feedyard talk 1/12. 5:15 pm .......finally the obvious is agreed to

[sw363535]

I follow a guy I like from the old FCStone gang, Arlan Suderman and saw his voice today ......."I could go on and on about the shortfalls in CO, OK, Tx feedlots.  Trains need to work to keep the cattle fed this year."

It is like when you stand at the corner of time and several states, your toes hanging off the curb, and watch a terrible wreck. It takes time, this time,  14 months.  It trimmed 1/3 of the 2021 fall crops and by fall of 22 it destroyed so much production that 22 will go on record as one of the worst fall crops in at least 60 years.  Consecutive, 42 weeks, each having one day of 70+ mph winds and blowing (anything not tied down).  We present a witness in blacksand.  ......... Arlan's statement seems too concise and simple,     maybe a little vague ....... so within minutes today he tweeted again ........."I've talked of the 1 billion bushel shortfall in Corn, milo & feed wheat production in 2022 in the major feedlot states.  As such, shuttle trains are coming from east to west.  Today's data(usda's guess), shows Kansas corn stocks down 120 million,(Nebraska corn shortfall of 452 million bushels), Kansas milo short 92 million bushels, .  Texas and okla also very short.  That is 500 shuttle trains.".......  Arlan

They been running since harvest as they support  the near $2 positive basis in the sw.

This particular wreck seemed to take months to happen.  Problem is waiting for the first responders seems to takes longer.  We are still hanging our toes over the curb watching and appreciating that Arlen has joined us.  The cattle in that truck are still at risk and the grocery truck is on its side waiting for help to deliver.  We are all noticing the food ain't spoiling in this 60+mph cool air.......yet, but I am telling you this wreck is going to keep growing if we don't get some rain to water those cattle in that truck, soon. .....Barely can see the pileup in this dirty wind.  Sure to grow worse as these figures don't include the 2023 wheat crop that is guaranteed to be shorter than The one in 2022.  The next six months of cattle coming into the feedlot should be out there on that Oklahoma/texas wheat but are not and thus requiring additional feed which will need to come from the east.(or up the Mississippi .... which needs some water too.)

Somehow I don't see Brazil solving our problem and feeding china too.   Nothing, so far, signals any extensive price reduction in feed grains or soybeans either as the US ramps up production of bio diesel to kill those fossil fuels that provide 85+% of our energy to this day.  Beans have a lot of demand all their own(and china keeps buying ours)

It seems like a local wreck, but it has legs and the virus was a bust.  There is extreme weather around the world and lots of mouths to feed.  We are either waiting for the clean up crew or change in the weather..... Not much else we can do at this point but wait for a change.

[k-289]

500  unit  T's  - you  nailed  it -  👍 😂  ===

[k-289]

Also ,  evVry  day  the  same  ol'e  radio  script,  chatter  of  export's  -  export's  -  export's - rinse  repeat , rinse  repeat ===     

[rsbs]

my thought is that it is awful hard to export what you don't have.

I thought corn would flirt with $10 last summer, and maybe it got close in some grain deficient areas. I thought soybeans would go to $20, and $17 stalled them out.

Maybe the fact that grains never set new highs back then kept domestic demand high enough that this 2022 short crop ( not on my farms, but nationwide) will be the one that has to have a price explosion to trim demand enough to have a carryout come fall of 2023.

I would not want to be short on grains in America if any crop production problems develop. On the same token, I have a lot of obligations and will pull the trigger on my own 2022 production in a couple of weeks or so, once the market digests the latest numbers and has a two day limit up spike. Get your basis locked in, get your sell orders in, and be prepared to hit an overnight target and take the risk off of your inventory. Leave the risk management to the professionals, and let them have the ulcers.

[jeffpetersen197]

I partner with my brother on a small operation at Dalhart - it's rough in the Plains!! I mean terrible!!  Only the few 'monster water' places left really have produced.  We destocked our native country and turned our light water irrigated farm into cow feed to keep cows together hoping for a super 2023-24 of decent rain and $1,500 calves. 

There was only ONE single rain event above an inch all year.  Everybody trying to figure out how to survive on the 6-10in/yr that this weather pattern 'provides'.  The forage situation is DIRE.  Dryland wheat = zero. 

Central TX hasn't been fun but not near as bad as Panhandle areas. 

[lsc76cat]

Thanks for posting Jeff - great to hear from you and keep in touch.

Guys like you, sw and others that work to make it go in that country have alot to teach us.

