Prices down

[mwj]

I was talking to a feedlot guy at the sale yesterday. He said all this futures market stuff is the commodity traders. Live cash cattle are still selling for $2.08. This is a man with 15,000 on feed so he should know.

Were you one of the folks talking about buying futures to cover theses high cost feeders. You can't have it both ways if you are using the futures to build a floor under your cattle.

If he has 15000 on feed and no market protection at these prices, he has to be very brave with no banker involved.

 

[farmerjan]

Were you one of the folks talking about buying futures to cover theses high cost feeders. You can't have it both ways if you are using the futures to build a floor under your cattle.

If he has 15000 on feed and no market protection at these prices, he has to be very brave with no banker involved.

No, he said that a person should buy the LRP on the calves... totally different than playing in the futures market....

 

[mwj]

No, he said that a person should buy the LRP on the calves... totally different than playing in the futures market....

Jan they are tied together, you can not protect with lrp if the mkt is going the other direction. The cost would be to much. LRP is like an insurance policy with a big deductible, it will save you from a complete disaster.

 

[farmerjan]

We have LRP on our calves that are coming off the cows in a couple weeks...to be weaned and backgrounded. I get that they are tied together... but... never mind.

Went to a small feeder sale out in "nowhere" WV last night. Prices there have often been cheaper due to the smaller numbers and transport costs over winding mountain roads... thought we might be able to pick up a few to add to some we have... This time the prices were as good as anything here more local... 5 and 6 wt heifers were over $3.00, not many steers there, and they were in the $3.50-3.70 for 5 wts. Did not come home with anything... but went with some other friends, so had a nice evening...
Some smaller steer calves, 350-400 lbs.... here at the local sale were close to the $4.00 mark last week... Did not go yesterday since we went to WV in the afternoon... we'll see what the report says. Available cattle numbers are down... so many sold already wanting to cash in on the high prices... there are not alot of available cattle out there, in this area.

 

[Dave]

Jan they are tied together, you can not protect with lrp if the mkt is going the other direction. The cost would be to much. LRP is like an insurance policy with a big deductible, it will save you from a complete disaster.

LRP is not tied to the futures. It pays based on the market at about a dozen points around the nation. If that market drops below the rate you insured for you get paid. There is no premium paid up front. If the market goes up above the level you insured for then you have to pay the premium. The amount of premium depends the level you choose to insure at. If you insured at the top level and the market only goes up a penny it will cost you some money. At the bottom level it won't cost you much at all. Hopefully if the the market goes up it is up more then enough to cover the expense.

 

[farmerjan]

LRP is not tied to the futures. It pays based on the market at about a dozen points around the nation. If that market drops below the rate you insured for you get paid. There is no premium paid up front. If the market goes up above the level you insured for then you have to pay the premium. The amount of premium depends the level you choose to insure at. If you insured at the top level and the market only goes up a penny it will cost you some money. At the bottom level it won't cost you much at all. Hopefully if the the market goes up it is up more then enough to cover the expense.

Thank you @Dave ... I have trouble getting it explained right... and I knew it was not tied to the futures market but could not find the right way to say the market it was based on...
The futures market on the stock market is really a big game to so many of them.... most of those ***** would not get their shoes dirty going near a real farm... and only want their steak on a plate served by some prissy waiter...

 

[mwj]

Go to the USDA LRP sight and it will tell you that the price is based on future prices and an adjustment for regional pricing. You buy a policy from an insurance broker like you would any other insurance policy.

It will also give a calculator of the different coverage prices and options. The more your coverage the more it costs. The insurance companies are making a profit and we are shielding ourselves from a catastrophic loss.

As with many things it is not as simple as it looks at a glance.

 

[Dave]

The one huge difference between the futures market and LRP is that anyone with money can play the futures. LRP you are required to actually own the cattle.

 

[bird dog]

Yeah the emphasize that LRP is not for a "investment" of gambling. You are not allowed to buy more coverage than what your acreage or feed lot can carry.

 

[OBAX]

The LRP is based on the CME closing price the day you sold your calves. You may get more in real money, and still get paid if CME closes lower that day. You can absolutely double dip if the stars line up.

 

[Dave]

I looked at the results from Superior sale on Tuesday and Wednesday. I just checked the prices for cattle from this part of the world. Not many calves selling this time of the year. However one pot load of weaned heifers from not too far south of here weighing 545 sold for $3.42. That is $1,863 for 5 weight heifers. Market is looking pretty strong.

 

[cowman82]

super hot here this week. Saw some 560 lb steers going for over 2,400!

I sent in a small group to that sale.

 

[ClinchValley86]

super hot here this week. Saw some 560 lb steers going for over 2,400!

I sent in a small group to that sale.

how'd yours do?

 

[cowman82]

how'd yours do?

i'm not sure i haven't got the check yet. they were all around 500 lbs

 

[elkwc]

Sold 9 head yesterday. A mixed group. Prices were down still frim 2 weeks ago. Felt those 5 weights and under were steady to softer than 3 weeks ago. The 8 weights were still off some but bringing good money. We got a rain 2 weeks ago. Many areas around an inch. The prices for grass calves was hot last week. With the winds and temps over 90 degrees the moisture here is gone. Wheat is burning. That market was softer yesterday.

 

[MurraysMutts]

5 wts bringing 2000 bucks here. Some 400lb calves at 2000 also.
The insanity continues.

 

[cowman82]

how'd yours do?

steers 476 lbs average @ 3.88

 

[ClinchValley86]

steers 476 lbs average @ 3.88

nice!

Mine are 500 to 600 and intact. Thinking I'll band them this week. Also considered trailer weaning to the sale. Mine aren't all black though Yours black?

I also might hang onto them for a little while. Sell the few heifers I don't wanna breed. Got a 30 month old homeraised bull to sell too. That ought to give me some pocket change.

 

[cowman82]

black and black baldies. I have another group of fall calves that need to go but they won't be ready until the end of may probably.