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sw363535
Honored Advisor

feedyard Talk. 5/28---- Another "Holiday"- No work-no trailer

For the last 60 years I cannot count the number of times packers with their monopoly control of fat cattle prices, have dropped the cattle market to guarantee profits, blaming it on poor sales and cheap competition-- both of which might be the result of higher prices rather than the cause.

This time we ran corn into the $7 range on supply driven basis without comment from big box beef.  This time different??  World beef demand strong also??

Picked these facts from an article about May 2021 cattle placements in Feedlots.... (anyone placing cattle in lots in may knows the cost that's coming.  And maybe they know where far cattle prices are going??

May_2021_COF_Fig_2.png

"This 4.7% increase is a bit above analysts’ expectations of feedlot inventories increasing 3.9% from last year. This report marks the second-highest May inventory since the series began in 1996."

"Texas, Kansas and Nebraska led the way in total fed cattle numbers, accounting for nearly 8 million head, or approximately 68% of the total on-feed inventory in the country. All three posted year-over-year increases, ranging from 5% to 7% higher than in 2020."

 

"27.2% above 2020, placements in April came in above the average analyst expectation of a 22.5% increase."

 

With new crop speculation trying, to weigh in on the grain markets, I can relate my reluctance that we will raise an average crop in every grain, let alone records like we did when ethanol & Monsanto were driving the bus.  But I am avoiding that mistake again.  I think the cattle market and demand for meat is telling us more about demand this time.  

But this is the best looking house of cards I have seen for years and if congress succeeds to destroy the US overall economy-- the wind could come that would destroy it.  But if we get just half the stimulus money burning the fools are asking for...... we should have a roaring market for at least another year.

Driving around Ks I just don't see a healthy enough producer segment to desire to grow records just to get hammered again by the monopolies controlling COP.   It is a given Costs of production will go up..... we already woke that deamon.   We better hope this horse we are riding doesn't die of Covid 21.  A reality that answers prayers of some of our proud newly elected officials.

3 Replies
BA Deere
Honored Advisor

Re: feedyard Talk. 5/28---- Another "Holiday"- No work-no trailer

A $14 Ribeye is just the price of a couple 2x4`s kind of a bargain.

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k-289
Senior Advisor

Re: feedyard Talk. 5/28---- Another "Holiday"- No work-no trailer

+ +  +  +   Packer  Margins  +  +  +  +   -   what  rock  have  you  been  under ,  or  has  the  formulated  face ,  had  a  mask  on  before  Covid  -  ? 

Want  to  humble  a  politician ,  mention  the  words ''' Product  Of  U S A '''  ,  or ''' Import  Container  Vessels  Count '''  at  Long  Beach  California -  -  -

Tariffs,   the  latest clever  tax  increase ,  being  another  hushed , un-mentioned  U S  consumer  burden ,  or  way  to  spell  backfire ,   to  the  so-called,  handwringing ,   deficit  chit  chat -  -  - 

$119.oo  cash  or $187.oo  in  the  beef  =  $14.oo  ribeye ,   being  a  elementary  mathematical  embarrassment  -  ?   

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k-289
Senior Advisor

Re: feedyard Talk. 5/28---- Another "Holiday"- No work-no trailer

SW ;  the  display tag  on  the  information  sheet ,  (  financial  outfit )  , sure  does  a  lot  of  TV  ads  in  search  of  a  customer  base  -  like  the  robot  interview  with  the  hayseed  one  -  -  -

If  that  being  the  case , the  robotic  number  count  makes  perfect  $en$e  -  -  -   

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