[k-289]

I  would  hesitate  to  think  with  todays  livestock  operations  financial  pressure  of  feeding  $7  corn , much  less  $10  maze ,  agriculture  would  witness a  dramatic ''' chicken  flu  '''  clean  out  of  inventory's  - whether  it  be  beef , pork , poultry ,  and  dairy = = =

Gouging  your  customer  or  consumer  short  sighted  intellect  ,  eventually  has  a  domino  effect , of  cutting  back , with  markets  then  displaying  an  array  of  extremely  short  selling,  extended  cycles   = = =  

The  message  to  grocery  shopping  consumers , on  several  informational  outlets,  being  TIGHTEN  YOUR  WISH  LIST  at  the store ,  and  lighten  your  garbage  can  contents  of,   throw  it  away , while  leftovers  are  back  in  style === 

Feeding  $300 / ton  hay to  beef  cows  will  be  short  lived , as  herd liquidation  is  in  tsunami  mode currently ===    Grandpa  used  to  say ,  Careful  What  You  Wish  For = = =     

[sw363535]

I think a lot like rsbs.  Except, I think the corn market did its job this year, yes, basis says the futures markets should have reflected higher.  I think basis is not as high as it sounds....maybe it is only freight.  Where are we at when it takes $2+ to get grain to livestock?

But without the inflation on everything else, market prices would have solved our production problems this year and set us up for rebound in the next two years.  The drought stricken sw will bounce back with the weather, but this inflation and transportation costs are unsustainable.  This year we see problems we can't survive in many areas.  Met a guy this week who bought a new truck and lost a couple bearings and it is parked indefinitely.  It is not going to be long until that level of ineffectiveness is going to hit the grocery bill.  

No one told us when Clinton promoted world trade it would require a 50% increase in the cost of everything...... renewed every 15 years just so we can take the raw materials half way around the world to the cheapest labor market for manufacture with slave labor, so they can be shipped back around the world to where they are installed and delivered again another thousand+ miles.  I'm wearing a  cotton shirt that might have 18 to 24 thousand miles of freight on it. Because that cotton may well have come from my area.  How much cocaine does it take to think that is good for us.  I know the intent was to improve economies all around the world at the expense of ours, but I can't help but think we will have to become the worlds poorest society in order to be save a little freight.  

Side effects....... every drug has side effects....... Side effects are hitting us continually...... like product quality,  short supplies of everything, world punishment when disaster strikes anywhere in the world,  exploding costs...(the first 50 shirts I wore were made in our living room.  IMO This is not progress.... here or in Asia.  The poor American who made those shirts was well taken care of).   (another example a small dent in a cheap bumper of a ford truck made recently cost @ $3,500 to fix.. not for looks but so you can have those warnings when you get out of lane). https://www.youtube.com/watch?v=ZhObsMnipS8. 

Marketing wise I am not upset with our markets this year..... they may have reflected as they should.  If we just need to shuffle supply basis will be carrying the load but it is clear that our news agencies are nonfunctional for the midwest and commodities in particular.  Usda continues to be treated as factual, though they report.... as projections of probability they are required to provide congress for budgeting.  But our real fear should be around  the lack of stability economically in terms of our expenses and reliability of our assets and ever increasing tax burden.  This was as big a problem for our farm as loss of production in 2022.

[k-289]

The  sales  tax  exemption  on  our  equipment , is  always  a  conversation  piece  with  my  urban  folks ,  being  unavailable  on  their  drive  to  work  vehicle ===

I  would  hate  to  see  that become  a  political  conversation  to  be  put on  the  ballot  of  upcoming  elections === 

Moving  Cummins  Engine  works  to  China ,  was  vedddyy  interesting , although  with  retirement  of  boomers , are  choices  are  somewhat  limited = MAYBE ===  

[BA Deere]

Look at all the revenue these counties get from new and used vehicle sales.  They get a huge chunk on a new vehicle (6 or 7% on $50,000)  then it`s sold as used for $40,000 and they get another $2,000 + .  Maybe sold 4,5 more times finally sold as a $1,000 work/school car and the county gets their last fifty bucks.  But, if they didn`t do that, they`d just soak our property taxes more.  

If we did go to a consumption tax, taxing everything at time of sale, replacing income tax, that would be great.  This income tax is bull crap!  I haven`t gotten any 1099`s yet, but it looks like Uncle Sam is gonna clean out both checkbooks and I`ll probably have to visit the banker for the first time in a couple years.   At least a consumption tax, there`s no wasting time figuring, you pay when you buy stuff and it`s in your rearview mirror.  Not knocks at the door.   

Oh great, now I`m in a bad mood!  😖