How long do you see these prices holding?

[Kscattle]

I'm starting to wonder how long these record prices will prevail. I know cattle numbers are low and corn prices are lower than last year but how long will it be this good? All the driving factors are in the cow/calf operators favor for years to come, I think. BUT beef may get bullish when things get too high that people start eating more chicken/pork/etc. there will always be demand for hamburger which is part of the reason that killer cows are at these prices, but high end steaks and specialty cuts of beef may get too high for people's tolerances these days in this economy. Our local sale barn owner thinks the prices are here to stay at least until after spring on feeders and breds will remain at current prices or go up more.
I wonder if calves will mimic gas prices, where gas goes up,up,up until people quit buying, then come down enough to keep people interested in buying.
What's your guys' thoughts? Maybe this has been talked about and I just didn't see it so I hope I'm not double posting

 

[denvermartinfarms]

I don't see alot higher market than we have now, but I don't see a big drop coming either. 5 years ago I was selling 5wt steers for 80 to 90cwt. I know inputs have gone up, but cattle can come down quite alot from these record and we can still make money. That was a pretty simple answer, but it's the way I see things.

 

[Tim/South]

I believe we have pretty much peaked in price. As you mentioned the demand side of the equation has competition from other meats.
Packers are claiming to be operating in the red right now. I do not know if we can reach the $1.40 for fed cattle and not price beef out of the normal family budget.
I am just happy that those of us on the production end of the cattle business are finally making good money. Cow/Calf operations, stockers and feed lots are normally expected to survive on the table scraps while the packers and retailers make a good profit.

 

[Aaron]

Prices are going to keep going up. Lots of old guys continue to leave in droves and there isn't enough young people filling the gap.

People say imports with go up, but the whole world is getting more competitive for beef and even on a global scale, you not seeing young people (in the developed countries) going into ag in a big way.

 

[Stocker Steve]

I have no idea on demand and imports and packing plant closures. I just hope folks can still afford a dollar meal after paying for Obamacare.

On the production side I still see a significant heifer discount. My math is:
Local corn was $7.01 eight months ago. This week it is $3.80. Market guys are predicting that (unless there is another drought) corn will remain below the cost of production for the next several years. Usually it takes two years for farmers to adjust to a major change. So if we seed down grain fields and retain heifers in 2015 - - we will see a bump up in beef production by 2019. :shock:

Locally I see less cows each year, and I am told we have started shipping some south west to repopulate. How many producers do you know that are interested in a 5 to 7 year long beef expansion plan? I only know one.

 

[Kscattle]

Sounds like we're all in agreement and I see what Aaron is saying about the younger generation moving on. The baby boomers kids find it easier to have a steady income by working in town, and I see their point but who's gonna farm in 30 years? I know of several guys my age that could farm the family farm but instead live/work in town. I don't understand it. I had to work for everything I've got and they don't even want ground/machinery if it was given to them.

 

[Stocker Steve]

The baby boomers kids find it easier to have a steady income by working in town, and I see their point but who's gonna farm in 30 years?

Figures lie in that we don't need to replace most of the retiring dirt farmers nor replace most of the retiring dairy farmers - - because their operation is usually absorbed into a bigger one that leverages a lot of equity... I had a neighbor in his 70s come over last month and ask if I wanted to buy his plow ground. It is across the road and mostly well drained, but I have some of the same business issues he has. It does not pencil out with $4 conventional corn grain.

Beef is a little different in that we have a lot of small part time cow calf herds in some parts of the country. Some grazing gurus claim that using animals - not machinery - to harvest, along with some direct marketing of grass fed beef, reduces the need to have large scale to be profitable. Another beef business alternative is to do a Bud Williams sell buy system including a small back grounding yard. This works with the small cow calf herds to put together loads of feeders.

 

[bigbull338]

i really think prices will be high for the next 20yrs or longer.because of a few things.the droughts seem tobe pretty bad an wide spread when they hit.thus sending alot of good cows to the packers.the cattlemens age keeps going up every year.an very few young cattlemen coming on to off set the retiring cattlemen.

 

[sim.-ang.king]

These prices will hold out till I wean mine for sale, then they will have to cut back 50 cents because of such a over flow of cattle on the market.

