|
|
Dec 18, 2022 | 11:34
91
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!
|
|
Dec 18, 2022 | 15:15
92
All is well that ends well!
|
|
|
Feb 10, 2023 | 22:56
93
Well here we are prices have pretty well doubled since the initial post!
|
|
|
Feb 12, 2023 | 07:10
94
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 ?
|
|
|
Feb 12, 2023 | 14:02
95
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!
|
|
|
Feb 13, 2023 | 09:02
96
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.
|
|
|
Feb 18, 2023 | 02:50
97
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.
|
|
|
Feb 20, 2023 | 09:05
98
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.
|
|
|
Feb 20, 2023 | 23:16
99
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.
Last edited by DaneG; Feb 21, 2023 at 22:44.
|
|
|
Feb 22, 2023 | 08:07
100
Agreed. It would be a complicated process to generate accurate costs. There are methods to do that. Accounting methods that which would establish base costs for the industry stakeholders. However using the current "disinformation " should not be an acceptable option. Consider that they don't get the easy part right! That is a choice!
They use these flawed calculations and "information" to present a picture of the industry that is not based in reality. They are in essence "cooking the books".
The cost of this disinformation is born by the cow - calf producer. My opinion.
|
|
|
Feb 22, 2023 | 13:41
101
https://www.canfax.ca/resources/cost-of-production/cop-results.html
|
|
|
Feb 23, 2023 | 07:59
102
II just took a quick look at the numbers. They look more real than anything I have seen from Can - fax before .Canadian Cattle Association before. Hours of entertainment at 03:00 hrs when I can't sleep. My education continues.
Thanks for the link!
|
|
|
Feb 28, 2023 | 10:52
103
That's a lot of numbers!
Looking at the CA-MB-1. "starting late October , 30 days of 20 lbs alfalfa hay supplemented on pasture"
My cows would starve on that ration.
1300 # cow 20 # hay / day = 1.5% of body weight / day.
At a time of year you should be pushing as much food as possible to the cattle. Your last opportunity to get those cows into shape for the winter.
The numbers don't hold up under scrutiny.
There is no cow depreciation shown.
There is no additional feed shown for heifers / young cows. A 13% replacement rate in the herd would result in a total turn over in 7.7 years . At any time greater than 50% of the herd would be less than 5 years old. 5 years old would be a date where that cow would be fully developed and can with stand a reduced ration. But not as low a ration as they are showing.
Even giving up $63,000. in labour the operation is still deep in the red, they are living on fresh air. I could go on...
This is a little more realistic than they usually present, but it is not real.
The reason the cow - calf sector is shrinking is not only the drought. Lack of profit is the big driver.
My opinion.
|
|
|
Feb 28, 2023 | 14:37
104
 Originally Posted by The Don
That's a lot of numbers!
Looking at the CA-MB-1. "starting late October , 30 days of 20 lbs alfalfa hay supplemented on pasture"
My cows would starve on that ration.
1300 # cow 20 # hay / day = 1.5% of body weight / day.
At a time of year you should be pushing as much food as possible to the cattle. Your last opportunity to get those cows into shape for the winter.
The numbers don't hold up under scrutiny.
There is no cow depreciation shown.
There is no additional feed shown for heifers / young cows. A 13% replacement rate in the herd would result in a total turn over in 7.7 years . At any time greater than 50% of the herd would be less than 5 years old. 5 years old would be a date where that cow would be fully developed and can with stand a reduced ration. But not as low a ration as they are showing.
Even giving up $63,000. in labour the operation is still deep in the red, they are living on fresh air. I could go on...
This is a little more realistic than they usually present, but it is not real.
The reason the cow - calf sector is shrinking is not only the drought. Lack of profit is the big driver.
My opinion.
I'll be taking part in the COP study this year, so it will be interesting to see where I stack up with compared to everyone else. Once I get finished with getting tax books ready this week, I can focus more on the numbers as the first zoom meeting with the focus group is next week.
|
|
|
Mar 1, 2023 | 06:11
105
Can anybody explain this to me?
|
|
|
Mar 1, 2023 | 06:58
106
Originally Posted by The Don
Can anybody explain this to me?
