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Cattle prices...

14,661 Views | 79 Replies | Last: 6 yr ago by txaggiefarmer05
GSS
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...still trending down. Just like oil prices, good for the consumer (eventually), but rough on the growers.

East and Central TX prices

Navasota Livestock report Oct 15th...http://www.navasotalivestock.com/marketreports/2016_10_15.pdf
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histag10
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while that does suck for ranchers, I'd really like to not pay $6/lb for ground.

Though i'm on the oil end of that equation, and i'd gladly pay $3/gallon so my husband keeps his job and raises.
Centerpole90
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I never dreamed cattle would reverse course so quickly.

A young lady from our local FFA chapter wrote a speech a couple years ago in the wake of the drought about balancing between cashing in on the strong cash market and rebuilding depleted herds. Between her first competition and the state contest - the premise was already shaky. In less than 6 months the point was moot.
Chalupa Batman
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histag10 said:

while that does suck for oilfield , I'd really like to not pay $4 for diesel.

Though i'm on the beef end of that equation, and i'd gladly pay $6/lb ground to keep our farm


FIFM
RickSawyer
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And just like the oil market this isn't totally a bad thing.

Inefficient or high cost ranchers will reduce or stop running cattle all together. This balancing of supply and demand through price can be brutal on the families effected, i do sympathize with that but unfortunately supply and demand and laws of economics can't be humanized and have no emotion.

I think the people who can benefit the greatest will be the one's who can do the legwork on when prices have eroded too much (and conversely the people who can identify when prices have escalated too high).

But - What the hell do I know...
Max06
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JBS importing Brazilian beef certainly will not help the domestic market either.
confucius_ag
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Lots of grass, hay and rain. I thought about buying a few replacement heifers.






With my luck, the rain will stop.
Allen76
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Cattle prices down sux
GSS
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Historic cattle price trends for 2010-2014
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Na Zdraví 87
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Sucks. I found a cattle ticket from July of 2014 the other day. Prices were over double what they are bringing now. Granted, I never expected for prices to remain that high. However, that being said, I never expected them to go this low. Especially since we are in a "so called" shortage of cattle.
JSKolache
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Centerpole90 said:

I never dreamed cattle would reverse course so quickly.

A young lady from our local FFA chapter wrote a speech a couple years ago in the wake of the drought about balancing between cashing in on the strong cash market and rebuilding depleted herds. Between her first competition and the state contest - the premise was already shaky. In less than 6 months the point was moot.
Why not? This is what university ag economics courses have been teaching for decades. In any commodity market, you are at the mercy of the buyers. Be prepared to strike when the market is hot & you hopefully you can ride out the lean times. Neither the highs nor the lows last forever - it's always a moving target. Her premise still stands, likely for eternity.
Centerpole90
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So quickly was the operative phrase. Cattle stocks were so low the talk at the time was it would take an extended time to correct - instead it happened at the speed of light. I know how commodity markets bounce - I'm a cotton farmer. Cotton, corn, beans all reset every year at planting time - potential production can respond to market forces almost instantly and an immeasurable fraction go back as seed. Cant plant 2,000,000 new acres of cows next spring.

ETA - yes. Her premise stands, but in that contest it's preferable to have timely or current topics. In a few months her topic was old news - even if true.
agfan2013
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what sucks is that prices havent really come down that much for the consumers yet. Sure I can catch a good deal at HEB every once in awhile, but I kind of figured we'd regularly start seeing brisket around sub $1.50 and sale to .99 a pound or maybe prime for less than $3 a pound. The ribeye steak I bought the other day wasnt that cheap....

I work with agricultural producers and the guys that hedged cattle have a lot of money in their trade accounts to offset the cash markets. But most only hedged about a year out so its gonna get ugly for those guys too over the next year or so.
rancher1953
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Sold several heifers and bull calves this past Tuesday at Four County. Prices way down from the high point of a few years ago. My average weight was 517 average price was $1.05. Those in the know tell me they may be getting even cheaper.
fightingfarmer09
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Just a few months ago there were a few folks on the board wondering what it took to get into the cattle/farming business versus working and living in the city.

This is the exact scenario you have to be prepared for financially and emotionally.
ranchag04
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I do not believe this cattle market is currently trading on fundamentals.
SWCBonfire
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ranchag04 said:

I do not believe this cattle market is currently trading on fundamentals.


