Some interesting tidbits from Drovers

[dun]

Wholesale cutout values for Choice and Select beef continue to increase as packers work to push prices paid for fed cattle through to the retail level. At the same time, retail prices for beef have reached levels that are beginning to generate some consumer resistance.

The ongoing crises in Japan, coupled with rising energy prices and other global issues have created uncertainty across commodity markets, and some pull-back in cattle prices this week would not come as a surprise

prices down $3 to $4 from last week's record highs

Live cattle futures closed limit down on Tuesday, as uncertainty over the reactor issues in Japan took precedent over all other market news.

 

[ddg1263]

I too have been following this Dun. However, I keep thinking that these prices we are seeing now is high for a cattle man, but it takes these price levels to produce beef. Our supply market is decreasing every month, just this quarter I know 2 people who have sold their herds, and another person is selling out in a few weeks. I know it is not huge, but it just shows me that people who have other ways to make a living are not staying in the business. Basically the recession is cutting both ways. Folks cannot subsidies a marginal business when funds are tight. And if this price goes back down to last year's levels, the cow calf producer will dry up. My land cost me nothing. My tractors cost me nothing. I do all my labor myself. And it is still hard to cash flow even with pregnancy rates in the 90's. Hay is expensive. Fertilizer is expensive. Chemicals to improve pastures are high. Feed is out of sight even in bulk purchasing. Fencing and materials all cost.

As far as the crisis in Japan, they need to eat too. And I am concerned that the radiation that is blowing out to sea will contaminate the fish supply in the pacific. Radiation is real. I know I am a cancer survivor who took high doses of radiation in my treatments.

Maybe beef is not something that people want to eat. More and more land is being planted in timber through government subsidies. All I can cat is that this is a unique business to be in that is for sure.