Percentage of total revenue averaged over 5 years.
Unless you're subtly referencing the inclusion of cash crops and government payments into the calculation for COP. Which I say is bullshit as well and would call them on it.
But at the same time, I also know that they want to understand which operations are most profitable and why. In this case, it would be due to diversification of income sources.
|
|
|
Mar 1, 2023 | 12:12
107
How it appears to me is.
They are selling the calves to their backgrounding operation and claiming it as income for the cow - calf operation in that year. Then adding the sale amount of the backgrounded calves to that income.
They only have one group of calves that are sold off the farm to produce income. It showed total revenue as $647,412 for selling 239 calves off the farm. Those are expensive calves!
|
|
|
Mar 1, 2023 | 12:23
108
Originally Posted by The Don
How it appears to me is.
They are selling the calves to their backgrounding operation and claiming it as income for the cow - calf operation in that year. Then adding the sale amount of the backgrounded calves to that income.
They only have one group of calves that are sold off the farm to produce income. It showed total revenue as $647,412 for selling 239 calves off the farm. Those are expensive calves!
Ok. I didn't look into the particular farm to see how many calves they actually produced. If that is the case, the only one they are fooling is themselves.
But maybe they got FCC convinced they are doing a bang-up job.
|
|
|
Mar 4, 2023 | 08:30
109
Not exactly true.
These numbers are used to "guide the industry". You and I paid for the development of this information. I'm not really happy with the whole process. Kind of like a "Fox News" version of the numbers. They know they are lying, but they keep pushing their narrative of disinformation to the masses(my opinion).
I know that the numbers for feed are far, far below what I fed cattle for. Keep in mind this includes 2021, the year of the drought. My feed number is way different from what they show.
This must be the fabled "Shangri-La farm" in the land of golden manure!
|
|
|
Mar 26, 2023 | 09:52
110
15444 how did your introduction to Cost Of Production go?
I have reviewed my numbers and have found a way to get my cost of production down. It's a good news bad news story . The good news, I dropped my cow - calf cost of production to $300 / cow, the bad news my wife's grocery bill went up to $14000 a month.
|
|
|
Mar 28, 2023 | 09:33
111
Originally Posted by The Don
15444 how did your introduction to Cost Of Production go?
I have reviewed my numbers and have found a way to get my cost of production down. It's a good news bad news story . The good news, I dropped my cow - calf cost of production to $300 / cow, the bad news my wife's grocery bill went up to $14000 a month.
$14k a month? Your wife must be buying her own restaurant at those prices.
COP wasn't as indepth as I expected it would be. They told us it would be 3 to 4 months before they would have the data tabulated and return results to us.
There were 3 of us for Ontario. Annual cash costs were all fairly similar on a per cow basis. Not surprisingly, it's the capital costs that determines the winners and the losers. Land cost here for pasture land at $1500 per acre, versus $10,000 and $14,000 from the other two participants.
$12.50 to $20 an acre to lease hay land, versus over $100 an acre for them, $75 just for pasture.
Total equipment value, mine pretty meager at $78k. Both of the other participants in the hundreds of thousands, for fewer cows than I.
The first meeting was all about sharing numbers, 2nd meeting was sharing ideas for future.
Question they asked in 2nd meeting: How would you mentor a kid getting started in the industry? Others said buy good stock, retain ownership, selling direct to consumer.
Then they came to me. Buy good 2nd calf ranch cows using breeder co-op financing over 5 years, lease pasture, buy hay, keep land and equipment costs low.
Kind of shocked the other participants as if that's not what a farmer does..you need land and equipment to make hay.
I said my fuel cost to make hay in 2022 was $19.77 per acre of hay. Fertilizer was $37 per acre. Repair and parts cost was about $80 an acre. These costs alone give me a cost per ton of hay at $55. I can buy premium hay in this area for $80 a ton, my biggest issue is logistical in having to source from several producers and the entire lack of supply avaliable in a drought year like 2021.
|
|
|
Mar 29, 2023 | 21:06
112
The 14 k bill for groceries was my attempt at humor.
