When will drought culling drop cattle prices?

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Just got through selling the last few cows that survived the 2011 axe. Yesterday I sold a couple bad udder cows and a "one and done" I bought in 2017. Eighty percent of the remaining herd is age 8-11. I'm aging out. The reward for all the work and investment cost to keep going hasn't been worth the risk. Setting here day 70 since the last drop of rain fell. Being at 40-60% of carrying capacity for the last 12 years is paying off right now. The way I see it, for any of us to continue the fighting the odds, this market had better be the new bottom, unless ALL of our operating purchase needs get a dam big haircut. Yeah, that $60,000 truck can rust on the lot for all I care!
 
SBMF 2015 said:
It may not take that long. I sold a load of fats for a feedlot today. Talking to the cattle buyer about prices and delivery dates. He said they are cutting hours at the plant because they have a surplus of retail product and the packers are saying that they are losing money.
I've been saying for two years that we were going to price ourselves out of our market share. Other animal proteins are less expensive. In the current economic state of most middle class and low income families will buy more chicken or pork.
I don't care how few cows are in the country. If the packers start bidding less than the feed lots cost of production, the feeders will have to start paying less for calves/yearlings.
It won't take long for the dominos to fall in a hurry.
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Demand has not been keeping up with supply for at least 2 months. Beef in storage continues to grow and our export market is getting its lunch taken by Australia. Our beef exports are down almost 10% for 2023 over 2022. Yeah something has to give soon or feeder prices and kill cow prices have to decrease significantly. Just my take and it's worth what you paid.



Current Index Reflects the Equivalent of 106,832 head of cattle.
SUPPLY (Live) 66,262 Hd
Equivalent: $281.07 $257.01
DEMAND (Box) 40,570 Hd*
Equivalent: $296.99 $272.77
Live-Box Spread: ($15.92) ($15.76)

 
SBMF 2015 said:
"We" as in the cattle industry.
And yes we do contribute to the price end users pay. How many people sell freezer beef? How many of those producers do you suppose tell their customers "the cattle market is just too high. Only pay me $1/lb hanging " None. Everyone thinks freezer beef demands a premium because it's farm to fork, raised in a small farm with sunshine and grass.
Now granted that is a VERY small percentage of the meat consumers as a whole are buying, but it's still a portion.
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I fail to see how the few folks selling freezer beef has any effect on the market. It's such a small percentage of the beef industry and likely has little to no effect on the over all market.
It goes a long with whatever the market is doing.
I do agree that folks selling freezer beef can price themselves out of the market if they get too proud of their product.
 
Aaron said:
I don't see these prices coming down for several years, if ever. Gonna see contraction in cowherd in North America like never before in the next 3-4 years. Everyone that rode the wave in 2014 is 10 years older and there are no new 25 year olds jumping in with a million in debt to replace the 80 year old that died at the wheel while cutting outside rounds, or the 64 year old that says it's his time to retire and just collect a rent cheque on the land and let the cropper go bankrupt.

Steaks and roasts will become niche product like lobster. Pork and chicken will take some market share. But neither can scale up quick enough to overcome beef, especially with their disease outbreaks. And nothing can compete with the value and versatility of ground beef. So more steers and heifers might have to hit the grinder...big whoop.

I'm no optimist, but I sure see a brighter future in cattle industry than I ever have in 30 years. Whenever everyone is running to the exits, you walk slowly in the opposite direction.
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I find your take on this situation interesting. We are not running for the exits although we are down a bit in numbers mostly from culling this past year... and are below carrying capacity on pasture/grazing so in good shape that way. Not keeping any extra heifers like we normally do and then make a second "culling" at yearling size.
I think that in one way you are right in about the disease factor taking out chickens and hogs but they also can bounce back quicker with the turn around in reproduction time... and yes, there is nothing as versatile as ground beef.
However, the cattle numbers in South America are up from what little I have seen, and even with the droughts and horrible excess rain in different parts of Australia I think their cattle numbers are down a little or pretty stable.... maybe the cattle guys from there can chime in on that.... so the cattle will get shipped in and people will buy if it cheaper to do so....
We could price ourselves out if the feeder prices get too far out of whack.
I hope that that the contraction of cow numbers will keep our prices higher... but as was stated by another member... the cost of doing it is so much that we are not all that much better off in the long run... yep, that 60,000 truck will sit on the lot...
Has any one priced a new round baler??? My son said one with all the bells and whistles is over 60,000... we will never own one at that rate...
 
