spill running mega barrels of crude oil into the gulf of Mexico. What is the cost of that likely to be? And guess who is going to end up picking up that tab in one way or another??? I'll give you some engineering facts on that one: drilling through a MILE of water from a floating drill rig, then drilling another seven MILES of the underseas surface is a risky business. There are going to be these types of incidents repeatedly. The engineering is just too difficult to be perfect 100% of the time.

I heard on the radio today that folks want President Obama to "do something" now that oil has started to wash up on the shore. Well folks, the time to do something was when this type drilling was started. BP is just out of quick ideas. This is like the going to Mars of oil drilling. There are going to be this type "accidents" in this type drilling.

Next to this ethanol looks like a poster child for responsible fuel. If you look at the tax breaks for big oil and many other hidden subsidies for oil, the government encouraging ethanol startups is a drop in the bucket. However THAT drop is yielding very large returns. And ethanol does make sense from a financial AND engineering standpoint, if you consider facts rather than slant them.

I am very involved in corn production. I would rather see our dollars go here than buy more imported oil. Ethanol will never replace oil but it along with many other efforts will help.

And as someone involved in corn production I also get very tired of beef (and other meat) producers on the sidelines cheering for cheap corn as the only way to make a profit in beef.

Beef producers go to church to pray for cheap corn. Corn growers go to church and pray for higher prices so they don't need to sell out to a larger producer.... Is God on one side or the other?

You are barking up the wrong tree(s). Profit for the beef producer needs to come from higher prices for your end product, NOT cheap corn from your neighbor.

There are a lot of other misconceptions in your post but I will limit myself to your ethanol and corn price.

I understand you are a dentist? That is a fine profession. But it does not qualify you to make erroneous statements regarding ethanol, corn and call them facts.

Corn is NOT evil as some others try to portray it. Grain corn is one of the most valuable resources we in the US have. jmho.

Jim

 

[plumber_greg]

Good post Jim. Many times we want one segement of ag to go broke, just so it can be our turn to make a little money. People need to understand that if everyone makes money, then everyone makes money. Cheap grain is usually followed by cheap cattle. gs

 

[uscangus]

i would agree with you that the second year will be depressed. from agriculture side--if the current administration will not back or subsidize the ethanol, the feed price(corn) will be depress and make the beef prices escalate. the current views of the people do not want to subsize this program worth billions and billions because the cost of ethanol does not justify the return and products...

With all due respect sir, I have to speak up on this one.

We should all refrain from spouting off on things we no little real facts about. For example:

"...the cost of ethanol does not justify the return and products..."

This is an issue that one can generate a wide range of numbers to support whatever point of view one chooses to support.

In actual fact, ethanol can and in most cases does justify the return and products. Even if you look just at an energy balance, ethanol can make energy sense. It depends on your assumptions on how much fertilizer is used to produce the corn and many other factors.

Right now we have an oil spill running mega barrels of crude oil into the gulf of Mexico. What is the cost of that likely to be? And guess who is going to end up picking up that tab in one way or another??? I'll give you some engineering facts on that one: drilling through a MILE of water from a floating drill rig, then drilling another seven MILES of the underseas surface is a risky business. There are going to be these types of incidents repeatedly. The engineering is just too difficult to be perfect 100% of the time.

I heard on the radio today that folks want President Obama to "do something" now that oil has started to wash up on the shore. Well folks, the time to do something was when this type drilling was started. BP is just out of quick ideas. This is like the going to Mars of oil drilling. There are going to be this type "accidents" in this type drilling.

Next to this ethanol looks like a poster child for responsible fuel. If you look at the tax breaks for big oil and many other hidden subsidies for oil, the government encouraging ethanol startups is a drop in the bucket. However THAT drop is yielding very large returns. And ethanol does make sense from a financial AND engineering standpoint, if you consider facts rather than slant them.

I am very involved in corn production. I would rather see our dollars go here than buy more imported oil. Ethanol will never replace oil but it along with many other efforts will help.

And as someone involved in corn production I also get very tired of beef (and other meat) producers on the sidelines cheering for cheap corn as the only way to make a profit in beef.

Beef producers go to church to pray for cheap corn. Corn growers go to church and pray for higher prices so they don't need to sell out to a larger producer.... Is God on one side or the other?

You are barking up the wrong tree(s). Profit for the beef producer needs to come from higher prices for your end product, NOT cheap corn from your neighbor.

There are a lot of other misconceptions in your post but I will limit myself to your ethanol and corn price.

I understand you are a dentist? That is a fine profession. But it does not qualify you to make erroneous statements regarding ethanol, corn and call them facts.

Corn is NOT evil as some others try to portray it. Grain corn is one of the most valuable resources we in the US have. jmho.

Jim

hey Jim, i am just pointing out the government problems, options, and concerns, and how will affect our current or future generation. i agree with you, and i am not against ethanol/or corn production. my neighbor plants 300 acreages of corn each year. i know the how hard he works. i am not against subsidy on ethanol. heck, brazil started to subsidy their agriculture on early 70's for ethanol and since then- they are independent from middle east. agriculture is well subsidy in brazil to be independent from other countries.

with the constant bleeding of oil leakages and havoc on our enviroment, this will make our government pursue other avenues and pursue to subsidy ethanol production in the midwest and in the plain.

i am just concern how we can't get along with our neighbor, venezuela or (chavez) and get oil from them. during Clinton, we used to get 30% of our oil from them and from Mexico, Canada, and very little from lastly Middle East. since younger Bush came along, our supply from venezuela disappear from them.

in regard to deflation or inflation, i can't tell you how consumer will react if the economy goes back to slight correction/or depression. if our consumer drops, they usually buy chicken, pork, beef,or cook at home. in return, they will stay home and not go out at high end restaurant(less demands for high quality cut of beef or beef demands. i am shocked that the teacher pensions are asking 165 billions of dollars for their pensions. wait till, the city, state, or federal government workers demand the same benefits as the teachers. the system is broke and we can't constantly print money.

i have been in this country for almost 40 plus year and i did not know that federal reserve is not own by this country, until last year. since banks are hoarding money from TARP stimulus and not lending to small business or lending mortgages besides first time buyer. how do we expect to create jobs from the private sector. small businesses and private sector create jobs not government jobs. with very little job growth and paying into tax base, how do we expect to support this balloon government expense. in seattletimes newspaper, they talk about how bad the system(social security) and how they will limit the benefits and extend the age.

it is a different time. i have never seen this dilemma since the whole world feels broke. I experience deflation from the 70's, saving and loans in 80's, 90's internet bubble, and 2000's credit crunch, mortgage, and banks. i look around my neighbors and friends-they don't feel great or apathy to our current government.

 

[SRBeef]

USC, There comes a time in life when you realize that you do what you can and the best you can at what you can control.

At almost every time in history it has looked, at that time, like the world was going to he!! in a hand basket. Yes time has accelerated but if we each do what we can, for example voting responsibly, and raising our kids to do a better job at this than we have, life goes on.

I don't mean to pick on you. Ethanol is sort of a hot button for me.

Just control what you can and don't let the rest get you down or nothing gets done.

All the best.

Jim

 

[Brute 23]

Ethanol will have zero effect on offshore drilling. It takes both natural gas and oil to produce ethanol. :lol2: