Interesting read on cattle prices. A bit biased I think.
- Thread starter tater74
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I think that this article was dead-on, @tater74 . What do you think it is biased towards?
mwj
Well-known member
Top chart shows packers making $450 per head but read on down the article and they say the packer has a $240 loss. Sounds like someone does not have a clue.
mwj
Well-known member
Shows packer paid 1855 sold to grocer at 2538 there cost was 233 and profit of 450.
kenny thomas
Well-known member
Beef just didn't get high to buy recently. Only the cattle they are buying now is high. I remember just a few years ago I wondered how it could be the price at the retailer and the producer get such a small percentage. There is still profit at the processor side just not what they were making. A lot of cattle farmers are no more because the price they received put them out.
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Beef is not high.
The chart seems fairly accurate to me. I wonder how hard it would be to make a profit as a cow/calf operator if you took land cost out of the equation? How easy would it be to make a profit if you figured in unrealized gains?
mwj
Well-known member
Beef is not a four stop operation. Follow that calf to the plate and count how many people take a cut. Buyers,sale yards, truckers at all stages it can be complex.
mwj
Well-known member
You set the price to buy and sell yours also the same as the packers. The trouble is when the hide comes off the clock starts ticking. As always said ''you sell it or smell it''. They cant turn them back to grass and wait for the price to go up!
We always cuss the packers but we need them to survive. If there is all that profit in killing cattle we should be over run with small to medium beef packers. We hear the plans they sell some shares and then are not built.
Little Joe
Well-known member
You don't see expansion of small to medium packing plants due to all the government red tape placed on the small farm to fork operation as well as the small to medium packing house. Check out what Joel Salatin is pushing, a Food Emancipation Proclamation, he has been in talks with RFK Jr about it. It basically says food should be able to be sold without all the government regulations. If my neighbor wants to buy steaks and burger from me the government should have no business in the middle of that transaction other than me paying taxes, my neighbor is a responsible adult and can look at my operation any time they please and know what they are getting, they don't have the same privilidge when they buy at Wal-Mart. My custom exempt butcher probably knows more about problems in a carcass than most inspectors, yet he charges $0.70/lb hcw to process and the USDA facility is $1.10/lb. I could sell a lot more beef than what I currently do if I was selling by the piece retail but my price currently would have to reflect the extra$$ for USDA processing. I think if the USDA regulations on selling that beef went away, you'd se local processors expanding and new ones being built as well as more cattle being sold as direct beef rather than passing through so many hands that depletes the profit. Arkansas passed a state inspection law so we could sel beef direct without USDA, I think there's only one state inspected facility in the state due to the red tape so it did no good. Arkansas does allow the sell of raw milk and recently passed the tamale act that allows people to sell cooked tamales out of their house, hopefully direct sells of beef without red tape is coming.
Travlr
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Everything's high...
I don't know how people today can buy a house, car, and raise kids, unless they are making far more in wages than I every did. Maybe wages have gone up significantly? I'm out of the job market so I don't know. I know what my payments were on a 100K house on a thirty year note, and a 25K vehicle on a four year note, and insuring them, and I can't imagine buying a 400K house and a 100K pickup... but there are plenty of people doing it and buying insurance and $5 fuel.
There is a lot of money floating around. Don't think we in the beef industry need to do any one a favor on prices. I assure you, they will not do it for us. They will just take their beef savings and go buy junk.
Travlr
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I'm starting to doubt that the numbers of cattle are down. I think there are a lot of people seeing these prices as a good way to cull unthrifty/unhealthy/aggressive cows, but I suspect they are bringing younger stock on line to replace them. And I can see people increasing their property holdings and their herds.
Hopefully they aren't doing it on credit.
mwj
Well-known member
Joel is selling a story. If the customer wants your product they will find you just like you found Joels story.
The beef customer wants to buy when they go shopping and it is on there menu. That is what the system is set up to serve.
Niche programs can be very good but they are called niche for a good reason. Joel has been around for a long time telling the same story but he has not had much sucess beyond a niche market.
I have thought the same thing. When I worked in the banking industry in the mid-80s I repoed over 200 cars/trucks and went and represented the bank on at least a dozen foreclosure and this was a small bank. I would hate to be working in collections now in a financial institution. I feel for people and still feel for some of the people I had to take their vehicle as even at that time some had really bad luck. You miss a couple payments now on an average home and/or vehicle and you can be behind 4-5k fast. Usually after the second payment was behind, I was checking why or looking for the collateral.
kenny thomas
Well-known member
I respectfully disagree.
I do not set my price. I can do lots of things to improve the price but if the packers want to give 2.50 for the finished product I cant just say thats not enough, I want $3. Also if im selling 800 lb steers to the feedlot and they are offering 3.75 i can't say your going to pay me $4.
The 4 major packers control the whole beef chain. When one goes up they all go up.
Small or even medium packers can't compete with the big 4 because they can't supply the Wal Marts, Aldi, Kroger, etc. The big 4 can undercut the prices of the little producer.
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mwj
Well-known member
I said that the producer can set there price. I did not say they were guaranteed sales. The same with packers. If they had control they would not be paying over $2.50 for fat cattle, they would have just raised the price on boxed beef.
Some people think the fact that a day old calf can bring a thousand bucks is insane and maybe it is. But the market does not induce people to sell all there calves at that age. Markets and buyers make up a very complex system.
If the packers (the big 4)stopped buying cattle tomorrow what would happen? Given time we would end up with basically the same structure with diferant names on the company's.
Much the same as car company's over the years. The consumers will dictate how it ends up. As dad use to say ''root hog or die'' and it is the same with business. Unless we sell direct we are selling a commodity and others will take a share of the profit and dictate the prices they will pay or take.
Some people think the fact that a day old calf can bring a thousand bucks is insane and maybe it is. But the market does not induce people to sell all there calves at that age. Markets and buyers make up a very complex system.
If the packers (the big 4)stopped buying cattle tomorrow what would happen? Given time we would end up with basically the same structure with diferant names on the company's.
Much the same as car company's over the years. The consumers will dictate how it ends up. As dad use to say ''root hog or die'' and it is the same with business. Unless we sell direct we are selling a commodity and others will take a share of the profit and dictate the prices they will pay or take.
Most of us sell in to a market. The market decided our price. The market is set by 4 big meat packers.
The only way around that is to make your own market.
The only way around that is to make your own market.