farmerjan said:
I find your take on this situation interesting. We are not running for the exits although we are down a bit in numbers mostly from culling this past year... and are below carrying capacity on pasture/grazing so in good shape that way. Not keeping any extra heifers like we normally do and then make a second "culling" at yearling size.
I think that in one way you are right in about the disease factor taking out chickens and hogs but they also can bounce back quicker with the turn around in reproduction time... and yes, there is nothing as versatile as ground beef.
However, the cattle numbers in South America are up from what little I have seen, and even with the droughts and horrible excess rain in different parts of Australia I think their cattle numbers are down a little or pretty stable.... maybe the cattle guys from there can chime in on that.... so the cattle will get shipped in and people will buy if it cheaper to do so....
We could price ourselves out if the feeder prices get too far out of whack.
I hope that that the contraction of cow numbers will keep our prices higher... but as was stated by another member... the cost of doing it is so much that we are not all that much better off in the long run... yep, that 60,000 truck will sit on the lot...
Has any one priced a new round baler??? My son said one with all the bells and whistles is over 60,000... we will never own one at that rate...
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Jan I guess we are all wondering what went wrong, our young cattle market is about half of what it was 12 months ago. Everyone is hoping it has bottomed now but not showing any signs of recovery but people are optimistic on the long term outlook, bull selling season is in full swing at the moment and the results are better than expected. I think there is still room for more herd rebuilding but it seems to be marking time at the moment. A lot of factors affecting things at the moment. We are heavily dependent on our export markets and the frozen beef in storage worldwide needs to be eaten down a bit but consumers are on tighter budgets post covid and interest rates have risen. Our processors are still struggling with getting labour. The Pacific Ocean is teetering on the edge of an El Nino which means droughts for our East Coast and a lot of backgrounders got burnt with the last lot of young cattle they bought so there is a lot of reluctance to do another trade until a better indication is given of what the weather will do so people are being conservative.

Ken
 
I have way more grass than I have cows. I was thinking about keeping some heifers this year but I can buy some good proven brangus cows from a friend for about what I will get for the heifers and I can keep my bull which really does a good job. However if the prices are not going to hold I may just want to stay with what I have and sale the heifers.
 
Charbrangus said:
I have way more grass than I have cows. I was thinking about keeping some heifers this year but I can buy some good proven brangus cows from a friend for about what I will get for the heifers and I can keep my bull which really does a good job. However if the prices are not going to hold I may just want to stay with what I have and sale the heifers.
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If I could buy some decent proven cows for about what I could get for my heifers, I would be adding 25 or more head right now. Even if prices do not hold, the increased cull value of more cattle in just the increased size/weight... would make it a good move if they only have one calf for you.
Keeping your good proven bull also is a plus...
We are also understocked but will not be retaining many heifers this year either... let the grass grow and stay understocked for another year if necessary. I would like to increase another 20 cows... son says we don't want to get any lower in numbers....
But we could lose a pasture tomorrow too... never know.
 
wbvs58 said:
Jan I guess we are all wondering what went wrong, our young cattle market is about half of what it was 12 months ago. Everyone is hoping it has bottomed now but not showing any signs of recovery but people are optimistic on the long term outlook, bull selling season is in full swing at the moment and the results are better than expected. I think there is still room for more herd rebuilding but it seems to be marking time at the moment. A lot of factors affecting things at the moment. We are heavily dependent on our export markets and the frozen beef in storage worldwide needs to be eaten down a bit but consumers are on tighter budgets post covid and interest rates have risen. Our processors are still struggling with getting labour. The Pacific Ocean is teetering on the edge of an El Nino which means droughts for our East Coast and a lot of backgrounders got burnt with the last lot of young cattle they bought so there is a lot of reluctance to do another trade until a better indication is given of what the weather will do so people are being conservative.