$37 for fertilizer is not a lot, nitrogen prices here last year were $1500 / ton. You got good results from the fertilizer investment.
The prices you show for hay @ $55 / ton = .0275 / pound is very low. You have other costs that are not in that number, what is your final landed in the yard cost
Even the good quality hay @ $80 / ton is only .04 / pound. You would not be buying quality hay near me for that price. You would not rent pasture or hay land for what you are paying. Here it's more like the $100/ acre pricing.
You still have to add transportation costs to the $80 / ton hay, my rule of thumb is $20 / bale for about a 50 km ride.
There is some risk in renting land. It is character forming to be counting on the continued use of a rented parcel of land and lose it to someone with deeper pockets. Been there, done that, it wasn't fun.
Once you have finished your cost of production number, try running the numbers for someone new taking over your operation. Use market values / prices. That may be enlightening.
|
|
|
Mar 30, 2023 | 06:14
113
Originally Posted by The Don
The 14 k bill for groceries was my attempt at humor.
$37 for fertilizer is not a lot, nitrogen prices here last year were $1500 / ton. You got good results from the fertilizer investment.
The prices you show for hay @ $55 / ton = .0275 / pound is very low. You have other costs that are not in that number, what is your final landed in the yard cost
Even the good quality hay @ $80 / ton is only .04 / pound. You would not be buying quality hay near me for that price. You would not rent pasture or hay land for what you are paying. Here it's more like the $100/ acre pricing.
You still have to add transportation costs to the $80 / ton hay, my rule of thumb is $20 / bale for about a 50 km ride.
There is some risk in renting land. It is character forming to be counting on the continued use of a rented parcel of land and lose it to someone with deeper pockets. Been there, done that, it wasn't fun.
Once you have finished your cost of production number, try running the numbers for someone new taking over your operation. Use market values / prices. That may be enlightening.
My blend last year was $1105/tonne.
If I add labor and a small percentage for any additional costs forgotten, I get a hay value of $120.00/ton or 6 cents/lb.
I know most would not be renting land for what we pay around here. That's why agriculture is on life support in most areas of this country. Pull the rug out on commodity prices and you have full blown collapse.
At $25/bale here, I can hire a contractor with lowbed to haul hay from 50 miles away, so my own costs are much less. I even hired a hot shot trucker to haul hay from 40 miles in 2021 for $10 a bale. I did the math that year and I didn't see how there was any value left in it for him, but he said he was doing fine.
Have done and still do the renting deal. Only ever lost once and that was because the landowner wanted the quarter to go vacant a couple years ago and it will stay that way until he decides to sell. I guess I don't worry about renting because my landlords know I will either pony up more to compete with another renter, or just buy the property outright.
As far as someone taking over the operation, provided their standard of life expectations are not too high, they should be ok. Problem nowadays is everyone wants to have the white collar lifestyle on a blue collar budget and all before they turn 25.
I look forward to sharing the COP numbers once they are tabulated.
|
|
|
Apr 1, 2023 | 07:58
114
15444
How many cows do you run? Where are you located approximately?
Your $78 k dollars for equipment would not buy a round baler now. Looking at the local used equipment sales flyer, used lower hour tractors of sufficient size to feed cattle seem to start at about $150K. I know a person who bought a used tractor and got about 30 hours of use from it before it threw a rod through the block. No fixing that. No warranty. A reality check.
I'm sorry to say that I think that the current review of Cost of Production is interesting, but has little real value. A person that is going to be entering the cattle business would have to develop costs based on current costs and values. What you and I do and have done would be of interest, but would not be the information needed to develop a business plan for someone entering the business.
If they look at the real, actual unfiltered historical numbers they won't be entering the cattle business.
The $1800 income from a 6 weight steer @$3.00/ pound. Which becomes a $1500 dollar average income when you sell your heifers. The holy grail $3.00 a pound steer, does not cover the costs for a startup cattle producer.
I have not seen the $3 dollar 6 weight steer income yet. The "big dollar" pay out could disappear before the fall sale of my calves, like it did in 2015.
|
|
