Price of calves need to double!

[The Don]

I should clarify the cost of production number that I posted does not include labour or a profit margin.
I sold the 2022 calves and I'm waiting for the cheque to arrive.
Watching the posted market prices I see there is a huge spread between male and female. The posted prices don't show much incentive to be in the cattle industry. This could be another wasted year.

[The Don]

Well I'm looking at the cheque and no real surprise it's not the prices I needed.
Cost to produce (less labour , profit and I don't have a final number on interest paid on operating) $1,630 per head. Gross income $1,258 per head. A loss of $371 per head. Average weight was 460 pounds. I chose to sell the calves right off the cows. I had vaccinated a bit later and that delayed calving by 2 -3 weeks so the calves were lighter. I chose not to do a vac-45 program it would be a waste of my time and money. The big spread between male and female took a lot away.
So for that block of 50 cows I lost $18,569.
The final tab will increase that loss because there was a shortfall last year that carries forward. Last years $32,500 + this years $18,569. Carrying forward a debt load of $51,069. @ the current 8% interest it will cost $4,085 to service that debt.
I can't afford to be in the cattle business.
One disappointing aspect of this is that in a year where the price of meat has been at record highs they still choose to make an additional profit by underpaying the cow calf producer. They are pushing their source of the product out of the business.
I saw a headline the other day stating that there are 8 billion people on the earth now. They were wondering how they were going to feed them all. As a producer I wonder why the industry doesn't want to pay a fair price for the food I have produced. There are a lot of cow calf producers who have left the business, the number of producers is dropping all the time (contrary to Statscan numbers). It seems to me there was not a shortage of people producing the product just a shortage of people willing to pay a fair price for that product.
Now they will be short of product and the producers.

[DaneG]

The $ spread between steers and heifers is obscene up to .60 on some weights.
The cheapest money you can use is through Manitoba livestock cash advance 0% only a $250 application fee.

[The Don]

Same weight (a one pound difference) 80 cent a pound difference in price . Male vs female.

[The Don]

I listened to Corbet Wall this morning. He has it figured that if you can hang on for another year that you will be swimming in cash. I have bad news for him. It ain't gonna happen.

[shtferbrains]

Bred heifers selling at a discount to opens.
Yearling prices were stronger off grass than current pricing.
Beef prices are high for consumers.

Last one out turn out the lights.

[The Don]

Looking at prices posted for bred cow sales here. It shows good cows were selling for around $1600 dollars. I bought those good bred cows 25 years ago for $1300 - $1500. Just saying.

[blueversi]

I listened to Corbet Wall this morning. He has it figured that if you can hang on for another year that you will be swimming in cash. I have bad news for him. It ain't gonna happen.

The ever dangling carrot. If you can just pull through BSE, if you can just pull through this drought, if you can just …….

[DaneG]

https://www.canadiancattlemen.ca/livestock/profitable-ranching-is-it-possible/

[The Don]

Well I agree with some of the article.
Where things go wrong is where "they" start dicki'n around with the numbers. If you look at the Manitoba Agriculture cost of production you may notice that they take liberties with the costs, income numbers and supporting information.
In feed costs: There is no calculation / cost included for waste. (University of Nebraska allows 15%)
There are no transportation of feed stuffs included. (Spend 2 or 3 days hauling those bales off the field to home even if its only 5-6 miles you go through a bunch of fuel and labour. There is no mention of transportation costs in the COP)
There are no storage or transportation cost allowed for grain or pellets.
I would have a hard time maintaining a car for the money they allow for maintenance on the equipment (which they share with some other enterprise).
They have "magic manure" it reduces to 1/4 volume so you can spread it easily and its less expensive to handle than the regular manure. I have regular manure so I have to pile it and let the air into it so it will rot. It never returns to the same volume as it was in the bedding mound... it's always more.
I could go on. In my opinion most of the cost of production information is pure fantasy. Weather it's Manitoba Ag or Canadian Cattle Association.
There is an old saying. "Figures don't lie but liar's can figure". Always consider the numbers and where / who they come from.
If you can produce feed on a piece of land chances are that you can produce a crop. Even a 25% crop pays more than the cattle. A rent cheque is "easy money".
The traditional market cycle is not working. With world markets and Packer consolidation influencing the cycle it is no longer valid. Increased Cow calf costs have no bearing on what the backgrounders and feedlots / packers will pay. The Canadian herd has shrunk far more than the American herd. The sales price of American calves is below the cost of production and it has been for several years. However the only thing you hear about is the drought, and the herd reduction because of the drought.
The market will not change until there is a catastrophic event. One more year of drought in America might be the catalyst. But don't hold your breath.
The Canadian herd / producer numbers may be below the point of critical mass. The producers are getting older and there are few young people entering the market. Very few people are going to invest the money required to start or run a cow calf enterprise. Especially if there is never going to be a positive return on investment. If the only way you can get to a positive return is by "creative accounting" and gimmickery ... there is a problem. A young person going to work an off farm job in order to lose money on the cattle enterprise has not got this figured out right. Waiting for the "good years" won't cut it. I've been waiting for 25 years for the first one.
When I review my operation I have reduced costs as much as I can. I am a realist. It's winter in Manitoba, you need to keep the feed in front of the cattle and it's got to be of good quality to keep the cattle alive and prospering. There are efficiencies, but no magic shortcuts. You can only cut costs so much before it negatively effects the cattle. This isn't Kansas or North Carolina.
My next step is to get rid of the continuous parasitic draw on my wallet. The remaining cattle.
Too bad.

[DaneG]

https://www.beefmagazine.com/blogger/burke-teichert

There is plenty of useful management tips in these articles that if implemented will increase profits!
Reading and understanding what he is trying to purvey is one thing, putting it into practice on our own operations can be difficult.(change is difficult for many)

There are also YouTube of him speaking at different events.

[Sheepwheat]

You want to double the price of your calves? Come to the dark side, raise sheep. Do the math.

[Sheepwheat]

https://www.beefmagazine.com/blogger/burke-teichert

There is plenty of useful management tips in these articles that if implemented will increase profits!
Reading and understanding what he is trying to purvey is one thing, putting it into practice on our own operations can be difficult.(change is difficult for many)

There are also YouTube of him speaking at different events.

I know of a guy who literally has no tractor, runs a few hundred head, and has gotten so good at extending his grazing season it is unreal.

[The Don]

Too old to start a new adventure. I was looking for a period of time where the cattle will be able to generate enough cash at a dispersal sale to pay the final bills. I don't think I'll live long enough to see that. They just gotta go!
This is an informational site why don't you post the sheep cost of production numbers and husbandry methods in a separate post? I'm interested to find out how those sheep will do with year round grazing in Manitoba.

[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.