In case you missed it...

You need to read this article: Now Serving One Billion.

Make sure you don't just read it...READ it and think about how it will effect you. Try not to think about tomorrow or next year, think 5, 10, 20 years down the road. What do you think this means for beef prices? Corn prices? Land prices? It's clear to me that the main driver of this train is the country with 4 times the number of people as the US with incomes rising at 4 times the rate of ours.

Beef Magazine June 2011

Harlan Hughes has an interesting article in this months Beef. He calculates feedlot gains (at $6.77 corn) to cost $.83 for the feed ALONE. I've talked before about how if you are a grass producer, you should love high corn prices. Well, if feedlot gains are costing $.83 just for the feed, than stocker operators should be getting close to $1.00 per pound to grow calves. Even at $.80 there's great money to be made in stockers. It makes Steve Kay's statement in his article in the back seem even more stupid. "The industry is seeing progress...on the industry's fight to end support for the ethanol industry." Hate to break it to you, but this is not good for those of us selling grass (through our production of beef). Let's see, we've had ethanol subsidies for the past several years while at the same time we've had some of the highest prices for beef we've ever seen. Hmmmm. Ethanol subsidies have increased the value (and price) of corn, which has increased the value of our grass....what's not to like about this? I can live with getting $.80 for the value of gain. As long as grass is a substitute for corn, why do we want corn prices to fall?

Cattle prices, cows, stockers and the future

There are a lot of cow calf producers that think they are in the cat bird's seat given current calf prices. It is indeed a good time to be in the cow/calf business. But I would suggest that this situation will change. The reason calf prices are so high is because there is a glut of feedlot space in the market. Feedlots have very high fixed costs given the enormous capital requirements of pen space and feed production. Business econ 101 tells us businesses will (in the short term) run at a loss so long as they can cover their variable costs....in other words they will LOSE money so long as the money they are losing is equal to the cost of NOT feeding a single animal. Obviously they can't do this in the long run. In the long run, the most inefficient businesses will go out of business until the remaining businesses can earn a profit. This is what will happen in the feedlot industry. To summarize: Feedlots are overpaying for cattle so that they can keep their feedlots operating to a point where they can cover their variable costs. They are all likely losing money. This won't continue forever. Once some capacity gets taken out of the market, feedlots will start to pay prices for cattle that will get them back to profitability. Given the high price of gain, prices will be much lower for 500# calves than for 800# calves. As long as stocker operators are dumb enough to price their grass gain at a significant discount to the cost of feedlot gain, the feedlots will buy only heavier cattle and the cow calf producer will continue to be the winner. Once stocker operators realize that they can price their grass gain commensurate with feedlot costs of gain, calf prices will feel downward pressure and the stocker operators will be the winners. How long will this take? I have no idea. I hope not long since we are moving to stockers. I will say that if you know someone who is still charging 50 cents per pound for gains, load them up with calves!

Wintering Early Weaned Calves at Mickey's

We early weaned 172 head of calves in October and hauled them to Mickeys. They had an average weight of 328 lbs. We moved them back to the Goat Ranch on April 20, and they had an average weight of 444 lbs, for an adg over the 180 days of .64 lbs...awful. We supplemented some ddg (guessing 2-3 lbs per day) and lost 4 head (we hauled 168 head back to the Goat Ranch)...a 2.3% death loss. Awful. I'm not sure why we can't get better gains, but this is discouraging considering we are moving to a stocker program that will utilize stockpiled forage for the first couple of months. I'm hoping poor genetics (all calves were first calf heifers calves) and poor grass at Mickeys were to blame. I'm still hoping we can get 1.5 lbs adg in our stocker program....we'll be finding out soon enough.

Rotational Grazing

So this year we are moving to stockers this fall. This spring we have only 400 or so stockers and a few hundered cull cows in two different groups at the goat ranch. We are going for maximum gain since we will be selling everything in 30 days or so and then not restocking until next February...so the grass will have plenty of time for regrowth. To get maximum gain, we are rotating the stockers thru large pastures every three days. The grass at the goat ranch this year is awful. It's better than the neighbors, but the undergrowth is only 4-5 inches tall. Two years ago when I mob grazed the stockers, I could barely drive the four wheeler thru the grass. We had at least 12 inches of undergrowth. I went back and looked at pictures from 2009 when we mob grazed and the grass we had was unreal. Although we mob grazed the cows last year, I don't think we did nearly as good a job as we did in 2009. I'm excited to go back to mob grazing a group of stockers. Our grass production was at least 50-60% better.

Very Good Article...

I found this article to be very interesting...anyone in agriculture should spend the time to read it. As we continue to use crop land for the production of energy instead of the production of food, and as China continues to demand more and more resources, commodity prices will continue to increase. Now would be a good time to execute long term leases on the land that you are leasing.

This is why I'm so disappointed about our conception rate

This article explains that BCS at calving is the key to rebreed rates. And I know our cattle were in good shape at calving and didn't lose much condition between calving and rebreed.