Chillicothe
Platinum Member
- Feb 14, 2021
- 10,445
- 6,698
It is threads like this....and comments such as included below, that make this place so much fun. In sort of a satire and snark manner of speaking.
It is clear that many of the posters to this thread know next to zero about cattle and beef economics. Seems not many farmers are posting here.
We do grain on our farms*......not cattle. But I know where our corn and soys go. They go into dairy cows, pigs, and the egg-producing market.
And, to a notable degree what cows and pigs will eat.....so will beef cattle (to fatten). However, western beef cattle depend more on pasturage than pigs do, than chickens do. And even more so in the cow/calf operations.
So, you got drought. You got an increase in input costs --fertilizer, grain feeds, herbicides, biologics. You got an increase in financing costs. So whaddya do to cope? Well, you reduce your herd. Which sends us right back to the 'supply/demand' dynamic.
Sure, that sounds complicated to cityboys who post here or those who have never been around a farm or a ranch....except in magazine pictures.
Accordingly, when faced with complexity......blame Joe Biden.
It makes it all so much simpler then.
Some just love 'work arounds' to being thoughtful informed American citizens.
IMHO
--------------------------------------------
ps.....From Institutional Investor: "
"Cattle supplies are tight and are likely to stay that way for the next few years as drought and high input prices will limit herd expansion.
A smaller herd comes at a time when beef demand remains strong, and that is driving cattle prices higher. Since bottoming during the depths of the COVID-19 pandemic in spring 2020 at $81.45 per hundredweight (cwt), front-month live cattle futures prices have more than doubled, trading around $185 in fall of 2023. Feeder Cattle futures have seen a similar jump in values over that time. Given the biological nature of raising cattle, it will take a few years for inventories to bottom and herd expansion to begin, completing the cattle cycle.
“The earliest opportunity for any increase in production would be in late 2026,..."
Read the following laughers from folks who don't know enough.
And the final word and most insightful:
*Well, almost the last word. For us, on our farms.....we do corn and soys. And just between us folks here.....Bad Vlad's invasion of Ukraine has been veddy veddy good for us. It's that supply/demand hustle again.
Ukraine's production being dramatically curbed helped those of us who have strong crops and nearby markets to sell into. Sure, our input prices have gone up like the beef guys' has .....but we've got satisfyingly strong grain prices that overcome that hiccup.
Life can be complicated, but ofttimes it is just plain fun. And profitable.
IMHO
It is clear that many of the posters to this thread know next to zero about cattle and beef economics. Seems not many farmers are posting here.
We do grain on our farms*......not cattle. But I know where our corn and soys go. They go into dairy cows, pigs, and the egg-producing market.
And, to a notable degree what cows and pigs will eat.....so will beef cattle (to fatten). However, western beef cattle depend more on pasturage than pigs do, than chickens do. And even more so in the cow/calf operations.
- So, let's go to that grass situation. And the drastic drought in the west the last couple of years. Grass needs water. Less water = less grass. And that's just the pasture component. Less water means less nearby corn and soys and alfalfa to grind into feed for both beef and dairy cattle.
- And then Bad Vlad invades Ukraine.....a major producer of fertilizer, (and wheat) and that drives up fertilizer prices world wide (reduce the supply, and still have growing demand = price increase. Duh!).
- And then, the American Federal Reserve boosts interest rates in order to curb the inflation generated by the Covid disruption and the supply-chain damage. Which means the cost of money for cattlemen goes up.
So, you got drought. You got an increase in input costs --fertilizer, grain feeds, herbicides, biologics. You got an increase in financing costs. So whaddya do to cope? Well, you reduce your herd. Which sends us right back to the 'supply/demand' dynamic.
Sure, that sounds complicated to cityboys who post here or those who have never been around a farm or a ranch....except in magazine pictures.
Accordingly, when faced with complexity......blame Joe Biden.
It makes it all so much simpler then.
Some just love 'work arounds' to being thoughtful informed American citizens.
IMHO
--------------------------------------------
ps.....From Institutional Investor: "
"Cattle supplies are tight and are likely to stay that way for the next few years as drought and high input prices will limit herd expansion.
A smaller herd comes at a time when beef demand remains strong, and that is driving cattle prices higher. Since bottoming during the depths of the COVID-19 pandemic in spring 2020 at $81.45 per hundredweight (cwt), front-month live cattle futures prices have more than doubled, trading around $185 in fall of 2023. Feeder Cattle futures have seen a similar jump in values over that time. Given the biological nature of raising cattle, it will take a few years for inventories to bottom and herd expansion to begin, completing the cattle cycle.
“The earliest opportunity for any increase in production would be in late 2026,..."
Read the following laughers from folks who don't know enough.
And the final word and most insightful:
*Well, almost the last word. For us, on our farms.....we do corn and soys. And just between us folks here.....Bad Vlad's invasion of Ukraine has been veddy veddy good for us. It's that supply/demand hustle again.
Ukraine's production being dramatically curbed helped those of us who have strong crops and nearby markets to sell into. Sure, our input prices have gone up like the beef guys' has .....but we've got satisfyingly strong grain prices that overcome that hiccup.
Life can be complicated, but ofttimes it is just plain fun. And profitable.
IMHO
