I am no cattleman, but.....

tell me what are you cattlemen thinking right now. Given the situation as it is currently what do you think the future holds in store?

I'm not real optimistic,but I don't think we'll see things fall to where they were in 09. It's always tough going from where we think prices should be,to the reality of where supply and demand think they should be. I rode that roller coaster many times milking cows,so it's nothing new to me.

I don't think milk prices have quite bottomed out yet either.

All a person can do is hang on and hope for the best. One stroke of his "pen and phone" can turn things on a dime sending beef prices into a death spiral. Me,I watch the bigshot ranchers and do what they do. Bunker Hunt owned 16k acres near me several years ago. When he plowed coastal pasture under and planted milo,grain did well. Same thing when he sold all the mommas and brought in weaned calves,feeders did well. Always wondered if his bunch was that smart or if they had advisors (wink wink) wispering in their ear.

(quoted from post at 18:06:49 01/03/16) tell me what are you cattlemen thinking right now. Given the situation as it is currently what do you think the future holds in store?

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Wow I wish I could predict the future. It's hard to even guess what might happen but if history repeats itself we are in for some lean years. I've been in the cattle business all my life and it's been my sole source of income since 2008. I've only seen prices go crazy twice. The 1st time was in the early 70's followed by a nosedive that lasted a few years. Successful cattlemen have learned to not count on good times for more than a year or 2 followed by several lean years. We've had a couple of good years so it's time to water down the soup and tighten the belt.

Do you really want to know? OK, Two things. People have to eat. Food has to be produced in quantity. I see the future of meat production, especially cattle production will continue to decline. It is too labor intensive and who is going to do it? And I believe the consumer would balk if realistic prices were charged at the grocer. So I see an increase in eating grain. I tell young aspiring farmers to experiment with anything that is high in protein. Beans, legumes. The future in ag is food and it will be produced mechanically. Those are two givens. I am 60 years old. I can produce a calf as cheap as anyone and will ride it out. In tough times I think there is a chance a fortunate few may come out smelling pretty good. But there are a lot of variables and with so many things we have no control over such as weather a lot is left to chance. That's my long term outlook. Our Government is not going to let the people starve. We have to have them as consumers to make the whole machine work.

I'll stick with cow/calf. Calves will always sell for something, and if not, at least I can eat one now and again.

I see them tanking. I have had the feeling for the last few years that the 80's are coming back. Not quite as bad maybe, but it's going to be lean for the crazy big guys that have been stealing ground out from others with offers of high cash rent. That's coming back to haunt them before long. At least here it is.

In the 80's hogs were what kept us afloat. Being diversified. I'm going that direction now. All of my hogs are produced for specific customers so I don't run thousands. I farrow to finish hundreds and folks know where to come if they want pork. Just in the last few months I have started doing the same with cattle. I had one wih a broken leg so I butchered her and ground it all. I started peddling ground beef at $4 a pound and was out of cow before I knew it. I'm now on my third butcher in a short while. Instead of feeding out steers and heifers and taking them all to the sale (except my replacements) I am going to start selling direct to the customer. It's a little bit of a hassle if they get 25 pounds here and there, but it pays off when those folks come back for 100 more a week later. I've got the hay running out my ears and pasture land, so I may as well sell "family farm raised, pasture fed, chemical free" critters.

The boys who run just cattle are way better managers than I am. They have to be if they don't have row crops to even it out. I didn't start farming to win it big. My bank account is always scary - asset rich and cash poor. It's what I know to do so I ride it out no matter what direction it goes. I try to plan ahead but that's a hard one. There's a reason farmers are the biggest pessimists there is.

Prices go up and prices go down always have and no reason to think it'll ever be otherwise.Funny thing is when prices are either way down or way up there is always a group of folks that think the price will never go in the opposite direction.I gave up some rented pastures and sold about 1/2 my herd about a year ago,might buy some cattle back if they get cheap enough and rent a couple places again since the fellow that rented them after me is/was operating on borrowed money and bought when cattle were real high.Being 'retired' ain't what its cracked up to be anyway(LOL)

Don't know much about the cattle market. I don't have any myself but about 3 years ago warren buffett put out about beef prices due to the texas herds being so low. He was right on so I would believe if you can find out what he is saying your going to be close. After all the guy has a fortune of money.

