cattle price bubble... who's going to get caught?

29-01-2012 12:27PM #1

I just can't get over the price of cattle lately!
great if you've cattle to sell but I must say someone is going to loose a $hit load of money.

a chap was telling me that he is looking for black and white bullocks and was prepared to bid 350 with the weight for them but he can't get near them in the marts. surely that sort of money is continental prices for black and whites!

we don't normally buy in animals but I've been looking around this year for breeding stock to try and up our numbers with some tillage ground coming back online to grass. i bid 1050/hd for 4 maiden heifers avg weight of 415kg with SI and LM breeding which i thought was great money for them and i lost out on a bid for the sum of 1225e. Now these where good stock all out of AI but seriously!
Our new bull arrived on fri and I will put him with 9 of our own maiden heifers next weekend. would like to add a few more bought-in's to the group but at this sort of money i'd prefer to keep the money in my pocket.

current factory prices seem to be driving things atm too. while prices are good atm I cant see them staying up this high for the remainder of the year.

blue5000 · 29-01-2012 12:31PM

Hi OP, who is going to lose the most ppl who buy dear cattle or those of us who don't offload while prices are high?

What sort of bull did you buy?

29-01-2012 12:36PM

Hi blue
I bought a limmy out of wilodge vantastic.

i know its high time that cattlemen made some money but is just really worry that the current price trends is similar to the property price bubble

whelan1 · 29-01-2012 12:37PM

i think its time to sell whatever you can, sold 3 culls yesterday out of the yard -friesian cows- for 650 each... now they would need good feeding for a while to be killed...happy out i am happy to move anything while i can, cant see how people buying cattle at mad prices are going to make any money

Farmer Pudsey · 29-01-2012 05:35PM

whelan1 wrote: »

i think its time to sell whatever you can, sold 3 culls yesterday out of the yard -friesian cows- for 650 each... now they would need good feeding for a while to be killed...happy out i am happy to move anything while i can, cant see how people buying cattle at mad prices are going to make any money

Around what weight were they

whelan1 · 29-01-2012 05:38PM

lightest would be 500kg , heaviest over 600kg, bad feet:) need a good bit of feeding to be fit for factory

Farmer Pudsey · 29-01-2012 06:18PM

If they were not too old they put on 200kgs from now until August average 750 kgs they would kill 365 kgs @ 3.25???? they would be better value than yearling herefords

whelan1 · 29-01-2012 06:38PM

i just want rid, have 35 heifers coming in so am getting rid of some of the dolls i dont want, first time in years i could cull for small reasons:rolleyes:

irishh_bob · 29-01-2012 07:24PM

just because beef is in a bubble doesnt mean its ready to burst just yet , as hard to believe as things are , thier are logical reasons for the price and demand , thier are people who will inevitabley get burned but those who have the bottle to ride it out for a while will make good money , unless this EU crisis gets a whole lot worse in the next number of months , i dont see cattle collapsing for quite a while

maybe farmers should be less guilty about the good times , i realise its strange territory for them but they might aswell enjoy it

poor farmer · 29-01-2012 07:58PM

I am hearing that beef prices at the factory are back for the week coming.

Farmer Pudsey · 29-01-2012 08:24PM

whelan1 wrote: »

i just want rid, have 35 heifers coming in so am getting rid of some of the dolls i dont want, first time in years i could cull for small reasons:rolleyes:

I understand your point however I am just pointing that there are still cattle out there that will possibly make a profit. I think that even O&P cows will be that price and better in August .
However I also think that some of the prices for summer grazeing cattle are crazy 300kg WH Bullocks 750-800 euro even if you get them to 500kgs they will struggle to make 1000 in the September. It is now January a euro a day to feed until March17th (50 euro) 50 cent a day for grass 180 days (90 euro) Veterinary 10 euro, 2kgsd of ration for 6 weeks 20 euro, transport 20 euro, mart fees 20 euro. Total 210 euro. I cannot see any profit on some of the cattle being bought at present.

redzerologhlen · 29-01-2012 08:32PM

To be honest the way I look at it is that people that buy the same amount of cattle year in year out should be ok because the would have made their money on what they had bought the last couple of years, even if they didnt make anything on this years cattle it balances out if the had managed their funds any way right. Cattle are reported to be scarce worldwide so long may it live I say!! Breeding heifers do seem to be gone a bit out of reach though.

locky76 · 29-01-2012 08:35PM

Excellent brakdown of costs Pudsey,hard to see profit alright.
I hope it stays fine until i sell my 14 in June- 4 culls, 5 heifers and 5 bullocks :rolleyes:.

