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marketeye
Veteran Advisor

Drought destroys U.S. South cattle picture

VIDEO: With some cattle groups saying the drought could change cattle raising in the South for years, at least one market analyst agrees the affects are piling up.

 

I conducted an interview from the floor of the CME Group with this livestock/meat analyst on this topic.

 

Watch here.

 

Mike

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9 Replies
rightone
Senior Contributor

Re: Drought / No youth in the industry is

a much larger long term decline effect in usa cattle as compared to any and all other factors.

 

The old style traditional cattle bus is 99% corporate now.

4 companies, own em all, feed em all, and export most of it.

(SAME thing happened in Brazil for a 5 year span bout a decade ago when they exported Most of the beef industry out of that country.)

 

Most corporate usa concentration is located in the S.

There are basically NO premium up programs for fat cattle in the SW usa processing plants ( much the opposite of the Northern plants most of which btw are owned by the same corporations ).

Most Southern operators are none the wiser thus have little choice but to either quit or cater to the corporates.

 

Luckily, the Northern tier of usa cattle is younger operators and they produce for higher end niche markets ( ussually bout $25 cwt over traditional type fat cattle prices ).  THAT is what has been the driver for higher feeder cattle prices the past 5 years.

 

Cattle bus really not about cattle or drouth or most any of the officialdum crap spun.

It's all about PEOPLE.  Once those folks lose interest for any and all reasons...well then it's over.  

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nwobcw
Advisor

Re: Drought / No youth in the industry is

   What concerns me is the fact the auction buyers here want them fat fat fat.  What I consider overweight from my experience of having overfat butchered  cattle for my own use. 

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jrsiajdranch
Veteran Advisor

Re: Drought / No youth in the industry is

Mark your right it is about people. Around here why would people go out and work their tale off 365 for 10 bucks ahead profit when they can sit on their favorite tractor seat and make 200+ an acre? 

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rightone
Senior Contributor

Re: jr, long term tech indicates

we can grow crops and convert em WITHOUT the livestock in some of the major crop areas of countries like the usa.

 

That of course opens a higher profit opportunity for fringe areas which are actually expanding sheep and cattle numbers in other regions. ( sw usa, mexico etc ).

 

Another factor is the total econ of individual enterprize. 

In the sw usa and mexico, there's more profit in elk, deer, antelope hunting and trout fishing than there is livestock.

Livestock is thus more of a profit complimentary enterprize vs a main profit enterprize.

 

Heck there's more economy and fun rodeoing than there is running so many cattle that messes up the time needed to rodeo year around.

 

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k-289
Senior Advisor

Re: jr, long term tech indicates

Maybe the corperate industry shouldn't have starved the cow calf producer for so long---in Nebraska there is a study going on to arrive at a conculsion as to why the population is dropping in rural counties---rocket science? ?  

 

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djsinseia
Frequent Contributor

Re: jr, long term tech indicates

Someone told me once that cattle feeding was more of a disease than a business..........a fellow just gets all broke out with it and cant help but continue.

 

They are the lonliest people in the world when the lots are empty and the bunks aren't being used.

 

But cattlemen are resilient people and always seem to bounce back from overwhelming conditions......there doesn't seem to be a shortage of buyers in our part of the world.  Everyone wants those good black yearlings to feed this $7+ corn to!

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kbotard
Member

Re: Drought destroys U.S. South cattle picture

Very true, the auction rings have been packed for months.  People are selling out as the ponds have dried up and no hay made.

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k-289
Senior Advisor

Re: Drought destroys U.S. South cattle picture

Makes one  wonder  why the  beef checkoff  folks haven't  making this a top priority topic---keeping  the rancher in business and start with the 5 to 50 to 100 head producer which make up a sizable portion of the calves raised in the US ? ? 

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rightone
Senior Contributor

Re: Drought may be causing a counter seasonal

drop in non fed harvest numbers now.

 

Cow numbers as a percentage of the total harvest mix have been dropping of late.

 

End of Sept, cows ran 22% of the total mix ( 140,000 to 155,000 head per week in Sept ).

Afore normal is 17 to 18% of the total mix as cows.

Traditional type fed steers / hiefers been running 76% of the total mix ( normal is 80 to 82% ).

 

Auction reciepts in TX been off 30 to 50% the past 3 weeks ( means they're pretty well sold down now ).

 

Could have an approx 10% drop in total beef tonnage harvested in the usa now thru year end simply due to the fact most drouth cows that needed to go, are now gone.

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