Cattle are like any other livestock. You have to keep in the market an watch the highs and lows. IF you try jumping in and out you will rarely hit the highs. You will usually be "late" on them.

As for the current market. We will break even or maybe lose on some of the current fat cattle in the yards now but we made a wind fall on the ones 2 years ago or so. What I have been taught, and try to do, is to save any wind fall profits to off set the losses when the market corrects. Also take advantage of sales opportunities what they are there, do not hold out for the top market. You will miss it 80% of the time. Make your profit and go on.

My plan for this next year is to buy some replacement heifers. I sold forty heifers 18 months ago. I need fresh blood in the herd anyway. It is better to buy replacements on a down market. I should be able to find replacements for 75% of what I sold mine for, maybe less.

As for feeding cattle out right now. Look at what you can lock in the price on the finish end and work you way back to what the feeder calves are worth. I bought several pens last week while back in Ohio. The market was down around the Holidays. I will contract them this coming week. I have three choices right now on when and where they will go. The price is close to the same. Right in the $1.25 range which will work on the price I got the calves at. The key is the cost of the calves. The feed cost is easy compared to the calf price.

I think a good cattleman would look at the last few years as a gift from God. Now its time for a reality check. The party's over, time to go home. Most beef guys will tell you about how many years the have just hung on. Never seen big profits in my experience. If you add the last ten years together then divide I am not sure I have ever made much. Lots of assets, very little cash on hand. Always chuckle when a dairy farmer cries about bleeding red ink. I ask him how it feels to be like a beef farmer. We have always had to run on a tight budget. I run on VERY little borrowed money, and try to pay cash for operating. This will make riding out a dropping market much easier. I think selling to niche markets such as grass fed might be a good option for some of us. This doesn't work for large guys, but for 100 head or less maybe.

You're on to it!
Get as close to the consumer as possible.

They have been a lot lower in the recent past and inputs were about the same price as they are now, to make consistent money in the cow business requires two elements, zero debt and plenty of grass.

imported beef is killing the market.

From a cattleman's newsletter I get:
"The fact that cattle prices are falling should not surprise us. We have been discussing the inevitability of this situation for the past two years. What is surprising, though, is the fact that cattle prices have fallen so far so soon. I did not expect to see price declines of this magnitude until we substantially increased beef production (supply) via herd expansion. It is very important to realize that most of the herd-expansion calves will not be born until this coming spring ? and they won?t be put on the market until next fall at the earliest.

Any increase in beef supply that we have seen in recent months was the result of feeders feeding cattle to extremely heavy weights (1600+ pounds). While most believe this was the result of cheap corn and falling cattle prices, I believe it was the result of human stupidity. Most feedlots still have a backlog of overfed, extra-heavy cattle. As a result, the U.S. is importing lean beef (bull beef) from places like New Zealand to mix in with our huge mountains of beef fat.

Price is a factor of supply and demand. When demand is greater than supply, prices will increase ? and when supply is greater than demand, prices will decrease. Since most of the herd-expansion calves have not yet been born, we should be able to determine that supply is not the problem. If supply is not the problem, then we must assume that demand is the problem. Unfortunately, most cattlemen are unwilling to recognize and consider the obvious.

Retail and consumer demand for beef has decreased significantly ? simply because the price has been too high for too long. Retailers no longer feature beef because they have been losing money on beef. Although consumers still prefer beef to other protein sources, they can no longer afford to eat beef except on special occasions. As cattle prices and beef prices continue to fall, we will probably see a slight increase in retail and consumer demand ? but I am afraid it may be too little too late to do much good.

In other words? the current market crash is not the result of too many cattle. It is the result of cattle prices escalating to a level that was neither justified nor sustainable ? which caused beef to become too expensive compared to competing meats.

Too make matters worse, the export demand for our beef is almost nonexistent. Price is a factor ? but the fact that the U.S. dollar is stronger than nearly all other world currencies is the biggest factor. For example, it will cost Canada $1,370 to purchase $1,000 worth of U.S. beef. I have reason to believe the U.S. dollar will remain strong for an extended period of time. This will keep beef exports at an extremely low level.

Several ag economists expect cattle prices will fall to 50% of the highs we saw in the last quarter of 2014. When I consider that most of the herd-expansion calves have not yet been born, I am inclined to I think prices could fall substantially more than 50%. Suffice it to say, that will be devastating to most status quo cow-calf producers."