Posted by JD Seller on February 04, 2014 at 21:58:48 from (208.126.196.144):
In Reply to: Fat cattle results!!! posted by Paul from MI on February 03, 2014 at 17:17:13:
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LAA: I have used cash contracts for over 25 years. I know my feed cost and by the time I lock in the price I know the calf price. I am in this business to make money year in and year out. To do that you need to lock in a profit even if that may make you miss a wind fall profit. I do not gamble at the boat and I will not gamble on the market with fat cattle either.
As for my contract increasing the packers captive supply. If my few head break the HIGH cattle prises than the market is in trouble any way.
I guess I look at the packers differently than many producers. They are not my enemy. They are actually my customers. One packer or another buy 98% of my fat cattle. So I really do not care if they make a large or small profit after I sell them my cattle. I make sure and make myself a profit. That is the only number I worry about.
I have seen too many guys around me play those marketing games. Like your talking about the cattle numbers and the number of brood cows etc. I have had much better luck just KNOWING my production cost and keeping good rates of gain. Then take a profit when it is offered and then forget what the "live" market does. I never worry after I lock in a profit on a pen of cattle. Their are sold I go on to the next group.
If Feeder calf prices stay this stupid I will let my yards go down in numbers. If I only finsh the calves my brood cow have that is better than buying feeder cattle that are too high.
Have a neighbor that just bought 250-300 eight hundred pound steer calves. He has two dollar a LB. in them once they are delivered to his yard. He is locking is a LOSS on those cattle. I asked him if he had them protected with a contract???? HE does not. He was telling me the same kind of things your talking about: cattle suppies Brood cow heard numbers and such. GUESS what??? All those things mean ZERO because he has too much money in the calves he just bought. HE just locked in a loss.
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