Predicting the future

[Jogeephus]

I think most everyone is pleased with cattle prices but I think many may also have some concern as well and I'm wondering what people's predictions are for the future and if any are planning on expanding or just sitting tight. I know there are a lot of factors like drought and reduction of inventory in the west but seeing 4 wt calves bringing $1000 you gotta wonder how can this pencil out from the barn to the grocery shelf.

I've always been in the camp that is leery of high beef prices since alternatives such as chicken or pork can so easily cut into the market and cause a surplus of beef which can drive down the price to an artificially low price and the producer ends up being left to shoulder the burden.

After spending some time looking at the price spread between various types of meat at a grocery store I was surprised to see how little spread there was between chicken, pork and beef and I wonder if my fear of beef being scrapped from people's menu's is still as valid as it once was.

I'm just wondering what others take on this situation is. Myself, I plan on expanding my herd with holding back some replacements. I don't plan on buying any or doing anything rash because I'd rather lose some opportunity rather than money.

 

[skyhightree1]

I am wondering the exact same thing. I had already planned to buy cattle. I feel as thought there will be a drop in prices coming down the pike pretty soon and it will go back up again. I am thinking it may be a drought in our area this year since we got so much rain last year. The last drought we had is when most of my cattle were bought. If there is a major drop in prices no matter the cause I will buy as many as I can because prices will go back up. Jo to answer your question I do think about it every week when I check the reports.

 

[Nesikep]

I am close to my capacity, so I'll keep an extra heifer or two, and sell some not so good cows while I get a good price for them, and try to improve the quality of my herd... I don't think it's the time to go buy a large number.. if I had to, I'd do it in the fall, and hay your fields for the summer. I think it's a good time to sell lousy performers!

Correct me if I'm wrong, but pork and poultry finishers are more dependent on grain prices than are beef finishers... to beef, the grain is still a supplement, while in pork, and particularly poultry, it's more the main ingredient... along with beef offals of course

 

[Caustic Burno]

I think most everyone is pleased with cattle prices but I think many may also have some concern as well and I'm wondering what people's predictions are for the future and if any are planning on expanding or just sitting tight. I know there are a lot of factors like drought and reduction of inventory in the west but seeing 4 wt calves bringing $1000 you gotta wonder how can this pencil out from the barn to the grocery shelf.

I've always been in the camp that is leery of high beef prices since alternatives such as chicken or pork can so easily cut into the market and cause a surplus of beef which can drive down the price to an artificially low price and the producer ends up being left to shoulder the burden.

After spending some time looking at the price spread between various types of meat at a grocery store I was surprised to see how little spread there was between chicken, pork and beef and I wonder if my fear of beef being scrapped from people's menu's is still as valid as it once was.

I'm just wondering what others take on this situation is. Myself, I plan on expanding my herd with holding back some replacements. I don't plan on buying any or doing anything rash because I'd rather lose some opportunity rather than money.

Jo this is a real conundrum yes beef prices are high but chickens are as well.
Bought some chickens for the smoker, chickens averaged 8 bucks apiece.
So cheap meat is not out there.
Now doing this for as long as I have I am convinced prices will come back down through imports.
But down to what is the real question. The drought being so wide spread is something like I have never seen
and is still ongoing in parts of the state and country. This is an anomaly that has my crystal ball muddy.
I think I am going to hold the resident herd steady and keep picking up opportunity cattle in the spring to turn in the fall.

 

[Jogeephus]

So cheap meat is not out there.

I saw the same thing. I couldn't believe how high meat was.

Good point about the imports.

I've also heard talk about a protein shortage in the future. I wonder if this is real and what effect this will have if it is.

 

[Aaron]

EverythIng is steady as she goes here. Always keep back heifers and always cull hard. All my older neighbours are now contemplating calling it quits this year, so I could see a lot of opportunity for expansion in the future.

 

[Stocker Steve]

So cheap meat is not out there. Now doing this for as long as I have I am convinced prices will come back down through imports. But down to what is the real question.

I know we can grow a lot more beef, but it will require using a lot of crop residue for most folks. One of the three big grain guys in my area started selling corn stalk bales last fall. I think it is a sign.

Over educated folks did some figur'in and concluded that high beef prices were not causing a lot of switching because:
1) beef consumption is already down from historical levels
2) white meat is expensive too
3) beef tastes good

Some restaurants are running a lot of lobster specials because it is now cheaper than beef. So I am predicting that bacon will become a luxury item, but we will still be enjoying a lot of surf and turf in the future! :banana:

 

[greybeard]

Not to sidetrack this thread but Bacon, in this country will never become a luxury item, even if it goes to $20/lb. It's a necessity, and one of the very few real matters of national security. Gasoline can go to $7/gal and they might eventually take all the "assault" rifles, but the day bacon gets priced beyond the reach of everyday Joe is the day there will blood in the streets of every city, village and town.

 

[Dega Moo]

I've heard there's a disease or virus spreading that is killing a lot of piglets or causing them to have to be destroyed and depressing pork production. Along with reduced cattle numbers and exports of beef, pork and chicken there's not enough relief valve to regulate protein prices in the usual fashion.