Of course it's not. There is market manipulation by those who wish to keep prices low, and the cow calf producer gets **** on, again.

Your local sale barn may go the way of the dodo if this continues. There is such a thing as doing irreparable harm to the industry, and we may already be past that point. The closing of some packing plants possibly is a sign of permanent industry contraction. It is probable that prices don't drop as much if everyone had to buy more cattle to keep their chain speeds reasonable. The permits, cost and labor to replace those existing facilities will likely be cost prohibitive in the future. Numbers will drop, demand may go up, and there will still be no way to substantially increase product to consumers without the slaughterhouse workers falling down from exhaustion. They can only go so fast, and once they have enough head bought to meet capacity, it doesn't matter what the price is in the store, the sale barn price of calves will stay low. Especially for loads of calves assembled from sale barns vs consistent loads of backgrounded cattle with known genetics.

I would not be surprised (especially with branded beef programs like CAB requiring a certain sized animal) if we get robotic beef packing at some point in the near future in at least some of the process. We may be there now. I would hope A&M could be at the forefront of this.
Joe Exotic
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Got my freezer stuffed with ribeyes and tbones I've nabbed at crazy low prices. Even put a few choice briskets in their for $1.68 a pound. Hope it stays this way for a good long while.
fightingfarmer09
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Bayside Tiger Ag said:

Got my freezer stuffed with ribeyes and tbones I've nabbed at crazy low prices. Even put a few choice briskets in their for $1.68 a pound. Hope it stays this way for a good long while.


O&G industry goes to crap and I'm told by the Aggie community how higher gas prices is good for the Texas economy and I should feel pity. Ag commodities go to crap and I'm reminded how awesome it is to have cheap BBQ by the Aggie community.
wadd96
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What sucks is that the cost of raising hasn't really dropped as rapidly... Still gotta have tractors, diesel, feed, hay... etc... This makes is really hard on the local cow/calf operator (read: me.)

I reckon we will be holding calves a bit longer this year... not selling at the premium prices we say for the 500 pound calf... so we'll hold until 700 or so pounds...

Fortunately, we got enough rain that we are grass rich right now... not buying any feed or hay.
All the God's, all the Heavens, all the Hells are within you.
cheeky
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Hope it improves for those affected. In the meantime, HEB needs to lower their prices!
histag10
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fightingfarmer09 said:

Bayside Tiger Ag said:

Got my freezer stuffed with ribeyes and tbones I've nabbed at crazy low prices. Even put a few choice briskets in their for $1.68 a pound. Hope it stays this way for a good long while.


O&G industry goes to crap and I'm told by the Aggie community how higher gas prices is good for the Texas economy and I should feel pity. Ag commodities go to crap and I'm reminded how awesome it is to have cheap BBQ by the Aggie community.



We are still paying $5-10 per lb for brisket. I would for cheap bbq. Or texas gas prices. We are nearing $2.40
EskimoJoe
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I heard this morning that while live cattle prices are down, boxed beef prices are still up. Its a beef packers wet dream. They are making money hand over fist right now. They also said that some feeders are refusing to sell, therefore keeping them on feed longer. That cant go on forever though. I would think that consumers will have to send signals through the market and the retailers will be forced to sell beef cheaper, therefore driving down the price the packers sell for.

People were saying that we will never see cheap cattle prices again. Never say never. The cattle market has always been cyclical and the good times are never here to stay as the lean times arent either.

Those guys that bought those $3,000 bred heifers last year are feeling it now.
mt3950
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2 years ago everyone wanted to harvest venison because of beef prices...now, everyone wants to buy store bought meat because of beef prices. Can't have it both ways. hunt if you want, but don't complain either way!!!
mts6175
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Nm
CS78
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Come on. It's a market just like all the rest. Goes up. Goes down. Humans just have short memories.
SWCBonfire
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CS78 said:

Come on. It's a market just like all the rest. Goes up. Goes down. Humans just have short memories.


I can assure you, people in the cattle business have long memories, because those memories are tied to pain. My grandpa still remembered vividly building a fence down the center of the river in 1955, but vaguely recalled when it finally started raining again in 1957.

There will be further contraction of the industry already a victim of its members being punished for providing a superior product at reduced cost when adjusted for inflation. That is not a prescription for long term success.

