Someone is bullish on the market

[Lee VanRoss]

Where is Hillary when you need her?

 

[gcreekrch]

I should have said why would a buyer give rancher "B" $1.75 at auction when he already bought at a $1.50 from rancher "A".

They all go by today's market. Your calves already have a cost of gain built in and are presold before you contract them.

 

[Dave]

I should have said why would a buyer give rancher "B" $1.75 at auction when he already bought at a $1.50 from rancher "A".

Most buyers need a whole lot more calves than what they contract from one rancher that is why they are back at the sale every week. They may pay a bit more for contracted cattle simply because they haven't gone through the sale with that additional stress and exposure to bugs they haven't been exposed to in the past. The auction relies on there being several buyers wanting the same class of animals. Thus competition in bidding. And in that case they will sell for the market value on that day. Most buyers are contract employees. They get paid based on how many animals they get bought (paid on a % or by the head). They get told what class of animals to buy and the maximum to pay. If they get them bought cheaper the boss is happy. But that only happens if there is no one pushing them higher.

 

[Lucky]

Hmmmmm…….. all sounds legit to me. Can't help but wonder what would happen if ranchers quit betting against themselves though

 

[Dave]

As I said earlier it is the fat cattle getting contracted that hurts. The vast majority of feeder cattle get contracted for a set price at the time of contract. However the packers contract based on cash price the day of delivery. So if JBS contracts a big bunch of cattle they don't need to buy on the cash market. And Tyson knows they don't have to pay as much to out bid JBS so they bid lower. As a result they both get their cattle cheaper. That is where Corbit's 60/40 idea comes into play.

 

[Stocker Steve]

That is where Corbit's 60/40 idea comes into play.

What is it ?

 

[Stocker Steve]

Market is on the upswing and those in charge know there are lots of cows going to kill due to the drought.

Second year of drought in central ND. They are forced to move 50 to 75% of their cows.

How does high cow kill effect/upswing the fat market ?

 

[gcreekrch]

Second year of drought in central ND. They are forced to move 50 to 75% of their cows.

How does high cow kill effect/upswing the fat market ?

Negatively somewhat. The meat will be long gone however when this years yearlings go to kill.

I predict next years feeder market higher yet and would be buying every cheap young cow and whatever feed I could lay my hands on.
When all the world goes one way, it pays best to go the other!

 

[Dave]

What is it ?

My understanding is Corbit wants a law allowing no more than 60% of fat cattle to be contracted. Thus causing the packers to stay active on the cash market. And keep them from artificially driving the cash market down.

 

[TennesseeTuxedo]

There has only been one year in the last 15 that we contracted early and lost money. Last year we put them through the ring and lost money compared to an earlier contract so guess we are even!
It has been our experience that most years anticipation pays better than reality. We have never made a bad deal that we profited from.
It is also necessary for a producer to have a good grasp on markets.
Every cow here that has a steer calf on her will give us $600 back over expenses on the longest feeding winter we have ever had. The Char x heifers and likely the light end heifers will be sold on the open market as neither group will make a load. We will decide what to do with the top and middle once our hay is in.
Never contract your calves for less than you think they are realistically worth!

Clearing $600 a steer is very impressive. My hat is off to you.

 

[gcreekrch]

Clearing $600 a steer is very impressive. My hat is off to you.

The country allows it.

 

[HDRider]

The country allows it.

How many months do you graze?

Hay costs kill me.

 

[Stocker Steve]

Clearing $600 a steer is very impressive. My hat is off to you.

Is this gross margin after paying direct costs ?

Or net profit after paying for both direct costs and all overheads ?

 

[Stocker Steve]

I predict next years feeder market higher yet and would be buying every cheap young cow and whatever feed I could lay my hands on.
When all the world goes one way, it pays best to go the other!

I agree in general, but, we are depopulating due to high feed costs.

 

[Lucky]

$600 a steer calf isn't hard to do in my area. You have to be willing to spend some money on facilities and feed to get there though. Most people I deal with just see any out going money as a dead expense or they think the pay back is just too far out to even try.

 

[kenny thomas]

$600 a steer calf isn't hard to do in my area. You have to be willing to spend some money on facilities and feed to get there though. Most people I deal with just see any out going money as a dead expense or they think the pay back is just too far out to even try.

Are you saying $600 profit is easy after all expenses? I need to learn.

 

[HDRider]

Are you saying $600 profit is easy after all expenses? I need to learn.

Me too brother

 

[Lucky]

Are you saying $600 profit is easy after all expenses? I need to learn.

I calve in a 3 month window so all the calves are fairly tight. Wean at 7-9 months when time seems right. Feed the yearlings through the winter, this cost about $125 a head. Turn out on good grass and try to rotate them with the cattle. Yearlings eat less so this is possible. Sell when they weigh 775-825. Pretty much keep the calves until their 17-18 months old. They'll bring $1,150-1,250 a head.

Problem is to do this efficiently I spent about $25k in facility upgrades. Most people won't do that. I also spent money on being able to get calves to weaning age efficiently…..

 

[Stocker Steve]

I calve in a 3 month window so all the calves are fairly tight. Wean at 7-9 months when time seems right. Feed the yearlings through the winter, this cost about $125 a head. Turn out on good grass and try to rotate them with the cattle. Yearlings eat less so this is possible. Sell when they weigh 775-825. Pretty much keep the calves until their 17-18 months old. They'll bring $1,150-1,250 a head.

Problem is to do this efficiently I spent about $25k in facility upgrades. Most people won't do that. I also spent money on being able to get calves to weaning age efficiently…..

What are the key facilities to run calves on grass ?

 

[Lucky]

What are the key facilities to run calves on grass ?

Lol….. You have to be able to get them to grass cheap and without sickness. You need enough feed storage for 30 tons, truck feeder, cross fences, pools for good water, good fences, a decent place to wean, feed troughs, etc. You also need a good set of corrals and to be able to catch sick ones easily.

If all you needed was grass I'd just run them on the highway.