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Frequent Contributor
ne 50
Posts: 64
Registered: ‎05-18-2010
0

White Flag time?

many of my neighbors are asking when does the white flag come out for the local endusers... I mention it may take awhile... just as we have set floors on the way up they should have bought corn on the way up ( speaking of ethanol and cattle feeders here) if they didn't this report should separate 'managers' from speculators... ie. the men from the boys...many had until 45 days ago to buy corn at lower 5.00 numbers ... so if they did get 50 to 60 percent bought at that price the rest at 8.00 or more gets them to a 6.50 to 7.00 average ... looks pretty good right now for a average... it's next year that bothers the hell outa me.... your thoughts .....

Veteran Advisor
roarintiger1
Posts: 1,500
Registered: ‎04-29-2011
0

Re: White Flag time?

Just like the grain farmers from the 80s & 90s.......those livestock farmers that survive are gonna be rewarded.  But......look how long it took for the grain farmers!

"Failing to prepare is preparing to fail." "Success happens when preparation meets opportunity"
Senior Contributor
jec22
Posts: 410
Registered: ‎06-03-2010
0

Re: White Flag time?

If you have a crop and/or insurance, this is gold medal time.  I really don't know how at these prices you can call it anything but a homerun for a grain farmer.  Now, if that isn't good enough, and you need a grandslam....can't help  you there.

 

Even the superbull like myself will soon hold no 2011 crop any more.   Have no idea what the next few years bring.

 

 

So. IA
Esteemed Advisor
sw363535
Posts: 4,245
Registered: ‎07-18-2011
0

Re: White Flag time?

Even feeders will be using grain priced last spring for a while yet.  Not much usage is priced in the july-august months and delivered immediately.

sw
Veteran Contributor
ag678
Posts: 78
Registered: ‎05-13-2010
0

Re: White Flag time?

I don't know how much corn the enduser has bought up but I don't think their were any great margin opportunities with 5.00 corn.  For the cattle feeder if you bought feeders and your corn you wouldn't be in much different shape then if you didn't buy feeders and didn't buy corn, margins to lock in have not got much better or worse since may.  I don't think the ethanol plants had much opportunity either, I actually don't think the margins they can lock in today are that much worse then a couple months ago, and we all learned what happened when ethanol producers ran their business like farmers instead of like processors it was simply too much risk and they can't buy corn without selling ethanol.  I'm guessing some of the vertically integrated livestock guys locked in a little feed but as fast as the rally happened it was probably hard to keep up. 

If you are not vertically integrated and you did buy alot of corn, and you are faced with running it through cattle or an ethanol plant at less profit then if you just sold it back to the market at what point do you resell it to the market.  If you were a farmer feeder today would you rather sell for 8.00 and haul it town or would you put it through cattle get 7.00 and have to do chores everyday.

Veteran Advisor
Palouser
Posts: 2,121
Registered: ‎05-13-2010
0

Re: White Flag time?

Those in the business of feeding or ethanol will continue. You don't halt operations for a temporary margin if you're making a profit - or even if you're losing a marginal amount. You lose employees and equipment sits unattended and may or may not be w/o cost to start up again.