Prices!

[tncattle]

If prices keep going down or just stay where they are we're not selling any heifers and might also keep back all the steers to until they're heavies. I know everyone can't do that but I'm not selling good quality 5 wt. steers for a dollar and good quality 5 wt. heifers for under a dollar. I don't expect the crazy prices from two years ago but a dollar a pound just won't cut it IMO.

 

[True Grit Farms]

I agree 100% with your decision. Wish I had the feed to be able to do that myself. Seems like most folks are doing exactly what your doing except most folks I know aren't keeping the steers back. The bad thing about doing this is the market will stay on the down side longer. I don't know how the folks that rent land and finance cattle can make it work.

 

[TennesseeTuxedo]

If prices keep going down or just stay where they are we're not selling any heifers and might also keep back all the steers to until they're heavies. I know everyone can't do that but I'm not selling good quality 5 wt. steers for a dollar and good quality 5 wt. heifers for under a dollar. I don't expect the crazy prices from two years ago but a dollar a pound just won't cut it IMO.

I'm doing the same thing. Luckily we had a great year of hay production.

 

[True Grit Farms]

If prices keep going down or just stay where they are we're not selling any heifers and might also keep back all the steers to until they're heavies. I know everyone can't do that but I'm not selling good quality 5 wt. steers for a dollar and good quality 5 wt. heifers for under a dollar. I don't expect the crazy prices from two years ago but a dollar a pound just won't cut it IMO.

I'm doing the same thing. Luckily we had a great year of hay production.

With your business background, do you think everyone holding back heifers is compounding the problems with the market?

 

[Ojp6]

If prices keep going down or just stay where they are we're not selling any heifers and might also keep back all the steers to until they're heavies. I know everyone can't do that but I'm not selling good quality 5 wt. steers for a dollar and good quality 5 wt. heifers for under a dollar. I don't expect the crazy prices from two years ago but a dollar a pound just won't cut it IMO.

I'm doing the same thing. Luckily we had a great year of hay production.

With your business background, do you think everyone holding back heifers is compounding the problems with the market?

I'm not the one you asked but in my opinion it could hold the market up a little in the short term because less of this years calves will be on feed. Lower supply than expected could help prices winter, but that's not necessarily what will happen.
Long term, increased heifer retention beyond replacing culls will likely hold prices down. Increasing supply in a market that is falling is generally going to keep pushing prices down.

 

[Stocker Steve]

Lower supply than expected could help prices winter, but that's not necessarily what will happen. Long term, increased heifer retention beyond replacing culls will likely hold prices down. Increasing supply in a market that is falling is generally going to keep pushing prices down.

Just think if we keep our 2016 heifers, and our 2017 heifers, and 2018 heifers ...

 

[Ojp6]

Lower supply than expected could help prices winter, but that's not necessarily what will happen. Long term, increased heifer retention beyond replacing culls will likely hold prices down. Increasing supply in a market that is falling is generally going to keep pushing prices down.

Just think if we keep our 2016 heifers, and our 2017 heifers, and 2018 heifers ...

Since everybody I've talked to seems set on keeping heifers while the prices are low, here's a question I've been thinking about.
Will it take a drought, and subsequent sellout of cows, similar to 2011 in order to send the market back up?

 

[RanchMan90]

Basic supply and demand. Though a larger volume of heifers should raise net income on lower margins. Following the business model of a grocery store not a jewelry store

 

[1982vett]

Just think if we keep our 2016 heifers, and our 2017 heifers, and 2018 heifers ...

Getting barn blind are we?

So you keep back heifers, what do you think a bred heifer is going to bring 20 months from now? Based on everyone saying they are going to hold back their heifer I can only guess they will bring a lot less than a two year old bred heifer brings today. One from your forecasted continued market slide and then for sure a greater lack of interest from the "get rich quick" crowd. I suspect most of them haven't been forced out just yet but I'm pretty sure it has begun.

 

[tncattle]

We don't "feed" anything, we have the grass & hay to keep everything.

 

[TennesseeTuxedo]

We don't "feed" anything, we have the grass & hay to keep everything.

Ding, ding, ding... exactly.

I have been planning on expanding our herd for a couple of years. I'll do a hard cull down of the older gals and retain the best of the heifers.