Farmer Pudsey wrote: »

I understand your point however I am just pointing that there are still cattle out there that will possibly make a profit. I think that even O&P cows will be that price and better in August .
However I also think that some of the prices for summer grazeing cattle are crazy 300kg WH Bullocks 750-800 euro even if you get them to 500kgs they will struggle to make 1000 in the September. It is now January a euro a day to feed until March17th (50 euro) 50 cent a day for grass 180 days (90 euro) Veterinary 10 euro, 2kgsd of ration for 6 weeks 20 euro, transport 20 euro, mart fees 20 euro. Total 210 euro. I cannot see any profit on some of the cattle being bought at present.

tismesoitis · 29-01-2012 08:50PM

49801 wrote: »

Hi blue
I bought a limmy out of wilodge vantastic.

i know its high time that cattlemen made some money but is just really worry that the current price trends is similar to the property price bubble

Vantastic is a class animal saw 5 straws of his sold in england for 425 pound sterling each:eek::eek: would'nt mind havin a pot full of him:D

I think the ones to loose out will be the finishers. but hopefully not too bad i reckon prices are up for the long haul with maybe slight up and downs. Rising populations and increased beef consumption coupled with less land available to agriculture(biofuel production) should maintain prices internationally.....I hope:rolleyes:

Farmer Pudsey · 29-01-2012 08:55PM

locky76 wrote: »

Excellent brakdown of costs Pudsey,hard to see profit alright.
I hope it stays fine until i sell my 14 in June- 4 culls, 5 heifers and 5 bullocks :rolleyes:.

If there finished cattle the factory price should hold at around a base of 4 euro and I cannot see them falling in the marts until October or November.

aidanki · 29-01-2012 08:57PM

tismesoitis wrote: »

Rising populations and increased beef consumption coupled with less land available to agriculture(biofuel production) should maintain prices internationally.....I hope:rolleyes:

lot of people hoping that, i think biofuel will make or break agri produce, the EU and US will implement policy such that biofuel regulates land supply for agri use according as food price rises and fall

Muckit · 29-01-2012 09:29PM

I think there's alot less beef cattle in the country in the last few years. IMO it's a combination of lads starting to kill cattle at an earlier age and also part time lads getting out of or cutting down on cow numbers.

IMO prices will stay at current levels for a good while to come. I may live to eat my words though :rolleyes:

locky76 · 29-01-2012 09:33PM

Excellent, they'll all be going to the factory then.
I'll get them out around paddy's day, keep fresh grass in front of them and finish them off with 6 weeks of 4kgs of meal per day, here's hoping...

Farmer Pudsey wrote: »

If there finished cattle the factory price should hold at around a base of 4 euro and I cannot see them falling in the marts until October or November.

Farmer Pudsey · 29-01-2012 09:43PM

locky76 wrote: »

Excellent, they'll all be going to the factory then.
I'll get them out around paddy's day, keep fresh grass in front of them and finish them off with 6 weeks of 4kgs of meal per day, here's hoping...

I read an article where it shows that feeding cattle 1-2 kgs on grass will get a return of 4-1 even on the best of grass I know all the advice about meals in spring etc 2kgs over 12 weeks I know it is extra work but??????