Ken
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China, Korea, and Japan have a 4-6 month supply of beef in storage. The same thing is happening in the USA. Demand is not there.
 
wbvs58 said:
Jan I guess we are all wondering what went wrong, our young cattle market is about half of what it was 12 months ago. Everyone is hoping it has bottomed now but not showing any signs of recovery but people are optimistic on the long term outlook, bull selling season is in full swing at the moment and the results are better than expected. I think there is still room for more herd rebuilding but it seems to be marking time at the moment. A lot of factors affecting things at the moment. We are heavily dependent on our export markets and the frozen beef in storage worldwide needs to be eaten down a bit but consumers are on tighter budgets post covid and interest rates have risen. Our processors are still struggling with getting labour. The Pacific Ocean is teetering on the edge of an El Nino which means droughts for our East Coast and a lot of backgrounders got burnt with the last lot of young cattle they bought so there is a lot of reluctance to do another trade until a better indication is given of what the weather will do so people are being conservative.

Ken
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"but consumers are on tighter budgets post covid and interest rates have risen" is the 16% inflation that is slowing consumers.
 
$1.09/lb for my two 1400 lb culls yesterday. I swapped them even money for three smaller long breds of not very good quality. The market report called the packer cows $2 to $3 dollars lower.
Lots of cows coming to town as the sell off continues. Big cows have very little chance of going back to the country.

I am not sure about demand but I did notice that a couple packer cow buyers were absent yesterday and these are guys that never miss.
 
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farmerjan said:
I find your take on this situation interesting. We are not running for the exits although we are down a bit in numbers mostly from culling this past year... and are below carrying capacity on pasture/grazing so in good shape that way. Not keeping any extra heifers like we normally do and then make a second "culling" at yearling size.
I think that in one way you are right in about the disease factor taking out chickens and hogs but they also can bounce back quicker with the turn around in reproduction time... and yes, there is nothing as versatile as ground beef.
However, the cattle numbers in South America are up from what little I have seen, and even with the droughts and horrible excess rain in different parts of Australia I think their cattle numbers are down a little or pretty stable.... maybe the cattle guys from there can chime in on that.... so the cattle will get shipped in and people will buy if it cheaper to do so....
We could price ourselves out if the feeder prices get too far out of whack.
I hope that that the contraction of cow numbers will keep our prices higher... but as was stated by another member... the cost of doing it is so much that we are not all that much better off in the long run... yep, that 60,000 truck will sit on the lot...
Has any one priced a new round baler??? My son said one with all the bells and whistles is over 60,000... we will never own one at that rate...
Click to expand...
I also just priced a new round baler in the thought I'd run two and get the hay up faster. In addition, I priced a fairly new swather as ours is almost costing us more to maintain than it's worth. The baler was $67k and the swather was $167k...Both those will rust on the lot before I buy. Sad fact is the used stuff that had medium to high hours is bringing a premium. Good for sellers bad for buyer. If cattle prices fall one would hope so would equipment prices, but that never seems to happen. Which makes it even harder to keep the cattle business profitable. Good thing we like what we do.🤣
 
@C-Ranch . Son is looking for another baler like his (NH but I don't know which model...) to have another for backup... but I don't know anyone who is rich enough to trade one in and buy a new one now. I liked to fell over when he told me what they were costing.... We make alot of hay... 1500 + rolls total a year.... still cannot justify it. Some we do custom for one guy... 150-200 rolls a year with the smaller 4x5 net wrap baler; but we prefer to use the bigger twine wrap one that makes 5x5+.... Most hay is made on lease/non-fenced land with no water available so grazing is not an option... and some places are on a year to year/keep the land cut and free to us .... except our costs to make it... and we do some fertilizing in the spring when we know we will at least get first cutting....most we know we will have for the season when we start in the spring; but some are in a subdivision and never know when people who have bought will decide to start building... but some we have long term and we do fertilize and some weed control....

