Price of calves need to double!

[DaneG]

Cost of production is not cut and dried like the nutritional requirements of a cow. Cost will likely range several hundred dollars from low to high between ranches. Number of cows, debt load/overhead, management, calving season and duration and marketing are some of the variables that can influence cost of production. Which all are to some extent are controllable by the manager/owner and ultimately contribute to the outcome of profit or a loss.

[The Don]

I watched Corbit Wall this morning. Calves selling "High". They (back grounders / feeders) can't afford to pay more!
Five weight heifers sold for $1.684 pound or $824 head. Four weight steers just broke $1000. I think that feeding expensive hay to those cows would make the cost to keep a cow alive and in good breeding condition more than $800. A thousand dollars probably won't cover it either (especially when you average steers and heifers).
The "beef business" forgets that the cow - calf operator faces all the same increases that the backgrounders and feeders do.
Most of the podcasts that I listen to ignore or down play the unprofitability of the cow - calf sector. They focus on the drought. It's the drought that has caused all of this and once it rains things will return to "normal". My opinion is the drought accelerated the herd reduction. A herd reduction that was driven by the lack of profitability in the cow - calf sector.
The industry can calculate and tell me the feed / energy required to keep an 1100 pound cow, British breed, on day 180 of the pregnancy, with a - 20 degree temperature, a 25 kph wind and a matted hair coat. They can do that with a relatively high degree of accuracy. But they choose not to calculate the cost of production for those animals.
This year a cow - calf operator should always take the trailer on sale day. Don't be afraid to put those calves back in the trailer... if the prices are not what you need to be profitable.

[WiltonRanch]

Even with current prices it will take years of these kind of prices to make up for the years of poor prices. We are running a little less than half the numbers we were running 7 years ago and even then you could see the scam was collapsing. We now keep only what our land base around home can handle. I’d never want 500 head or some high number to justify a meager existence on cattle alone. Right now the cows complement my grain operation and utilize the poor land and I don’t mind keeping cattle most days. I’m not blessed with table top ground and have lots of of sloughs and potholes. Perennials rotated through the crappy land and cows to utilize them makes sense. Far as I’m concerned that’s the only way they stay around. Nobody values animal protein enough to justify devoting ground to grass which can grow wheat or canola profitably.

[The Don]

There will be a bit of a time lag. But eventually the American rancher in Kansas ,Oklahoma and similar states will start to realize that when you have to feed cattle hay through the winter (and that's expensive hay). Instead of having them graze winter wheat. It costs a bunch of money. They will start to see what it is like in northern areas where cheap feed for the winter is not "a thing".
According to an article that I read they stated that crop inputs to grow that high yielding crop in Canada rose over 26 percent in 2022. They project costs will rise again by 10 to 15 percent in 2023. Cattle producers are also effected by those rising costs.
So if you use real numbers to get an actual current cost of production. Then doubling the price paid in 2021 is not enough. In fact, when you consider that if your business lost money in any year. Going forward you need to substantially increase income to compensate for the loss. Carrying losses at current interest rates is very bad.
Part of the problem is that there is no factual base cost of production. You can tell me that you have a cost of production of $600 / cow. That only has meaning if that is transferrable. If you sell me your farm will I realize that same cost of production?
The "Beef Industry" has been making a lot of money by taking the profit from its foundation producers (cow - calf producers). When you destroy your foundation the structure will fall.

[DaneG]

No, not a penny profit everyone is just raising cattle as an expensive hobby. We are all going broke we just don’t realize it yet!

[The Don]

Prices for cattle have increased They may have doubled. But all of the inputs have doubled or tripled. If you use real data and factual current numbers is there a profit ?

[DaneG]

Well here we are prices have pretty well doubled since the initial post!

[DaneG]

All is well that ends well!

[The Don]

Good to see a happy ending to that chapter!
I was looking for a couple of cords of firewood. It seems that firewood has increased in value to match all the other energy sectors. Now I'm eyeing up the windbreak trees that I planted 25 years ago. I will need to get rid of the windbreak to gain access to the soon to be retired pasture. Anticipating I can crop it or rent it out. A win win finally! It will take a full year to season so I should start soon.
If I make a dollar off of that land it would be a positive instead of losing $10 k plus a year feeding cows.
You know what Canadian Cattle Association says in the 5 % rule. If you make a dollar a year... in a million years you will be a millionaire!
Stay warm!

[shtferbrains]

I sold off about three times.
The last time after sorting a fairly uniform group all similar blacks I still had a part load or odds and end with some good cows that weren't black. Had some good bulls left that were better than most.
Thought I could get to about 100 HD that wouldn't take much effort and the market should be back to $3600 for good young cows.
I overestimated my ability as my pick of the heifers ran me over and blew up my knee when my nephew and I were putting RFID tags in.

I'm a slow learner but I got the message.

Now just custom graze 100 replacements for a friend and rent the rest out.

Seems like I took the cure this time and I'm happy.