Inflation

[HDRider]

I know conventional wisdom says beef prices are going to drop, following the historical cattle cycle. The only question is when.

I wonder if it might be further in the future than some believe because we are going to see rising inflation at some point. The question on inflation also is when.

 

[Son of Butch]

Choice boxed beef prices were down 4.25 for the week, last week.
Market steers I sold yesterday down $3.00 for the same quality I sold 3 weeks ago.

But feeders and baby calves were both up. I blame the full moon (Lunatics)

 

[bigbull338]

everything im hearing is they dont know when or if cattle prices will drop.

 

[Bigfoot]

THIS NEWS JUST IN:
The cost of living is going up, and the chance of living is going down.

 

[skyhightree1]

I know bottle calf prices have sky rocketed

 

[M-5]

IMO prices will never go back to where they were. They will retract some but barring a significant world event they are here to stay. Unfortunately so are the other high prices on all other goods and services. its all relative to value of the all might dollar. You will see everything else needed to produce that # of beef rise exponentially and it will devalue the prices we are getting now.

 

[Nesikep]

I'm with M5.. I think prices may drop at some point (I don't have the crystal ball to say when), but I don't think 5wt calves are going to dip under $2 unless there's something absolutely drastic... Perhaps a major change in import policy would be one factor that could do it.

 

[ddd75]

with all the foreign demand and all the growth in population. all the bird and pig flus.. yea i don't see beef prices dropping much.

 

[greybeard]

IMO prices will never go back to where they were. They will retract some but barring a significant world event they are here to stay. Unfortunately so are the other high prices on all other goods and services. its all relative to value of the all might dollar. You will see everything else needed to produce that # of beef rise exponentially and it will devalue the prices we are getting now.

Ya know, I want to agree with that very much, but I keep remembering, that a few years ago, I once stated we would never again see oil at under $100--$120/bbl........

 

[ddd75]

IMO prices will never go back to where they were. They will retract some but barring a significant world event they are here to stay. Unfortunately so are the other high prices on all other goods and services. its all relative to value of the all might dollar. You will see everything else needed to produce that # of beef rise exponentially and it will devalue the prices we are getting now.

Ya know, I want to agree with that very much, but I keep remembering, that a few years ago, I once stated we would never again see oil at under $100--$120/bbl........

but yet the fuel prices have remained near the same.

 

[SJB]

The difference with oil, is you had a major new tech breakthrough with fracking. And gasoline is certainly cheaper, no where near the same as when oil was $100.

 

[Nesikep]

Barrel oil prices have come down 50%, and we're happy that our fuel prices came down 25%.

I think the high beef prices is the indicator that inflation is here.. the pork and poultry disease problems have been a perfect storm for the consumer

 

[Stocker Steve]

I know conventional wisdom says beef prices are going to drop, following the historical cattle cycle. The only question is when.

There is no ten year cattle cycle anymore. That much I know.
The talking heads say beef has more competition this year from the increased production of white meats.
Inflation is very category specific. Look at health care. So the trick is consuming more oil and less pills!

 

[sim.-ang.king]

IMO prices will never go back to where they were. They will retract some but barring a significant world event they are here to stay. Unfortunately so are the other high prices on all other goods and services. its all relative to value of the all might dollar. You will see everything else needed to produce that # of beef rise exponentially and it will devalue the prices we are getting now.

Ya know, I want to agree with that very much, but I keep remembering, that a few years ago, I once stated we would never again see oil at under $100--$120/bbl........

Or corn would never go below $6.

Never say Never.

 

[james coffelt]

I agree with most of these comments.

The price of land is disconnected from production value.

The average farmer/rancher is 60 years old+.

Inputs have risen more than cattle prices, a low input operation has an advantage, IMHO.

It will be interesting.

My best guess is that prices will stay high.

 

[bball]

I know conventional wisdom says beef prices are going to drop, following the historical cattle cycle. The only question is when.

There is no ten year cattle cycle anymore. That much I know.
The talking heads say beef has more competition this year from the increased production of white meats.
Inflation is very category specific. Look at health care. So the trick is consuming more oil and less pills!

Very valid point.
When you look at traditional input costs: diesel is down, grain is down, hay, fertilizer and lime havent moved much. The real kicker has been real estate, and that varies geographically. Property taxes move case by case, geographically, and insurance hasnt moved much either.

 

[1982vett]

Just catching up......most input cost ran rampant and outpaced income for a long long time.

 

[Stocker Steve]

most input cost ran rampant and outpaced income for a long long time.

But why ??? Except for patented seed - - inputs are commodities.

Are the input suppliers better at marketing than ranchers?
Is government ethanol policy the recent driver?
Is there just not enough supply?
Should we blame the Chinese for increasing demand?

 

[1982vett]

most input cost ran rampant and outpaced income for a long long time.

But why ??? Except for patented seed - - inputs are commodities.

Are the input suppliers better at marketing than ranchers?
Is government ethanol policy the recent driver?
Is there just not enough supply?
Should we blame the Chinese for increasing demand?

If you have to ask.....entire cost of living...

 

[bball]

most input cost ran rampant and outpaced income for a long long time.

But why ??? Except for patented seed - - inputs are commodities.

Are the input suppliers better at marketing than ranchers?
Is government ethanol policy the recent driver?
Is there just not enough supply?
Should we blame the Chinese for increasing demand?

I'm speculating it's supply vs. demand. Perhaps some of the more seasoned folks on here can correct me, but after the droughts a few years back and numbers waned drasitically, cattle supply was at a near record low nationwide. Couple that with tremendous demand overseasfor beef and disease issues with beefs chief competitors (pork, chicken) created perfect storm for beef to catch up. Another force is beef has many other competitors in the 'protein market'. This gives consumers choices and thereby diminishes beef industry leverage to raise prices proportionately with COL. While if you look at fuel for example, everyone needs gas/diesel and there aren't many viable competitors to it yet. So when oil goes up, for any reason, folks have to pay, not really a choice. Just one example. Ultimately, beef has caught up because there is a tremendous demand and a limited supply. Supply is correcting, and may correct faster if the Gov't does allow foreign beef imports. The Eastern orient countries prefer American beef currently. With the avg age of the beef farmer/rancher increasing, and a lack of youth getting into beef, perhaps the supply will.stay down. My fear is the Gov't will get involved as it has done with corn, beans, wheat etc..and 'fix' our problem, like it has many other issues.