hurleyjd
Well-known member
Milk prices are projected to crash the middle of this year. Will beef prices follow suit? I really do not know but it will happen some time in the future.
Milk Prices
- Thread starter hurleyjd
- Start date
Help Support CattleToday:
greybeard
Well-known member
Milk might drop on excess capacity, and steady demand since it is a staple and lots of it is subsidized thru one state/federal program or another. I don't see how milk demand could increase much, but I don't think beef prices will drop much at all this year--if at all.
Oil is expected to stay low, which means gasoline will stay low and that equals more discretionary $$ in consumer's pockets. Many, who have shied away from beef in the last year will likely be buying more beef since they have extra grocery $$ to spend. Heifer retention is going up, so that will put a little more pressure on the supply side as well, so, in my little view of things, beef demand should remain good on a reasonably adequate but not surplus supply.
:2cents:
Oil is expected to stay low, which means gasoline will stay low and that equals more discretionary $$ in consumer's pockets. Many, who have shied away from beef in the last year will likely be buying more beef since they have extra grocery $$ to spend. Heifer retention is going up, so that will put a little more pressure on the supply side as well, so, in my little view of things, beef demand should remain good on a reasonably adequate but not surplus supply.
:2cents:
Jalopy
Well-known member
I agree with GB with the possible exception that if milk prices get low enough long enough the dairy herd will.be culled harder thus increasing the beef supply. Granted it would not be prime cuts but it will.influence the ground and processed beef price.
cow pollinater
Well-known member
At face value I agree with you but there are quite a few different takes on how to deal with a down market and the most common one that I see is to do business as usual and just bytch louder. :lol: Dairies have been on a boom or bust cycle for quite a while. When they bust they want the government to step in and by the time they get the details all worked out the market is back and nobody wants the government involved in their business anymore.Jalopy":3dp41rzn said:
There will be a few sharp pencils that do sit down and figure out which cows are making money and which ones aren't but most of the big guys will do business as usual and cull the cows that just flat have to go and keep the rest.
We also have to remember that there are more factors in play than just milk price. Fuel and feed are huge expenses and neither of them are near what they were in 2009(the last crash) so that softens the blow quite a bit. Plus the guys who were not paying attention all got decimated in 2009 so the herds that are left are running a pretty tight ship.
It's hard to make a prediction as to what will happen as the economics are different from farm to farm and open to interpretation by every owner but I kind of doubt it will really have enough of an impact to really effect the price of quality beef calves.
TexasBred
Well-known member
You're in what use to be big dairy country. Milk prices have always fallen when school turned out. Usually comes back up when school starts again in the fall.....Right now locals getting over $25 a hundred/weight of milk they could take a little drop and still make pretty good money.hurleyjd":22rha9lx said:
regolith
Well-known member
TexasBred":1wfn8hox said:
Already happened here and it's not a little drop.
Last time prices were this low it was projected that 20% would be left unable to pay their bills/debt... I haven't heard of 20% going bust though, so I suppose they found ways to get through.
It's going to be a tough year but everyone's saying it'll be tougher next year when we're not coasting on the back of a high milk price, so hoping it comes up some before then. Not much in the way of seasonal payments here, just one price for the whole year based on what the world markets are doing.
TexasBred
Well-known member
Rego we've had several of these big drops over the years. Not always a bad thing as it tends to thin out those that never should have been allowed in the business to begin with.regolith":2gehsf9f said:
bigbull338
Well-known member
milk prices have always dropped just as the spring flush starts.and then school lets out 3.5 months into the flush.thats the same cycle its been in for over 40yrs.
Stocker Steve
Well-known member
Calf prices are already down from their fall peak. What do you consider a crash?
Stocker Steve
Well-known member
I think a key part of a growing self financed dairy is they make big capital investments every 3 to 5 years. They can not hold the milk so they MUST re invest the profit or pay the tax man.
Beef guys can re invest too but the cycle is much longer and there are a lot of middle men or added value enterprises holding stockers and feeders and fats... I choose to feed heifers into 2015 rather than pay the tax man.
Historical beef price swings have lasted 4 to 6 years. I hope that continues. If we start importing FMD beef that is bound to change.
Beef guys can re invest too but the cycle is much longer and there are a lot of middle men or added value enterprises holding stockers and feeders and fats... I choose to feed heifers into 2015 rather than pay the tax man.
Historical beef price swings have lasted 4 to 6 years. I hope that continues. If we start importing FMD beef that is bound to change.
