The fall calf run?

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In Alberta right now quite a few cows/calves are hitting the market. The buyers are splitting the calves off and the cows are going to slaughter. Calves 350 to 500 lb. are bringing right around $1/lb. ($.93 US), maybe a couple of cents more for really good calves. Get below 350 lb. and the price drops quite a bit.
I wonder what will happen when the big calf runs come in the fall? Every man and his dog up here is either getting out or drastically reducing their herds this year...there is little feed and it is very expensive. When it costs you more to feed the cow than she is worth it just doesn't work.
I suspect we will see steer calves under 80 cents($.75 US) and heifers under 70 cents($.65 US). Should be some great opportunities for the feedlots in the USA? Better get up here fast and get a great deal!
 
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Seriously, some of you guys in the border states should take a look. There are going to be some really good cow herd dispersals at firesale prices. Lots of young cows and bred heifers for peanuts...all age verified! Why buy someones cull bred heifers when you can buy someones quality replacements for about half the price?
The cattle industry in Alberta is going to shrink quite a bit this year. The Canadian Cattlemans Association is predicting the cow herd will shrink 30-40%. Remember this is after a big retraction last year so we are talking about some pretty good cattle.
R-Calf is about to have all their dreams come true within a year...no more Canadian cattle.
 
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Douglas: I don't think COOL is a real big problem. When it first came out it threw a wrench into the works but it seemed the cross border boys were getting it worked out pretty well.
The problem up here is a lack of feed for winter and poor pastures. We had a really bad drought in most of Alberta this year and the hay crop was extremely poor. There really is no other option to feeding anywhere from 150 to 200 days in most of Alberta as we get brutal winters up here with heavy snow and very cold temperatures. I think after about 8 years of very poor returns most guys in cow/calf have pretty well had a bellyful of the cattle business.
Also up here we lost one packer(Tyson) so now two are left(Cargill and XL) and they pretty well have a gentlemans agreement on how to devide up the cattle! Even with the reduction of one packer neither of these companies are killing up to capacity. With another big reduction in the cow herd it is probable that one packer will have to shut the doors, probably Cargill. All that will be left will be XL...a home grown packer who could teach the big boys a few tricks about being tough on farmers! In fact they make Cargill look like choir boys!
On top of all the economic factors the average age of cattle producers in Alberta is right around 60 years old and most were intending to leave the industry fairly soon anyway. There are very few young farmers who want to get into cow/calf....maybe that is a good thing....shows the young guys aren't as stupid as us old fools!
I think between Alberta and Saskatchewan the cowherd is about 70% of the national beef herd so a 40% reduction will put Canada in a position where they can't supply domestic need. This will be a long term deal as those older farmers who are liquidating will never be going back into cattle. I don't know what the solution will be to keep enough beef on the store shelves as the USA can hardly meet its own domestic market? I suspect the Canadian government will suddenly decide beef from Brazil really isn't all that bad!
 

plumber_greg

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If they reduce the herd by that much, what happens to the hayground and pastures? Here it would be plowed up and farmed till it all washed away, but can they plant wheat or is there a gov. program like our CRP?
 

Bez+

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plumber_greg":1b3sodbm said:
If they reduce the herd by that much, what happens to the hayground and pastures? Here it would be plowed up and farmed till it all washed away, but can they plant wheat or is there a gov. program like our CRP?

CRP?

We could only wish!

Land will go to grain farmers

Bez+
 

mnmtranching

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By the way the US does not come close to supplying its own domestic demand for beef.
We [the US] remains the worlds largest importer of beef.
 

options

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mnmtranching":34obj6z5 said:
By the way the US does not come close to supplying its own domestic demand for beef.
We [the US] remains the worlds largest importer of beef.
Only 950,000 head short seems somewhat close to supplying our own demand I would think.
 

Bez+

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The US of A has always been a huge importer of beef.

There is a very obvious reason for this.

The US has always had - if not the lions share - then a large piece of the international export market.

