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Veteran Advisor

From the parlor pit 12-29

DO you know which country has the largest dairy herd in the world?

 

The analogies that have been applied to the dairy industry ion the last three years have run the gammit from the most extreme to the truly foolish but the analogy that may fit us well now is this one that I recently read but I can't find the source.  "At the Niagara river just before the falls on the New York side there is a sign. It says after this point your on your own! (or a variation of that theme) That is where we are in the Dairy industry.  I think it is a good thing.  The recent congress has solidified the joint venture between Gov. and grain. The theory being as long as there is grain there is feed stocks for animal Ag. IT has also proven that it in the coming years that funding cuts will be hard fought so in the end they will be across the board. that means cuts to nutrition programs which will negatively impact consumers demand.  There will be little to No assistance to Livestock from Gov. in the future. Again from my perspective this is a good thing. 

SO how is leadership going to address the issues going forward?

They won't! again a good thing. Dairy man will need to be self reliant like never before.  And I think there is some glimmers that we are.

 

Today we can look back on solid numbers from Nov. slaughter.  They are historic. 

Culling activity remains heavy. Last month dairymen sent 241,200 cows to slaughter, up
15.5% from a year ago, and the most for November since 1997, says USDA. In the first half
of December, the slaughter rate was running about 14% higher than last year.

 

This Quote is from The CME's daily report.  Did you read that guys?  The rationing is beginning!   Largest Nov. cull in 13 years!  and Dec. is on the same pace.  All this at a time when beef prices for cull cattle are at the high end of marketing price ranges!  Folks the worm is turning!  The unfortunate thing is that as we turn we are setting ourselves up for a food shortage that no one is talking about.  We will have a lot of corn and beans but we will not have food for folks.  Why?  Chickens can be turned around very quickly. approximately 6 months and you can have broiler placements up substantially .

Hogs are the farm animal with the next fastest life cycle but still to get gilt retention (which isn't occurring yet) to increase there must be profit for the producer.  and then from the time the gilt is retained until her litter becomes a viable feed consumer is a year.  And it's 18 months roughly before e her offspring takes up shackle space. 


Obviously beef and Dairy are going to share the same life cycle however they Have to entirely different production cycles.

The beef herd may take 5 or more years to begin to rebuild and then only after a very severe drop in placements do to heifer retention,  Recently our slaughter numbers showed that 43% of the slaughter was heifers.  That folks is a heck of a lot of heifers that will never produce offspring. and while summer pasture and cheap hay seemed to point to heifer retention of the 10 calf crop.  The high priced feeder mkt. allowed many ranchers to sell all of that calf crop for a nice profit and make up for two years of red ink.

The dairy cycle is much different.  Sexed semen has in the past caused a glut of heifers. that glut has been worked thru.  And many have stayed away from the technology. as it is expensive.  Now we have worked thru that glut our heifer numbers seem to be more in line with historic figures. so while our cow herd at 9.1 million hasn't really changed in three years our heifer herd has begun decline (those numbers will be available after the first of the year) This translates into a smaller milk cow herd in the future. 

Jan. will be an interesting month.  We will be coming in off of two months of record high cow slaughter and for the first time in months we will not have a year over year milk production increase. Most of 10's numbers were compared to 09's horrible production.  Now 11's production will have to be compared to 10's number at a time when feed prices are much higher than they were just 12 months ago. 

While the price we receive in Jan for our milk will be poor the board should start to rally on  get this Supply concerns!  That has been a long time coming but I think that is what we will start to hear.  The demand side has strength and I think we can and will continue to see reduction in the cow herd.

Just like the guy who floated down the river towards Niagara falls one things for certain it should be interesting!

 

Oh BTW tune in later for the answer to the question.  And Grain guys the price is high enough already to ration grain consumption. BE Safe. JR


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16 Replies
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Contributor

Re: From the parlor pit 12-29

Isn't something off the wall like India? Why the suspense?

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Veteran Contributor

Re: From the parlor pit 12-29

Saudi Arabia

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Veteran Contributor

Re: From the parlor pit 12-29

JR, likely India or Brazil.

Largest cattle ( beef and dairy ) congress ( shows, sales, seedstock deals etc ) on the globe is in Brazil every Spring ( called Indo Zebu or the like )

LOTs of dairy type Brahma cattle there ( highest numbers of dairy cows on the globe are in fact Brahma dairy cows ).

In the usa...the writing is on the wall.

Some ( likely MOST of em are done ) of the smaller dairies will simply quit dairy, Then in fact switch to drylot / small pasture turnout BEEF cow herds.
Alot more profit in beef...alot less work. That simple.

I think you'll see a very DEFINITE move towards the afore this year in say E Iowa, Minn, Wisc etc
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Senior Contributor

Re: From the parlor pit 12-29

This is sad but more than likely true.  At one time, there were a lot of guys in my county that had hogs.  There hasn't been one single hog born in the county for over three years.  I'm afraid the dairy industry is in the same boat.  Having said this, it's of little wonder some economists are telling people to stock the freezers and food pantries as the future could get bad.  The food versus fuel debate hasn't even begun as far as I'm concerned.  Bush Jr. may very well through history end up being labelled the worst president in U.S. history, but it won't be because of the economy or the wars.  It will be because of his aggressive biofuels agenda. 