The real question long term for the industry is going to be if beef demand is there for you to continue paying big prices. If not, only the select few who can afford it (worldwide) eat steak, the rest eat more affordable animal proteins, if any.

While it is a lifestyle choice, people aren't going to lose money so you can get a cheap brisket at HEB. It gets more profitable to high fence and charge deer hunters exorbitant prices, until that market gets tapped out.
pnsagdad
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fightingfarmer09 said:

Just a few months ago there were a few folks on the board wondering what it took to get into the cattle/farming business versus working and living in the city.

This is the exact scenario you have to be prepared for financially and emotionally.

uhhhhhhh sounds to me like now is a great opportunity to get into it?
Allen76
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Quote:

the rest eat more affordable animal proteins, if any.

I was thinking about that last night while shredding a sendero...... rats, mice, and rabbits like crazy right now..... Naked and Afraid contestants would have a feast.

Meanwhile, yeah I definitely switch to a little more chicken, pork, and fish.

This deer season I am going to grind up a doe and mix with boston butt/picnic shoulder (pork). I know some people on this board do this every year. Already bought my pork at HEB on sale for .99 cents.
GSS
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CS78 said:

Come on. It's a market just like all the rest. Goes up. Goes down. Humans just have short memories.
This time around the speed and amount of the drop in prices is unprecedented, at least for several decades. Hard to plan and budget when it happens in this manner.

And 2011 is still very much a reminder of what can happen, not just a blip in the long term. No short memory involved.
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ranchag04
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Consumer prices haven't gone down and packers are making a killing but just like the overall propped up stock market a day of reckoning is rapidly approaching.

Allen76
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pnsagdad said:

fightingfarmer09 said:

Just a few months ago there were a few folks on the board wondering what it took to get into the cattle/farming business versus working and living in the city.

This is the exact scenario you have to be prepared for financially and emotionally.

uhhhhhhh sounds to me like now is a great opportunity to get into it?
Yeah, maybe SOUNDS like it to you, but as other posts mention, ALL of your costs besides the cattle have not gone down.

Diesel... down a little.... price has very little to do with ag market
Hay.... down a lot... but moves up very fast in a period of no rain
Cattle Cubes.... not down at all
Tractor, equipment.... definitely not down
Fencing.... price of steel controls it, not down at all

And if "getting into it" means buying land, it better be far away from land affected by development prices, or that too does not follow the ag market.
Allen76
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And there is a good chance that for a very long time, the product that you produce will sell for cheaper per cwt than what you paid for it. Those prices mentioned earlier.... a little above a dollar..... could remain there or drop some for 2 or 3 years or longer.
agfan2013
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pnsagdad said:

fightingfarmer09 said:

Just a few months ago there were a few folks on the board wondering what it took to get into the cattle/farming business versus working and living in the city.

This is the exact scenario you have to be prepared for financially and emotionally.

uhhhhhhh sounds to me like now is a great opportunity to get into it?

as allen76 stated above me, your inputs arent getting cheaper. sure you can buy the cows cheap, problem is youre gonna sell them for cheap as well.

For example: october feeder cattle are trading a $1.22 a pound so you buy a 750 pound cow, thats $915. then you turn around and are hoping to sell it in April of next year at 1200 pounds, feeder cattle for that month are trading $1.01 a pound or $1212. If you think you can make money on that $297 margin over 6 months between feeding, cubes, medicine, supplies, upkeep, etc. then be my guest.

The above is obviously hypothetical as spot cash markets will vary some from the Chicago futures price and I didnt factor in stuff like commission at the auction house and more...Ive probably got a wrong number or something in that example but you get the general idea.
schmellba99
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So what am I supposed to be happy about when it's cheap?

Apparently I'm supposed to be glad to pay $4 a gallon for fuel, because it keeps O&G people well stocked with toys and deer leases at really high prices. I'm supposed to want beef to be high so people that raise cows can be happy. I'm supposed to be glad to pay a lot for cotton, soy, beans and any other ag product so farmers can be happy. I'm sure we can justify why I'm supposed to be happy that trucks run $50k+ so that car salesmen are happy, or why a John Deere runs $100k+ so the ag sales guys can buy new shoes, etc. I'm guessing if I were to be happy at low milk prices, I'd be one of those evil people that don't think all the way through and have no concern for the dairy farmer and his plight as well.

What exactly can I as a consumer be happy about paying less for without it meaning that the world is about to come to an end for one reason or another?
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