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Get READY for a "BIG TRAIN WRECK"??
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<blockquote data-quote="Beef11" data-source="post: 226727" data-attributes="member: 2705"><p>I think that there is a point at which MOST people say "alright I've lost enough money on these beasts" And yes when we reach that level of unprofitability people will sell their herds. It really comes down to supply and demand. If producers are losing money the national cowherd will shrink until supplies become tight, bolstering the price. Cattle are a longer price swing due to the time it takes to get a new animal into her productive life. The big question is how much producers can take before they start to get rid of cows. High energy costs will play a key role by adding stress to the producers budget and of course drought will be a geographic player as always. Watch for corn prices to feel the heat from high energy as well. If corn stays low it well help stop the bleeding when cattle prices are low. If corn is on the high end expect it to substantially lower calf prices. Economic health of the country will play a role on what americans eat. If everyone is prospering expect people to eat out and have barbeques if unemployment and recesssion abound people will not coin up for the better meat. Warm winters through the midwest will effect the rate of gain on cattle and how fast beef can be produced. The canadian border will have an effect as well. Don't expect it to stay closed for ever and its opening could swing the pendelum from under supply to oversupply, its only a couple of percentage points. Export markets, consumer confidence, cool, and mandatory ID will also play a role. As for indicators watch percentage of heifers in the feedlot, Corn Prices, Fuel, interest rates and canadian inventory. If the commodities market is bullish it can also drive up the price through artificial hype on the flipside watch for the bear the psychological devaluing of animals is typically the fastest way to decrease its value but thankfully it usually wrinkles out in a matter months there. </p><p></p><p>Pray</p><p>Play it smart</p><p>Work hard</p><p>Pray</p></blockquote><p></p>
[QUOTE="Beef11, post: 226727, member: 2705"] I think that there is a point at which MOST people say "alright I've lost enough money on these beasts" And yes when we reach that level of unprofitability people will sell their herds. It really comes down to supply and demand. If producers are losing money the national cowherd will shrink until supplies become tight, bolstering the price. Cattle are a longer price swing due to the time it takes to get a new animal into her productive life. The big question is how much producers can take before they start to get rid of cows. High energy costs will play a key role by adding stress to the producers budget and of course drought will be a geographic player as always. Watch for corn prices to feel the heat from high energy as well. If corn stays low it well help stop the bleeding when cattle prices are low. If corn is on the high end expect it to substantially lower calf prices. Economic health of the country will play a role on what americans eat. If everyone is prospering expect people to eat out and have barbeques if unemployment and recesssion abound people will not coin up for the better meat. Warm winters through the midwest will effect the rate of gain on cattle and how fast beef can be produced. The canadian border will have an effect as well. Don't expect it to stay closed for ever and its opening could swing the pendelum from under supply to oversupply, its only a couple of percentage points. Export markets, consumer confidence, cool, and mandatory ID will also play a role. As for indicators watch percentage of heifers in the feedlot, Corn Prices, Fuel, interest rates and canadian inventory. If the commodities market is bullish it can also drive up the price through artificial hype on the flipside watch for the bear the psychological devaluing of animals is typically the fastest way to decrease its value but thankfully it usually wrinkles out in a matter months there. Pray Play it smart Work hard Pray [/QUOTE]
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