We built a hay shed this year to store hay... plan to put "sheds" on each side for more storage but haven't gotten that far yet... and it is full with alot of hay still out along field edges... try to save hay quality and quantity without having the loss from weathering and such. Yes, it adds back to soil fertility...and organic matter back to the soil... but still will be more economical to have the bales be consumed more....
 
farmerjan said:
@C-Ranch . Son is looking for another baler like his (NH but I don't know which model...) to have another for backup... but I don't know anyone who is rich enough to trade one in and buy a new one now. I liked to fell over when he told me what they were costing.... We make alot of hay... 1500 + rolls total a year.... still cannot justify it. Some we do custom for one guy... 150-200 rolls a year with the smaller 4x5 net wrap baler; but we prefer to use the bigger twine wrap one that makes 5x5+.... Most hay is made on lease/non-fenced land with no water available so grazing is not an option... and some places are on a year to year/keep the land cut and free to us .... except our costs to make it... and we do some fertilizing in the spring when we know we will at least get first cutting....most we know we will have for the season when we start in the spring; but some are in a subdivision and never know when people who have bought will decide to start building... but some we have long term and we do fertilize and some weed control....

We built a hay shed this year to store hay... plan to put "sheds" on each side for more storage but haven't gotten that far yet... and it is full with alot of hay still out along field edges... try to save hay quality and quantity without having the loss from weathering and such. Yes, it adds back to soil fertility...and organic matter back to the soil... but still will be more economical to have the bales be consumed more....
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I'm curious what type hay are you getting off non irrigated ground? Is like Crested or Siberian Wheat grass?
 
None of the hay ground is irrigated. The only ones I know in any of the nearby towns/counties etc that irrigate any land are dairy farmers... and that is corn ground, maybe some soybeans, and alfalfa.... There may be a hay grower that irrigates around here but I do not know them. It is too costly and water is not always available except for some that live along some of the rivers.
We make Orchard Grass on about 30+ acres that is planted and managed for that. All other hay fields are mixes.... O.G., Fescue, crab grass, any clovers, johnson grass in some fields, any grass that grows along with the weeds. We make wheat and or rye in the spring for hay, anything we use for winter cover crops. We are making sorghum-sudan grass for hay now. Sometimes we are lucky and can make it as dry hay... like over this past week and coming week... our cows like it as dry hay. But often the weather does not cooperate and we make it high moisture to wrap to make baleage. We have chopped it for putting in the bunk silo.
We do rotations with corn to help control the johnson grass...and the horse nettle.....
We plant and specifically make orchard grass for several horse hay customers and they do not want clover or johnson grass in the hay... We do not have the time to be able to make alfalfa as it is more demanding in the timing... and with son having a full time job and me still part time... cannot always make the hay in the most timely manner so alfalfa is out.
I know that irrigation is widely used some places, but here it is not except for crops for dairy cattle... The only watering that the hay fields get is what God and Mother Nature provides....
 
I was over in West side of Killeen Tx last Saturday (next town, maybe 10 miles East) and right there in the midst of businesses on a very busy Trimmier Street was a small parcel that had just been baled. Maybe 10 acres but it made a lot of rounds. They're baling anything they can here, anywhere they can get it. I've seen the parcel before, pretty weedy and definitely unimproved grass but it'll make a turd.
 

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greybeard said:
I was over in West side of Killeen Tx last Saturday (next town, maybe 10 miles East) and right there in the midst of businesses on a very busy Trimmier Street was a small parcel that had just been baled. Maybe 10 acres but it made a lot of rounds. They're baling anything they can here, anywhere they can get it. I've seen the parcel before, pretty weedy and definitely unimproved grass but it'll make a turd.
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Did u get an In n Out burger?
 

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