Bred Cow Prices

[pickarock]

What are the going prices out there for young bred cows in good shape?

[kato]

Our buyer told us yesterday that $600.00 will buy the best of the best at the sales he's seen. Most are $400 to $500. We didn't ask him what the older and poorer ones were, but can only imagine.

[pickarock]

Pretty sad for guys trying to sell........ I guess a deal for us wanting to buy. Wondering if the bred hfr market will be much higher.

[brian99]

Saw good heifers on TEAM for $825. I don't expect good cows to be much over $600. Who wants to winter cows now? I'll buy a few, but later on. Tax money might buy a few, reputation herd dispersals might bring a little more, but with $4.00 barley, it could be a while before these cows pay again.

[raymondb]

How much more does it cost you per day to keep your cows with $4.00 barley compared to $3.00 barley?? Did you also consider that hay prices have dropped about 25%. How much more does it cost you to feed your cows on land that have increased a whole bunch in value? I wander what the "market demand for beef" costs you per ady to keep your cows? I truely believe that cattle prices are lower now because there is a overabundant supply of cattle globally and this affects your return a whole bunch more that $4.00 barley. Just trying to understand the whole picture and not just one little corner.

[smcgrath76]

I'd like to jump in here.
It doesn't cost us any more (other than input cost increases) to keep a cow now than it did last year or the year before. With some operational changes it may even cost a little less when we are all said and done with the books.
Land should be valued at the cost it came into the enterprise at. If you bought land at $100 an acre, you have an asset that has tied up $100 and must generate a return to that $100. If you bought it at $1000, then it must generate a return on that $1000. Appreciating land value may be an opportunity cost, but it also reflects a return on investment.
$4 barley hurts, not because we feed our cows barley, but because a lot of people feed it to my calves. I am pretty certain most feedlots budget X dollars to get a calf finished. In other words, if I figure on spending $1000 to get a calf in, grown and out the door and feed is $500 then the calf will be $500. If feed is $400 then the calf is $600.
There is some argument to be had over beef demand, but in general the demand is increasing over time as more people globally move up the social ladder. As incomes rise, people tend to spend more on protein.
I think you have hit on a good point about beef demand though, and maybe the question is, in general does beef demand reflect itself in prices to the Canadian cow/calf producer?
The dollar is also wreaking havoc at the moment as we are largely a supplier to the US.
The bigger question is probably where is it going to go? and for an individual operation, do you have to/need to sell now, do you want to sell now, and if not what is the plan?

[raymondb]

Thanks SMCGRATH

I also wander what the latest report linking red meat consumption to cancer cost the producer. I normally eat a 10 oz steak or larger yet this report as reported by the media says I should only eat around 3 oz. This is the report that was on television about a week ago. My taste buds barely get into gear with the first 3 oz.

In regard to barley costs, I think most good feedlots would forward sell the finished product prior to buying and that the finished product price would affect the calf purchase price more than the price of barley being a dollar a bushel higher. I think mortality rates are the largest risk that feedlots take.

[raymondb]

to raymomd b the mortality rate is no more big deal in feedlot weaning calves.
modern drugs micotil and draxin are labour savings and less than 1 % dead -loss .
feedcost for 1.5 lbs gain in s- alberta is around 0.90 cent/ pound in the u-s-a it is 0.75 cent .than the cattle are close to plant to be killed !!!!
selling fats in ab canada today at 75 to 77 cent makes calfprices to high!!
we have to many old cows on offer in w -canada .calf prices coming down more yet,or u-s-a is going todump on us possible listning to ab feedlots going broke and closing up .

[kato]

Bred cow prices are driven lower right now because there are more sellers than buyers. Simple as that. Lots of guys just wanting out at any cost. I've seen a lot of pessimism in this business over the years, but right now it's about as bad as I've ever seen, right up there with that first BSE cow. A lot of guys have just had enough. We've got neighbours bailing out like crazy.

Twenty years ago if you came to our area in the spring you could buy between two and three thousand backgrounded calves. Come around next spring and you'll find about 250, and they'll all be in our yard. Everyone else is gone. We're the only ones left crazy enough to do this for a living. LOL. The backgrounders are gone and their fences and feedlots are now grain fields, owned by two or three big grain farmers. The cow herds are going to be next.

I think our industry is restructuring. Downsizing. What that means in the long run is anyone's guess.

I suppose for those of us who survive things should get better, in theory. The trick is to survive.

[ivbinconned]

Saskatoon yesterday, good young cows and heifers...$775 to 850.

The US south eastern drought must be pushing prices lower too I would think. There has been a sell off in some areas.

[DogPatch]

If we bought a cow for $1000, and are upset about her being only worth $200 after 8 to 10 years of use, why doesn't anyone look at this like depreciation on a piece of machinery?

If its a cull after only 5 yrs, then she was a poor model, and we're lucky to get that back!

Trouble is most of us that complain the loudest, likely have too much capital costs that those culls are being used to pay for.

[dfarms11]

the trouble with cows is they can depreciate that much over night! No machine will depreciate 80% overnight unless it is in an accident or something, but you can insure for that, cows, you cannot.

[smcgrath76]

Cow maintenance and cow depreciation are two of the biggest costs in any cow calf operation. We all do things to reduce maintenance cost, such as calving season, cheap feed sources, least cost rationing, controlling cow size. Not many of us (myself included) are really good at addressing the depreciation rate of our cowherds. There are some tools out there to help, but it is a tough thing to do.
Anyone have any ideas?

[brian99]

Sorry I didnt reply earlier, and I guess smcgrath addressed the missunderstanding. $4 barley causes low calf prices, and the resulting nonprofitabale cow herd causes low bred cow prices. Heard heifers quit selling at Perlich Bros. (Lethbridge) because there were no bids over $800. A few old blacks sold for good money, though.

I think most of us cow guys have done a good job keeping costs in line. When we are faced with a skyrocketing dollar, poor fat basis levels(which no one is talking about), and higher barley costs, all you can do is background longer and shrink the meat supply. After all we're the only cattle guys who can.