Re: Mad Cow is confirmed.

Posted by kyhayman on December 24, 2003 at 13:55:20 from (64.12.96.236):

In Reply to: Mad Cow is confirmed. posted by Ray,IN on December 23, 2003 at 20:53:36:

Everybody take a deep breath. Yes it's bad that we now have confirmed mad cow disease in the US. Yes futures dropped the limit and yes we are going to take a price hit.

It was going to happen and if it had to it could not have happened at a better time. Most live markets are closed for 2 weeks for the Christmas/New Years holiday; terrorism alerts are the main headline, not this mad cow case; prices are at record levels so even a 20% hit in price is still above the 10 yr average; it was in a dairy herd, not a beef herd; we are at seasonal low demand with a relatively small % of the cattle needing to come off feed; and kill weights are at decade lows. Guys I feel for are the ones with feeders ready to kill and not having their price locked. This isnt Canada, part of what hurt them is they lack domestic kill capacity for their cattle so they ship a lot to the US for kill.

Outside the short term (the next month will be ugly) expect a dime drop in the market b/c we will have to open the Canadian border, and another dime drop due to loss of foreign market share. If you are in the business for the long haul we are far better off with .80 5 and 6 weights. When we see $1 a pound 5's and 6'es everybody and their brother want to own cattle. When you get feds in the 90's it gets absurd. Then all it takes is feed prices to jump (anybody seen where soybeans are heading?) and we wind up selling 5 weights in the 40's (remember 1994, I do, lost almost a hundred grand that year).

I guess what I'm trying to say is now is the time for just concern, not panic. The fundamentals are here as long as this doesn't go on forever for this to pass by the time grass comes.

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