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<blockquote data-quote="john250" data-source="post: 643123" data-attributes="member: 4406"><p>Apparently we are in a long contraction phase. </p><p>The question concerns calf prices. Since feedlots buy the bulk of the calves, first feedlots will have to make money. Grain prices are way down from the highs of last summer, so that is good. Fat cattle prices are weak, so that is bad. Feedlots have lost tons of money for over a year, it seems, and I think the lots will have to see some real strong prices to get optomistic and also to get financed. Plus, the lots are under huge "social" pressure from the Michael Pollan/New York Times crowd. I see this decision by the EPA to regulate dust as aimed almost entirely at the lots, and based more on a social model than a serious environmental concern. Still, the best days of the feedlot biz may be behind us. </p><p>For those of us calf sellers who don't number our herd in thousands, these margins aren't sustainable. The majority of beef will soon come from less developed parts of the world. Cheap land has always been key to the cattle biz. </p><p>I'll venture a prediction that east of the Mississippi (excepting perhaps Fla and some of S Ga) we will either be "boutique" operations selling direct at higher prices or we'll be hobbys. </p><p>There is some hope for the boutique angle, as there are still plenty of people with money to buy good meat. The veggie, no meat, animal rights people are not affecting consumption to any huge degree overall. They are a sideshow, as people still eat meat when finances permit. </p><p>And in the end, as individual farms and ranches, it matters more whether it rains too much or not at all. How's that for a business model.</p></blockquote><p></p>
[QUOTE="john250, post: 643123, member: 4406"] Apparently we are in a long contraction phase. The question concerns calf prices. Since feedlots buy the bulk of the calves, first feedlots will have to make money. Grain prices are way down from the highs of last summer, so that is good. Fat cattle prices are weak, so that is bad. Feedlots have lost tons of money for over a year, it seems, and I think the lots will have to see some real strong prices to get optomistic and also to get financed. Plus, the lots are under huge "social" pressure from the Michael Pollan/New York Times crowd. I see this decision by the EPA to regulate dust as aimed almost entirely at the lots, and based more on a social model than a serious environmental concern. Still, the best days of the feedlot biz may be behind us. For those of us calf sellers who don't number our herd in thousands, these margins aren't sustainable. The majority of beef will soon come from less developed parts of the world. Cheap land has always been key to the cattle biz. I'll venture a prediction that east of the Mississippi (excepting perhaps Fla and some of S Ga) we will either be "boutique" operations selling direct at higher prices or we'll be hobbys. There is some hope for the boutique angle, as there are still plenty of people with money to buy good meat. The veggie, no meat, animal rights people are not affecting consumption to any huge degree overall. They are a sideshow, as people still eat meat when finances permit. And in the end, as individual farms and ranches, it matters more whether it rains too much or not at all. How's that for a business model. [/QUOTE]
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