30-01-2012 08:28AM

tismesoitis wrote: »

Vantastic is a class animal saw 5 straws of his sold in england for 425 pound sterling each:eek::eek: would'nt mind havin a pot full of him:D

first dabble with limmy for us... never spent as much as this on a stock bull in the past but i think he was well bought.
i'd looked at a good few and even for 3 star bulls the asking was 2.5k
i paid a little more than that but no where near the 4.5k being asked for another 5star bull.
will be very interesting to see the sales report from the upcoming society sale in roscrea.

back on topic i think those that house cattle next autmn for killing out of the shed will loose money but those killing cattle up till mid sept should do ok before the price's get pulled. (this is from my crystal ball;))

Tora Bora · 30-01-2012 08:48AM

Why is everybody talking about curent price of cattle being a bubble?
In reality it's not a bubble, as this is where the prices should be and need to be at a minimun, considering cost of inputs, and stupid regulation of the industry.

I prefer to think that we have come out of the "inverted bubble" of the last ten years, into a more normal market, where the primary producer, has some chance to make a bit of profit.

The bubble is dead, long live the bubble:cool:

30-01-2012 09:27AM

Tora Bora wrote: »

Why is everybody talking about curent price of cattle being a bubble?
In reality it's not a bubble, as this is where the prices should be and need to be at a minimun, considering cost of inputs, and stupid regulation of the industry.

I prefer to think that we have come out of the "inverted bubble" of the last ten years, into a more normal market, where the primary producer, has some chance to make a bit of profit.

The bubble is dead, long live the bubble:cool:

I would agree with you that this is where the factory prices should be!
unfortunately this is driving big live prices too.

I know I am a cynic and a pessimiste but I just cant see the prices staying up this high and fellows loosing a fair few pound.

pakalasa · 30-01-2012 10:34AM

The start of a worrying trend;
http://www.donedeal.ie/for-sale/beefcattle/2950813

Will NAMA cover feedlots?

bob charles · 30-01-2012 11:28AM

pakalasa wrote: »

The start of a worrying trend;
http://www.donedeal.ie/for-sale/beefcattle/2950813

Will NAMA cover feedlots?

They may not be in trouble but trying to raise finance elsewhere. I have being thinking about taking this road myself and try and attain some venture capital and then use such to leverage. Banks are a dead duck in my eyes and not willing to lend the amount of money needed to keep a large cattle enterprise financed. Im sure such is taking place in the industry as we speak (just look at the huge dairies being set up in parts of the country). To run a fattening enterprise of any size nowadays requires a least half a million capital just as a float. Frightening

pakalasa · 30-01-2012 01:21PM

Feedlots are,by their nature, high turnover, low margins with high risk. Nobody is going to lend you money unless you put up your own shirt, to some degree. Even a 10% drop in price, could see you in trouble.

bob charles · 30-01-2012 01:47PM

pakalasa wrote: »

Feedlots are,by their nature, high turnover, low margins with high risk. Nobody is going to lend you money unless you put up your own shirt, to some degree. Even a 10% drop in price, could see you in trouble.

Banks not interested even if there is a large amount security available. I would think that their are many people with a large amount of money looking to invest at both a fixed rate and or profit share. Farming is sexy for some reason to be involved in at the moment so might as well take advantage of it. If you are looking to grow quick which many on here seem to be it one of the main options

30-01-2012 01:47PM

i thought many of the feed lots in the states operate on the basis that the owner/breeder retains ownership till slaughter and the lot charges a fixed cost per day.

lot is then only suceptable to market fluctuations in straights and not factory price

would such a model work here?

reilig · 30-01-2012 01:49PM

49801 wrote: »

I just can't get over the price of cattle lately!
great if you've cattle to sell but I must say someone is going to loose a $hit load of money.

a chap was telling me that he is looking for black and white bullocks and was prepared to bid 350 with the weight for them but he can't get near them in the marts. surely that sort of money is continental prices for black and whites!

we don't normally buy in animals but I've been looking around this year for breeding stock to try and up our numbers with some tillage ground coming back online to grass. i bid 1050/hd for 4 maiden heifers avg weight of 415kg with SI and LM breeding which i thought was great money for them and i lost out on a bid for the sum of 1225e. Now these where good stock all out of AI but seriously!
Our new bull arrived on fri and I will put him with 9 of our own maiden heifers next weekend. would like to add a few more bought-in's to the group but at this sort of money i'd prefer to keep the money in my pocket.

current factory prices seem to be driving things atm too. while prices are good atm I cant see them staying up this high for the remainder of the year.

