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Post by Dave-ECIA on Aug 1, 2012 9:21:34 GMT -5
I think it's the "damn the torpedo, full-speed ahead" attitude from some livestock producers. Manage your business, don't just do the work, use your brain.
This year, most grain producers are facing the worst year in recent history. It's a game-changer. With the writing on the wall, livestock guys that need to buy grain had the chance to lock in lower prices, if they didn't, that was a management decision that they should learn from.
I sold a small % at $5.65. It should have been 25-30% of my expected production. Now that % now looks like 2/3 of what I'll produce. Am I whining? No. I bought those bushels back on paper when I saw the drought deepening and am now holding a nice gain. Someone on the other end will get corn for $5.65 when the market price here is in the mid $8 range. Could have been a livestock guy just as easy as the river terminal.
The risk management tools are there for our use. If you don't use them, well, suffer the consequences. Hedge your inputs, contract instead of buying on the open market as you need it.
This isn't a game anymore.
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Post by 420 on Aug 1, 2012 9:49:37 GMT -5
A slightly different take. This is a copy and paste.
We will have a 10 billion bushel corn crop and a 2 billion bushel bean crop. Supply and demand are always about the same number. It has to be that way or physical shortages would pop up. Demand for soybeans is gonna fall 50% to avoid a shortage. 50% of all hog production must stop. A year from now half of all the hog barns must be empty because half of all the bean crushers will be idle.
This country produced a bubble of meat. The meat production business model was predicated on sub-market grains from the LDP era and spawned a complete excess in production. The result was the school janitor could afford an occasional steak. This model is crazy and is unsustainable in the natural world.
Worldwide the number one consumed red meat in the world is...... goat. Goats produce the most meat per crappy acre. (or also good acre I suspect) The school janitor will eat goat if he eats any meat at all. That's the way it's gonna be.
Meanwhile the aquaculture industry is done for just like hogs. Without bean meal the aquaculture thing is DOA. The wild fish catch has been plummeting for years while the pen raised fish made up the shortfall.
Unless it rains somewhere besides a select few places the next 2 weeks, the world is going to observe the hardest fastest fall in living standards in the history of mankind sometime next year. Whoever wins the election might want to demand a recount.
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$8 corn
Aug 1, 2012 14:05:48 GMT -5
Post by cousinit on Aug 1, 2012 14:05:48 GMT -5
Dave, there was never a time for a dairyman to lock in a profit. $5 or $6 corn does not lock in a profit when milk prices were still in the mid-teens at that time. We thought we did good when we locked in $6 old crop corn and we are not making money doing that. We are breaking even is all. If that's all we can do is try to breakeven, we will sell the cows. And try our hand at grain farming. Looks pretty easy: Put in crop. Buy 85% insurance and have taxpayer pay about half the bill. Get good weather, sell big crop for big $$. Get bad weather, disk crop under and collect big check. Win-win. Do that a few years until there are no more buyers. Whine.
July’s shocking milk-feed ratio Tom Quaife, Editor, Dairy Herd Network | Updated: July 31, 2012 No one ¯ even in the darkest days of 2009 ¯ ever imagined the milk-feed ratio going this low.
On Tuesday, the U.S. Department of Agriculture announced a preliminary milk-feed ratio of 1.29 for July. That was down significantly from June’s ratio of 1.38.
None of the milk-feed ratios on record, going back to 1985, have been this low. The lowest ratio recorded in 2009 was 1.45.
July’s number reflects escalating corn and soybean prices.
The corn price jumped almost $1 from June ¯ $6.37 per bushel to $7.36. The soybean price jumped even more from $13.90 per bushel in June to $15.60.
Alfalfa hay dropped $3 per ton to $198.
The all-milk price used by the USDA in calculating the ratio increased from $16.20 per hundredweight in June to $16.60 in July.
The milk-feed ratio is a rough measure of dairy profitability.
The milk-feed ratio represents the pounds of 16-percent mixed dairy feed equal in value to 1 pound of whole milk. Therefore, with a 1.29 ratio in July, a dairy producer could buy 1.29 pounds of feed for every 1 pound of milk sold.
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ogden
Hired Hand
Posts: 244
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$8 corn
Aug 1, 2012 17:19:39 GMT -5
Post by ogden on Aug 1, 2012 17:19:39 GMT -5
I have a friend that owns a dairy and he said he was making decent money with milk in the mid teens and corn at 6 dollars. What kind of profit do you think you should be making ?
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$8 corn
Aug 1, 2012 17:38:32 GMT -5
Post by cousinit on Aug 1, 2012 17:38:32 GMT -5
Depends on what you call decent I guess. Also depends on his circumstances. What is his rate of return on equity? He didn't read the milk/feed ratio article that said he is going backwards, and doesn't even know it.
I certainly don't need to come on this site and get slammed every damn day for apparently not knowing how to run a dairy farm, according to the evil corn growers, even though my husband and I have been doing it since '83. Corn growers have enough time on their hands........humm......if dairying was so easy and financially rewarding, why don't more corn growers quit growing corn and go into dairy?
