cattle price futures

[john in la]

While reading the thread about twin calves I noticed how people were showing how much calves have gone up in the U.S. as compared to Canada.

I suspect that our borders are still closed to imported cows and hanging beef causing the great difference between our prices and Canada prices for cows and calves.

The other thing I contribute to rising cow prices is the fact that corn has gone up so much in the past few months. Even with the expected increase in acres planted this year corn prices are expected to stay high because the increase in yield will most likely all go to ethanol production.

While I like the idea that the U.S. has tried to find a new fuel source in ethanol; I also believe we do not have enough acres to grow that much corn. We have now tied the price of fuel more closely to the price of food and I worry about the road we are on.

I sit here and wonder how high U.S. cattle prices will go considering their feed is going to produce fuel and the fact that we are trying hard to keep out Mad Cow.

Your thoughts??????????

[Up North]

John - This brief article appeared in the March, 2007 issue of GRAZE publication. QUOTE:

"A University of Missouri agricultural economist expects U.S. cattle, swine, and poultry inventories to shrink because of higher grain prices, resulting in higher retail prices.
"I would argue that ethanol and inflation will raise the prices for meat, eggs, milk, cheese, and other dairy products around 12% by 2009," said Ron Plain. "I don't expect consumers to reduce meat and dairy consumption much because of the increase, however." ..."The real winners are the owners of land that can grow corn because land values will continue to increase," Plain said.
END QUOTE.

My thoughts are that short-term cattle prices will soften as cattle feeders will reduce the amount they will pay for incoming cattle to offset higher feed costs and still maintain a margin. Long term prices should maintain reasonable strength due to factors reflected in the above article.
Yet weather scares, disease, droughts, worldwide demand can create volatile change on short notice. It could be a wild ride.

[arcticow]

What I want to know (RE:ethanol) is when taxpayers are gonna tire of paying for ADM to set up the gov't to allow them to profit from these schemes to an extent that even Big Oil is not allowed. Either way, eth. or biodeisel ADM is the only real winner. As for keeping OUT Mad Cow, 'scuse me, but it has already BEEN here. I realize AK is the tail on the dog, but our only viable option for replacements for ruminants IS Canada. We don't export any live animals, so let US import, WE need new stock here BAD!!!

[travlnusa]

Sen. Chuck Grassley announced this past week he sees the end of high corn prices coming. The result of non-corn products coming online. Grassley is from Iowa.

[HazyDay]

Originally Posted by arcticow

As for keeping OUT Mad Cow, 'scuse me, but it has already BEEN here. I realize AK is the tail on the dog, but our only viable option for replacements for ruminants IS Canada. We don't export any live animals, so let US import, WE need new stock here BAD!!!

Ok, we can make a deal! 80.00 a heifer calf, but you have ot put it in a trunk of a car and drive a cross the border! Kidding!! I argee we should let animals come in. I very badly want to go and buy some nubians from Maine!!!! I think as soon as the border opens we ship all the claves in that we can! Stupied govenment stopping me from getting more goats!!! Now a goat kid could be put in a cat carrier and brouht in illlegally but Im not risking going to jail! Come on im only 15!!!!!!

[arcticow]

Hazy, if I thought I could keep 'em out of bogs & bears, Ive been tempted to walk a mixed herd across the border by the Yukon Quest route!!LOL! I'm not too young, too old, maybe! But seriously, there should be SOME way to come to terms, Oh Great Gov't. Leaders.

[kgchis]

Originally Posted by Up North

My thoughts are that short-term cattle prices will soften as cattle feeders will reduce the amount they will pay for incoming cattle to offset higher feed costs and still maintain a margin. Long term prices should maintain reasonable strength due to factors reflected in the above article.
Yet weather scares, disease, droughts, worldwide demand can create volatile change on short notice. It could be a wild ride.

I agree. I think the corn prices are actually pushing cattle prices down. Our local Farmweek segment said corn and exports to Mexico were currently pushing prices down. Corn because like you said buyers are looking to offset their feed prices. Exports to Mexico are down as well. I think this is also related to the price of corn. Their diet to so closely tied to the corn tortilla the price of corn is not allowing them to buy as much beef as they have in the past.

I think that prices are up slightly because of the over selling of cattle that took place during last year's drought. Also, the blizzards in the mid-west hurt their inventory this year. We are seeing lots of our calves and cows heading to the west as they try and restock. Usually we just see our calves heading our west to the feed lots, but this year they are buying thousands of breeding age cows to replace what they lost.

I think in the long run though you may see even higher prices next year. If inventories keep declining like they have been for the last year or so, then simple supply and demand will kick in and push prices higher.

I also think the corn market will correct itself. I know in MS I have seen more corn planted this year than ever. In fact, 50% of our corn crop is planted early. Plus lots of industries use corn products such as corn fructose and corn syrup who have other alternatives. If prices don't come down, I expect them to leave the corn market and use substitutes. For example, Coca Cola announced they were considering moving from corn fructose in their products to cheaper substitutes. Moves like this would obviously free up more of the corn supply for alternative fuels and feed.