That means to feed their own people the US has to import beef.

It is really quite simple. The US comes close to being able to use the entire beef "crop" domestically - however you used to send a great deal of it off shore - which is why there was such a cross border trade with Canada

Bez+
 

SRBeef

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Seems to me that the US could easily supply all of our own beef. We export because our quality beef brings higher prices overseas and import because the imports cost less. We truck quality beef to the refrigerator ships at the coasts then truck back cheaper beef for the US consumer.
 
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The USA does ship a lot of quality beef but also a lot of stuff Americans won't eat like hearts, kidneys, tripe etc.
As much as possible hayland/pasture will be ripped up and planted to grain/oilseeds etc. There seems to be a fairly robust hay market for the horse market. Generally the horse set don't get all bent out of shape over the cost of hay!
The fact is what is happening today in Alberta is happening in America too...just our drought is putting the final nail in the coffin for us? Whether in Canada or the USA the returns from cattle really don't justify the costs of raising them.
There will always be people willing to raise cattle. Tax write-offs, hobby, people who don't care if they make money but just want to play cowboy. I'm not saying any of that is bad...it just doesn't work for me personally.
I am not sure if grain production really makes a lot of sense anymore either. It seems to me the true cost of production leaves little actual profit for all the stress and labor involved. Agriculture seems to be such a low return enterprize. Just my opinion.
 

mnmtranching

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options":lztwo2k7 said:
mnmtranching":lztwo2k7 said:
By the way the US does not come close to supplying its own domestic demand for beef.
We [the US] remains the worlds largest importer of beef.
Only 950,000 head short seems somewhat close to supplying our own demand I would think.

The only countries we import by the head is Canada and Mexico. Australia the #1 supplier of imported beef to the US is all in boxes. [billions of pounds] Same as the SA countries.

Before BSE the US was also the worlds #1 exporter of beef. Not tons but in value.

Sure Europe and Asia buy parts that Americans don't eat. Adds very little to the value of our critters. The low value of theses parts any profit would be to packers and exporters, shipping etc.
 

options

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mnmtranching":ycusk9ov said:
options":ycusk9ov said:
mnmtranching":ycusk9ov said:
By the way the US does not come close to supplying its own domestic demand for beef.
We [the US] remains the worlds largest importer of beef.
Only 950,000 head short seems somewhat close to supplying our own demand I would think.

The only countries we import by the head is Canada and Mexico. Australia the #1 supplier of imported beef to the US is all in boxes. [billions of pounds] Same as the SA countries.

Before BSE the US was also the worlds #1 exporter of beef. Not tons but in value.

Sure Europe and Asia buy parts that Americans don't eat. Adds very little to the value of our critters. The low value of theses parts any profit would be to packers and exporters, shipping etc.
Where did you get the idea Australia supplies billions of pounds of boxed beef to the US from? The 950,000 head was the easy way to express how few cattle it would take to become a net exporter again, instead of a net importer. We are only 740,000,000 pounds short of meeting our needs.
 

mnmtranching

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wwwdailylivestockreport.com

The Us imported 3,100,000,000 pounds of beef in 2008. Australia was # 1 exporter to the US.
 

options

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mnmtranching

Could you be more specific? I am unable to find any figure showing the US imports billions of pounds of beef from Australia. 663 million pounds in 2008 I found, but never a billion pounds and not even a sign of billions of pounds.
 

Stocker Steve

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Bez+":3mlkvbco said:
plumber_greg":3mlkvbco said:
If they reduce the herd by that much, what happens to the hayground and pastures? Here it would be plowed up and farmed till it all washed away, but can they plant wheat or is there a gov. program like our CRP?

Land will go to grain farmers

Bez+

Is grain farming profitable in Canada or does it just lose less money per acre than cow/calf?
 