Over an extended period, won't the whole thing balance out for a finisher.
Cattle prices are high now, so the cattle that the finisher bought 18 months ago that are currently being slaughtered are making big money? Can't he afford to invest big money into replacements for these finished cattle? Most finishers will calculate their profit by the amount got for the finished animal minus the cost of keeping the animal and the cost of replacing the animal. If the price that the finisher is to receive in the future decreases, then surely the price that he pays for replacement animals will be less too. The extra profit made in year 1 of high prices will cover his losses in the year of a big price drop.

The only people who this so called "price bubble" has a major impact are those who aren't buying to replace stock.

The majority of other people that are making noise about prices being too high are middle men who will still have the same profit as before but think that, because the primary producers, (mostly suckler farmers) have for 1 year, made a profit on their animals, they should be entitled to a bigger share of the pie.

€350 with the weight for black and white bullocks?? That guy wants to have his cake and eat it too. How does he expect the first owner of them to have any profit for keeping them that long.

On a further note. Has anyone noticed how easily that irish government has managed to pass a load of budget cuts in Agriculture in the last budget? No? Not many have. But we're going to receive less money in our REPS Cheques, Less money in our DA Cheques, we will have to pay higher tax. Those on Farm assist will receive less money. We will have to pay water charges. We will have to pay the household charge and the septic tank charge. We will also have higher motor tax for all vehicles and higher fuel charges.

4 years ago, cuts that weren't half of this level brought Dublin to a standstill with tractor blockades and farmer marches. The fact that most farmers actually made a profit in 2011 means that they're willing to take the impact of these cuts or that they simply haven't noticed them in their pocket.

I just hope that farmers realise what they have taken on by accepting the cuts. I hope that when the time comes that factories try to artifically burst the price bubble (you can be sure that they will) that farmers will hold strong and demand that they be paid properly. Because if beef prices were to go back to what they were 2 years ago, combined with the above cuts in the agricultural budget and increases in tax and farm inputs, there will be a lot of people on the breadline!!!

bob charles · 30-01-2012 04:07PM

49801 wrote: »

i thought many of the feed lots in the states operate on the basis that the owner/breeder retains ownership till slaughter and the lot charges a fixed cost per day.

lot is then only suceptable to market fluctuations in straights and not factory price

would such a model work here?

No, factories have damn all interested in carrying any of the liability

gbee · 30-01-2012 04:15PM

49801 wrote: »

while prices are good atm I cant see them staying up this high for the remainder of the year.

No, two weeks ago Farm Talk on some radio station was saying how there was a shortage of cattle and sellers should hold out for a good price, factories were short some 3,000 head, but the gap would be short lived as orders would be filled abroad.

We are in a weather bubble which has just burst and the fear is disease in the coming months from too mild a winter.

So it's at least a two pronged bubble with potential losses from both causes.

JohnBoy · 30-01-2012 04:31PM

reilig wrote: »

On a further note. Has anyone noticed how easily that irish government has managed to pass a load of budget cuts in Agriculture in the last budget? No? Not many have. But we're going to receive less money in our REPS Cheques, Less money in our DA Cheques, we will have to pay higher tax. Those on Farm assist will receive less money. We will have to pay water charges. We will have to pay the household charge and the septic tank charge. We will also have higher motor tax for all vehicles and higher fuel charges.

Have to disagree there. You've got three ag support schemes that were cut, but everyone will have to pay higher taxes, water charges, motor taxes, fuel bills and the household charge. Every rural house will have to pay the septic tank charge, so maybe it's a 50/50 one.

In a time when the country is financially crippled, and farming is doing well (even if it's only a blip) it would do farmers little good to go kicking up too much of a stink over reductions in support payments.

cattle price bubble... who's going to get caught?

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