While we all love high beef prices I've heard several folks say this is the very best time to liquidate a herd. And it's nearly cost prohibitive to expand with cow and heifer prices at historic highs. I think we'll see at least three more years of these higher beef prices, unless the government opens up and encourages the import market.

I believe we're going to see two distinct beef markets emerge: one based on hamburger and the other on higher end cuts and quality meat. Each market will require distinctly different herd management, development and marketing.

We're trying to grow our herd at this time.

 

[SRBeef]

US retail beef prices are still very modest by world standards.

The US cattle herd is still very low and not going to change very quickly. It can't.

World population is increasing and becoming wealthier and they want beef.

Most people are not looking at chicken or pork as a direct substitute for beef. They want beef.

I am growing my herd by retaining heifers. That removes them from the near term beef supply.

It takes 4 to five years to make a net increase in the US beef herd.

I don't think the current cattle situation will change dramatically in the near future. There will continue to be a steady but slow increase in fat prices as heifers are retained, culls sold.

Drought conditions cause an increase in liquidations causing pauses in fat price increases but the increase will continue as liquidations taper off...there aren't a whole lot of cattle left to liquidate.

Jmho

Jim

 

[lavacarancher]

I'm sure this is on a lot of folks mind right now. I culled very heavy last year - not because of the prices but because of the weather. I'm down to about 60 head right now and don't plan to buy anything, again, because of the uncertainty of the weather. I'm not selling any heifers either but I do have a half dozen steer calves in the 4 to 6 wt. class that I'm hauling off in a couple of weeks. My animals have faired really good over the Winter with most being in body condition 4-5.

I am a very small time operator compared to you folks but I'm not moving just now, just waiting and seeing. The old saying that you should buy low and sell high comes to mind. Seems like that is upside down right now.

 

[Stocker Steve]

Not to sidetrack this thread but Bacon, in this country will never become a luxury item, even if it goes to $20/lb. It's a necessity, and one of the very few real matters of national security.

Have you tried the turkey "bacon" ?

 

[shaz]

Not to sidetrack this thread but Bacon, in this country will never become a luxury item, even if it goes to $20/lb. It's a necessity, and one of the very few real matters of national security.

Have you tried the turkey "bacon" ?

Friskies or maybe Meow Mix.

 

[Bez__]

EverythIng is steady as she goes here. Always keep back heifers and always cull hard. All my older neighbours are now contemplating calling it quits this year, so I could see a lot of opportunity for expansion in the future.

Aaron - our land sells for about $8-12K per acre - what would a 200 plus acre operation in your area be worth today with reasonable buildings, fences and a liveable house

We could toss this place for about a million and keep darned near all of it - just wondering.

Thanks

Bez

 

[backhoeboogie]

So cheap meat is not out there.

I saw the same thing. I couldn't believe how high meat was.

Good point about the imports.

I've also heard talk about a protein shortage in the future. I wonder if this is real and what effect this will have if it is.

We are headed to another Carter era inflation rate. My opinion. Its gonna hurt people on fixed income. It'll be good for people deep in debt. Middle income people will be thrust into higher tax brackets and have less overall buying power. A few years from now we may be saying, "I could have bought that land for............."

 

[Nesikep]

here, a 100 arable acre place, with a small old barn, a doublewide trailer, a moderate tractor, swather, and round baler, some older corrals, is about $1,000,000, so $10k/ac

If we were to sell, we have about 60 acres, an old house, new shop, new hay shed, it would probably be the same price, but with much better veggie production potential

 

[Limomike]

I figure the prices are gonna do whatever they will do.. go down? yes. but for how long? If they do they do... as long as a person doesnt go out and extend themselves on credit.. they will be fine. I have been holding back replacements for 5 years now.. got my herd up to where almost capacity, but leaving a little room. My biggest concern is the drought... I think as CB once said.. we are all really in the grass business..

 

[Dave]

Last night I was in the grocery store and I considered buying something for a change of pace. I raise my own beef, pork and chicken so I looked at fish. Halibut was over $11, red snapper from Canada was $8, fresh sole was $8, frozen cod from Peru was $7, and farm raised salmon (not fit to eat) was over $8. I past on the fish and went home and thawed out a steak. Beef didn't look that expensive. Protein is going to be expensive and I don't care what form you buy it in.

 

[TexasBred]

We are headed to another Carter era inflation rate. My opinion. Its gonna hurt people on fixed income. It'll be good for people deep in debt. Middle income people will be thrust into higher tax brackets and have less overall buying power. A few years from now we may be saying, "I could have bought that land for............."

That's when mine goes on the market....every acre. I'll be ready for assisted living by then anyway and will just sit and look at the pictures of the old cows I "use to own".

 

[Stocker Steve]

our land sells for about $8-12K per acre - what would a 200 plus acre operation in your area be worth today with reasonable buildings, fences and a liveable house

Assesssor says the market value for 2 of our parsels went up 8.9% and 11.7% last year. Hard to believe that, but $7 probably drove a few folks wild. "Good land" is $2,000 an acre. Poor land is about the same. I used to be able to cash flow land with yearlings, but it doesn't look great for 2014.

Now that we have Obamacare will there be a flood of Canadians moving south?