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Veteran Contributor

Re: From the parlor pit 12-29

If Biofuels are so bad, then why is Brazil's economy booming?  Their unemployment rate is nearing half of the US.

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Senior Contributor

Re: From the parlor pit 12-29

Unless the U.S. starts tearing down cities for agriculture, we can't compete with Brazil.  Brazil was once selling quite a bit of ethanol to Europe.  Now, Europe is coming to the U.S. because of high sugar prices.  Brazil is comparable to the U.S. 60 years ago, but isn't so comparable to the U.S. now.  I read an article the other day with regards to Brazil's unemployment.  According to the article, there are areas of Brazil where there are shortages of workers.  It's pretty easy to see what happens next.  The workers demand higher pay, and eventually Brazil goes down the same path as the U.S.  The country kicking everyones tail right now suspended their biofuels program two years ago.  What does this say about biofuels?  If biofuels are the answer to fossil fuels, then we'd better start diminishing populations in huge proportions.

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Frequent Contributor

Re: From the parlor pit 12-29

Well Gored, I would say you are pretty close on your last statement.  There is a chapter of a negative population growth society in Lincoln, maybe one should go listen to what they are up to.  Isn't most of Europe in neg. pop growth.  As for the dairy herds, the proof is in the pudding, now the only guess is what is coming.  Maybe they want us all drinking goat milk.   I heard gov't. Heineman say the other day that HSUS will get a fight like they have never seen, except we will be on the losing end.  Since nobody would listen, these guys have positioned themselves and are very well funded, long before ag new what was going on.  This is a unicameral, so it won't take long.  If farmers won't put up money to save irrigating water,  why would they fight HSUS?  On another note, are they putting "test" wells down into the aquifer under feedlots in your area, they are here.

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Senior Contributor

Re: From the parlor pit 12-29

I'm not sure about Europe, but I do know the #1 baby name in I believe England in 2009 was Mohammad.  The U.S. would have negative population growth if we didn't have to count the illegal alien births.  HSUS wants all animals let out to pasture as they claim a cow or whatever eating free range is a happy cow or whatever.  Heineman seems to follow his tail at times.  I still remember a speech he gave three or so years ago preaching about how great biofuels and such were for the state.  Then, someone mentioned sacrificing the #1 industry in Nebraska for ethanol.  He switched gears in a hurry.  As far as HSUS goes, does it really matter when the EPA gets done with their carbon tax?  It's funny you bring up irrigation.  It's of no surprise we here in SW Nebraska are in water trouble especially with regards to Kansas compliance.  We need to retire acres.  We had a funding mechanism to retire acres until a group of  so called farmers banded together and got it declared unconstitutional.  I guess the moral of the story here is:  let's all go down in flames.  We've always had test wells close to feedlots that are tested twice annually for nitrates.  As long as the feedlot is active, there's never been a problem.  There's been a lot higher nitrate levels found in sandy soils where guys used to put on way too much fertilizer via anydrous that's found to be the problem.  Some of these pivots have 25+ ppm nitrate.  At the end of the day, I'm a lot more worried about the EPA's carbon tax and how this affects irrigation.  We know we're going lose water allocation, but the hope is that technology via drought tolerant corn will save us. 

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Frequent Contributor

Re: From the parlor pit 12-29

Lets all go down in flames together, well that sounds about right.  You know, if farming was a 100 piece chess set, what are we doing, trying to defend all 100 weakly, or defend 80 strongly?  anyhow it is not good.  First of all we have a farmer vs. farmer problem, cattle vs. corn guys, irrigators vs. irrigators, etc. etc.   The outside special int. groups must be laughing uncontrollably...   I have mentioned before, but I will say it again...   I was in D.C. in Feb. for the corn growers.  I brought up these groups and certain films that were going around, one was Food Inc.  I asked if anyone had seen it, nope.  I expected that answer from farmers, but the guys that are suppose to be up there defending us?   What are they doing with all our checkoff dollars?  The movie came out in 2008 and no one had seen it in feb. 2010, that is disturbing.  How far are we behind the eightball?  way behind.  So here is their site.  www.foodincmovie.com   Every farmer should watch this, and then wonder, that wasn't that bad, or was it.    The livestock industry should shudder about labeling, not by the FDA or USDA but private labeling by corporations whom are already alligned with the other side.  http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20101221/NEWS0107/12210332/1159&nav_category=   This particular article has been all over.  But imagine if Whole Foods will only sell a 4 or 5 star meat, the stars given by their definition.   Most meat here wouldn't even qualify.  So how long before the snowball goes and Wal Mart says, we don't want to look like we sell junk meat, we are swithing also.   Anyhow it is death by 1000 cuts.  I figure someday I will be using my well water to fill Dasani bottles, might be easier work.

 

p.s.  as an aside you might have to work with the link or just google  Whole Foods, Safeway, labeling meats and you will find the article.

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