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When will cow prices get good.
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<blockquote data-quote="Bez+" data-source="post: 716689" data-attributes="member: 6797"><p>Actually do not expect a real rise in prices from now until you quit the game.</p><p></p><p>Prices many years ago were as good or better and production costs were far lower - so you are getting less today for what is costing you more to produce.</p><p></p><p>The majors are using vertical integration to control pricing.</p><p></p><p>Essentially they buy and hold cattle when the pricing is down.</p><p></p><p>As the price rises they use their own - forcing prices to fall to where they want to buy and then they top up what they own and hold while slaughtering off the market. Remember - they have banks of lawyers and accountants - and they can work on 1/4 penny pricing. </p><p></p><p>The other problem is competition or lack thereof.</p><p></p><p>When the majors take out the small guys, there is less competition.</p><p></p><p>As well the move to go off shore for cattle and import is growing.</p><p></p><p>Majors are selling out to each other - consolidation of slaughter plants - meaning there is yet again less competition.</p><p></p><p>Over all the game is getting tougher and will stay that way for a long time.</p><p></p><p>Yes, you will see prices rise and fall but comparing to the cost of production - the true cost - not the "I do it for taxes" and sell 10 beef a year cost - the price you receive for your cattle will be low, will stay low and will not likely improve much - or enough - to make a real difference over the next 5-10 years.</p><p></p><p>That being said - should the available product become unable to keep up with demand - pricing will increase - but you will still compete with imports.</p><p></p><p>Canadian dollar is now almost at par with the US so there is a reduction of imports from the north (I believe) - however there is still a lot of beef coming in from southern countries and continents.</p><p></p><p>Remember - your country cannot exist without those imports as you cannot produce enough beef to service your domestic market AND your export markets. </p><p></p><p>So that is why you are topped up with cheap imports.</p><p></p><p>Essentially - until you can match the production cost of imported beef you are well and truly screwed.</p><p></p><p>Bez+</p></blockquote><p></p>
[QUOTE="Bez+, post: 716689, member: 6797"] Actually do not expect a real rise in prices from now until you quit the game. Prices many years ago were as good or better and production costs were far lower - so you are getting less today for what is costing you more to produce. The majors are using vertical integration to control pricing. Essentially they buy and hold cattle when the pricing is down. As the price rises they use their own - forcing prices to fall to where they want to buy and then they top up what they own and hold while slaughtering off the market. Remember - they have banks of lawyers and accountants - and they can work on 1/4 penny pricing. The other problem is competition or lack thereof. When the majors take out the small guys, there is less competition. As well the move to go off shore for cattle and import is growing. Majors are selling out to each other - consolidation of slaughter plants - meaning there is yet again less competition. Over all the game is getting tougher and will stay that way for a long time. Yes, you will see prices rise and fall but comparing to the cost of production - the true cost - not the "I do it for taxes" and sell 10 beef a year cost - the price you receive for your cattle will be low, will stay low and will not likely improve much - or enough - to make a real difference over the next 5-10 years. That being said - should the available product become unable to keep up with demand - pricing will increase - but you will still compete with imports. Canadian dollar is now almost at par with the US so there is a reduction of imports from the north (I believe) - however there is still a lot of beef coming in from southern countries and continents. Remember - your country cannot exist without those imports as you cannot produce enough beef to service your domestic market AND your export markets. So that is why you are topped up with cheap imports. Essentially - until you can match the production cost of imported beef you are well and truly screwed. Bez+ [/QUOTE]
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