I have seen dairy guys get out and become corn growers, but damned if I can ever think of a corn grower becoming a dairyman. Methinks they just like to tell others how to do stuff.
Dairy farmers will grow more of their own feed in years to come, bypassing the customary purchases from the feed mill. Who knows, some of them may figure that they can make more money selling the corn than running it through the cows. Humm, maybe I'll become a corn farmer and sell the cows. Cows are a lot of work, after all.
Want to talk about demand destruction?
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ogden
Hired Hand
Posts: 244
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$8 corn
Aug 1, 2012 21:46:08 GMT -5
Post by ogden on Aug 1, 2012 21:46:08 GMT -5
Sounds like it took you almost 30 yrs to figure out there might be more money in a different venture of farming . Good for you
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$8 corn
Aug 1, 2012 22:34:19 GMT -5
Post by cousinit on Aug 1, 2012 22:34:19 GMT -5
Your ideas and personality svck. Marland said I can't say that you suck.
this is my last post on this site.
Find someone else to put down, ahole.
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ogden
Hired Hand
Posts: 244
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$8 corn
Aug 1, 2012 22:46:03 GMT -5
Post by ogden on Aug 1, 2012 22:46:03 GMT -5
Read what you write and take it all in without a bias opinion and then call me a ahole. Have fun with your forever ending nonprofit taking dairy according to you. *****************************
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Bristol Hillbilly
Hired Hand
Sentinel aka "Bouncer"....Sitting by the door....
Posts: 215
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Post by Bristol Hillbilly on Aug 2, 2012 8:44:57 GMT -5
NS ogden, Cousinit all you do is gripe about dairying. You only get one life if your that miserable find another line of work, bring your checkbook and I can set you up with a grain farm lock stock and barrel.
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Bristol Hillbilly
Hired Hand
Sentinel aka "Bouncer"....Sitting by the door....
Posts: 215
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Post by Bristol Hillbilly on Aug 2, 2012 8:45:29 GMT -5
NS ogden, Cousinit all you do is gripe about dairying. You only get one life if your that miserable find another line of work, bring your checkbook and I can set you up with a grain farm lock stock and barrel.
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Post by 420 on Aug 2, 2012 9:47:22 GMT -5
Cuz-keep posting,we need a different out look here. These 2 guy's are just grump's cause the farm bill is gonna run out soon and then their ass will be hanging out just like the average business man. Bristol, what do you want for the place,how many acres ,storage etc. We are always looking for land.
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ogden
Hired Hand
Posts: 244
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$8 corn
Aug 2, 2012 11:12:55 GMT -5
Post by ogden on Aug 2, 2012 11:12:55 GMT -5
Sorry 420, I dont rowcrop . No handouts here. Im going to bet you own some row crop ground though.
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$8 corn
Aug 2, 2012 11:45:17 GMT -5
Post by 420 on Aug 2, 2012 11:45:17 GMT -5
Yes ogden,my family owns a considerable amount, I only own about 240,but I am a wage slave so it takes me longer and at 8000 an acre around here,that puts me out as I cant depend on cash rent to stay high long enough to pay for it. Are you the guy that raises deer?
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$8 corn
Aug 4, 2012 12:42:44 GMT -5
Post by Mark (EC,IN) on Aug 4, 2012 12:42:44 GMT -5
A slightly different take. This is a copy and paste. We will have a 10 billion bushel corn crop and a 2 billion bushel bean crop. Supply and demand are always about the same number. It has to be that way or physical shortages would pop up. Demand for soybeans is gonna fall 50% to avoid a shortage. 50% of all hog production must stop. A year from now half of all the hog barns must be empty because half of all the bean crushers will be idle. This country produced a bubble of meat. The meat production business model was predicated on sub-market grains from the LDP era and spawned a complete excess in production. The result was the school janitor could afford an occasional steak. This model is crazy and is unsustainable in the natural world. Worldwide the number one consumed red meat in the world is...... goat. Goats produce the most meat per crappy acre. (or also good acre I suspect) The school janitor will eat goat if he eats any meat at all. That's the way it's gonna be. Meanwhile the aquaculture industry is done for just like hogs. Without bean meal the aquaculture thing is DOA. The wild fish catch has been plummeting for years while the pen raised fish made up the shortfall. Unless it rains somewhere besides a select few places the next 2 weeks, the world is going to observe the hardest fastest fall in living standards in the history of mankind sometime next year. Whoever wins the election might want to demand a recount. That is an interesting take on things. I don't know if it is right or wrong, but I do think that this drought will have a long term effect on this country/world. These ridiculous grain prices will have farmers planting fence row to fence row the next few years.....only to discover that there is a limited number of animals left to feed it to, causing prices to erode back to LDP territory. It is interesting the terminology "meat bubble"....kind of like the housing bubble. Seems like the government is good at creating 'bubbles". Maybe Uncle Sam should get their nose out of things.........hopefully before we have a health care bubble
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Post by 420 on Aug 6, 2012 9:53:36 GMT -5
There is nothing the government cant mess up. I read this morning that a multinational grain company is building a port in northern Brazil,the say the bean crop in that area is going to go from 2 billion mt now to 12 billion in the next 10 years.
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