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Steve: Grain farming is profitable in western Canada but like any farmer in North America we are experiencing the old "cost/price" squeeze! It costs a lot of money to grow a crop anymore. The equipment cost is huge!
In Alberta we have fairly decent crop insurance which is almost a necessity with our weather. In my area we have a short growing season which limits what can be grown. Basically the five crops that can make it here are wheat, barley, oats, peas and canola. The most profitable is canola but it can be touch and go some years and due to disease concerns can only be grown in a rotation of about once every three years.
I would guess an average barley crop would be around 90 bu./acre. Wheat around 60bu. for HRSW(more for CPS wheat) and probably 40 bu. for canola.
Our land prices in Alberta are quite high compared to Saskatchewan or Manitoba(the other prairie provinces). This has more to do with oil and gas developement than agricultural values. Sask. and Man.
are both catching up real fast in developing their oil and gas.
 

Aaron

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Sounds like the market in Canada might finally adjust itself. Time to get free of this export-oriented business. Beyond the US, no one saw a dollar more for getting access back into any other country in the world. I don't know where some of our industry leaders get the idea that it is justified to produce excessively to flood other markets, including the US, with our beef. Just talking to a young neighbor (38) tonight. He has been downsizing the past year from 200 to 100 cows as he got too big for the amount of pasture he has (tired of dry-loting), and can't buy any because of the prices people seem to drive it up to. Pastures here have been going nuts lately (45 - 60 grand a quarter), when it should be more like 25. I think the last census of farmer age in Canada was 55...which tells me that within 10 years, agriculture is going to change dramatically up here.

It's unfortunate that the older producers will suffer this year...particularly in a bad economy. However, that might spur the change that has been put off since BSE hit up here. Many said they would get out, few did. Can't control fuel prices on any scale. But it's time to see the equipment and fertilizer companies take a hit in their pocket book with fewer farmers. It's ridiculous to compare implement prices in Canada and the US. I can buy a brand new MF 90hp loader cab tractor from Kansas for 1/2 the price compared to Manitoba. Figure in exchange and shipping..and you still can't come close to matching the price in Canada.

If we can contract 30-40% this year, fantastic! Any of the other Canucks remember the few years leading up to '03? Light calves hitting the $2.00 mark. Where was the national herd? 11-12 million? Then it exploded. Time to get it down to around the 8-9 million mark, or even less. If the packers want to leave, let them. I would imagine XL will soon become the only player in Canada. Even so, those producers that want to get their own plants up might actually have a chance. Our new local provincial plant is expected to start killing Nov. 1. :cowboy:
 
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Aaron: I think you have the situation figured pretty correct. I find your land prices simply amazing! If land here was $45K to $60 it would all be bought up by wealthy city slickers for a playground! In fact a lot of land is being bought up for 10 times or more those amounts for "recreation use" around here!
I personally doubt the national cowherd will contract 30% to 40%? It might contract that much in Alberta...or at least central Alberta, but I can't see it happening across the country.
The American dollar is in trouble and that is giving Canada a lot of problems for exports, whether beef, pork, cars, lumber, oil and gas. The "experts" are predicting the Canadian dollar at par by the end of the year and moving higher in 2010. I hear you on the tractor deal...in fact just about every thing we import out of the USA! The multinational companies have thrown up a bunch of logjams to keep free trade from actually happening for the average Joe.
Feed is really in short supply up here and is very expensive. My neighbor sold 400 bales last week (1400 lb) for $120/bale in the field. Winter feeding will have to start fairly early here due to the pastures being so poor...probably the middle of October. I would suspect 210 days would be optomistic for many cattle producers in my area. With hay at 8.5 cents a pound the feed bill per cow is going to be over $600...just for the feed! The good news is grain is fairly cheap and there is a fair amount of straw available at around 1.5 to 2 cents a pound. A ration of 20 lbs. good barley straw, 10 lbs. barley, and about 1 lb. of 32% concentrate should work out to around $235 for the 210 days(feed only). I suspect some will do this if they want to keep their cows, but like you said there aren't a lot of spring chicks in this business anymore and this might be the thing that gives them that incentive to get out?
 

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