 

[Stocker Steve]

Just think if we keep our 2016 heifers, and our 2017 heifers, and 2018 heifers ...

Since everybody I've talked to seems set on keeping heifers while the prices are low, here's a question I've been thinking about. Will it take a drought, and subsequent sellout of cows, similar to 2011 in order to send the market back up?

Optimistic thinking ;-) is the Fed will trash the U$S and we will export our way out of this. Otherwise:
- drought sell off
- big big heifer fueled wreck that forces retirements
- CRP expansion that cuts US production

So 50% chance that commodity ag gets bailed out by Washington, again, and a 75% chance cows get cheaper. I love it when a plan comes together!

What is the optimum number of heifers to retain when there is a 75% chance their value will go down?

 

[Dave]

Since everybody I've talked to seems set on keeping heifers while the prices are low, here's a question I've been thinking about. Will it take a drought, and subsequent sellout of cows, similar to 2011 in order to send the market back up?

Optimistic thinking ;-) is the Fed will trash the U$S and we will export our way out of this. Otherwise:
- drought sell off
- big big heifer fueled wreck that forces retirements
- CRP expansion that cuts US production

So 50% chance that commodity ag gets bailed out by Washington, again, and a 75% chance cows get cheaper. I love it when a plan comes together!

What is the optimum number of heifers to retain when there is a 75% chance their value will go down?

CRP expansion isn't anywhere on the horizon. There is actually a national limit to CRP acreage. It is 27 million acres. They are already close enough to that number that back in early September they halted any new contracts or renewals until after the start of the new federal fiscal year (October 1).
But you are right on those heifers. I keep hearing people say that they are holding back heifers at this price. Unless they plan on culling real deep in their cow herd this isn't a real good idea.

 

[TennesseeTuxedo]

Cull 'em deep and sell 'em cheap!

I'm having the new business cards printed up as we speak.

 

[kjonesel]

I am sticking to my business plan and when they are ready (feeders) I put them up for sale. If you stick to your plan you hit the highs and the lows but you don't have to worry about winning and losing. The law of averages takes over.
I have watched many a person play the commodity games and every single one of them end up broke or if they are using someone's money they end up out of business.

 

[farmerjan]

We don't "feed" anything, we have the grass & hay to keep everything.

You say you don't feed anything, and I am sure you are talking about concentrates, grain etc... but the hay cost you to make so you are in essence still "feeding", and the grass still costs in taxes, or land rents, or ....I get where you are coming from as we also "don't feed anything"; at least very little extra than grass and hay; but there are alot of hours and fertilizer costs and tractor and equipment upkeep costs in that hay; and man hours in taking care of the fences and any bushhogging and stuff for the pastures. Yes it makes it alot cheaper than a feedlot/ confinement type operation....and even if you don't "pay yourself" your time is still a part of the equation.

 

[Brute 23]

It's going to get worse before it gets better IMO.

Not sure if you are debating holding for higher prices or just heavier weights. Remember a bird in the hand is better than two in the bush or money in the bank is better than oil in the tank.

In our area and a lot of areas we have had record rainfall and still people were able to over stock in a blink of an eye. Even with that many animals going back in to production and not to slaughter prices fell. Stack some major droughts on top of these prices and when people have to unload all those cattle on our already down market... it will be bad for cattle prices.

 

[Stocker Steve]

CRP expansion isn't anywhere on the horizon.

2018 farm bill is the next CRP milestone

Should coincide closely with the bottom of this beef cycle

 

[Stocker Steve]

Unless they plan on culling real deep in their cow herd this isn't a real good idea

I was planning on a 25% cull rate, but now I am thinking that is not deep enough.

 

[skyhightree1]

If prices keep going down or just stay where they are we're not selling any heifers and might also keep back all the steers to until they're heavies. I know everyone can't do that but I'm not selling good quality 5 wt. steers for a dollar and good quality 5 wt. heifers for under a dollar. I don't expect the crazy prices from two years ago but a dollar a pound just won't cut it IMO.

I have decided not to sell any for a while including steers some bulls... I am retaining heifers - I got enough grass hay/peanut vine hay to last 3 years probably. I will sit and wait patiently meanwhile buying some breds here and there. The only reason I may sell some is to buy breds. My old culls were sold 3 years ago when prices were high my cows now are average 3-7 years old except for a few that are older with lifetime rights here