 

[jasonleonard]

I agree with Aaron 100% ! In the few counties around me, cow-calf is becoming a thing of the past.
Our local feeder sales have become spring and fall dispersal sales....and the kill buyers are there to grab those cows out of the grasp of young farmers that aren't blessed with working capital.

As far as where feeder prices go from here, I think feeders will follow a corn pattern.
Cheap corn=expensive feeders. Expensive corn=cheaper feeders.

 

[Tim/South]

Box prices will dictate the demand. It is a given the supply is short. The demand is a variable. Beef has to be an affordable option in the weekly grocery bill. With the economy like it is and the dollar not going as far, pork and chicken do provide serious competition. We can not price beef out of the working class menu.
Prices should be steady for a long time. It is hard to picture retail prices much higher for the consumer. Weekly slaughter numbers are good right now. When box beef prices drop, so will the weekly slaughter numbers.

 

[Ouachita]

My wife sold 19 head today. I am out of town in the pristine areas of the Oklahoma and Texas panhandles. So, she took care of business while I was gone. They did very well, considering I have nothing special. We were pleasantly surprised. She was proud the barn announced our name and said ours did better than those run through before and after. I told her not to spend it all before I get home. I'm in a state of suspended animation until I see how that works out :lol2:

 

[Tim/South]

In Texas and Kanans yesterday some fed cattle sold for $1.31, down a dollar from last week and down a good bit from the $1.35 some fed cattle sold for two weeks ago. The reason is box prices slowed, meat was not moving off the store shelf. $1.31 is still a good price and feed lots need cash flow to make ends meat.
The feedlots, packers and retailers have to find a happy medium where each is making satisfactory money. If those three ever get on the same page then there is money to be made for the cow/calf operator and the stocker.
In my backwoods country opinion cattle prices are not high right now. They are where they should have been all along. There should be good money made by the people who grow and supply food to the public.

 

[1982vett]

"These prices" need to hold and keep going up in order to keep stride with all other expenses.....utilities, autos, clothing, popcorn and sodas at the movies.....

 

[denvermartinfarms]

"These prices" need to hold and keep going up in order to keep stride with all other expenses.....utilities, autos, clothing, popcorn and sodas at the movies.....

My cows love popcorn, but do you really buy yours cars, clothing, and take them to movies??? :lol2:

 

[cross_7]

The cow herd can recover quicker than people think, but the biggest factor is going to be the weather
There are some places that have recovered from the drought, but some are still suffering.
If we see a repeat of the drought like in 2011-2012 it could shake things up worse than before.

 

[Tim/South]

"These prices" need to hold and keep going up in order to keep stride with all other expenses.....utilities, autos, clothing, popcorn and sodas at the movies.....

The buying public is saying just the opposite. We do not need for beef to become an elitist commodity.
I do agree that we need to be paid well and fair for what we bring to the table. Sadly the retailers and packers are going to make money or do under. We as farmers always find a way to hang on another year. We are resilient and optimistic.
We also depend on other businesses to process and sale our product. And we usually come out on the short end of the stick.
The market is fickle for the consumer. Price does not need to be what pushes the consumer in another direction.

 

[sim.-ang.king]

"These prices" need to hold and keep going up in order to keep stride with all other expenses.....utilities, autos, clothing, popcorn and sodas at the movies.....

The buying public is saying just the opposite. We do not need for beef to become an elitist commodity.
I do agree that we need to be paid well and fair for what we bring to the table. Sadly the retailers and packers are going to make money or do under. We as farmers always find a way to hang on another year. We are resilient and optimistic.
We also depend on other businesses to process and sale our product. And we usually come out on the short end of the stick.
The market is fickle for the consumer. Price does not need to be what pushes the consumer in another direction.

Or really stupid, and blindly optimistic. :lol2:

 

[herofan]

I'm sure prices will remain high until I sell my first bunch, and then they will significantly drop off only to rise again the day after I sell. I'll alert everybody to the day I plan to sell next year so you can plan accordingly. :lol:

 

[Anonymous]

I'm sure prices will remain high until I sell my first bunch, and then they will significantly drop off only to rise again the day after I sell. I'll alert everybody to the day I plan to sell next year so you can plan accordingly. :lol:

As long as you didn't sell last week or plan on selling this week.