The WACKY WORLD OF CATTLE and COMMODITY PRICES

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.


Well...several months of research and data down the drain! 


Here I was, all set to show you how the retail price to the customer was going to sky rocket this summer, how the price of corn and feed grains were too high for cattle producers to profit and, in general complain about how the cattle producer was being squeezed. 


Then, last week (June 30, to be exact), The USDA released "The Crop Report". 


Let me set this up...
In a nutshell, I was going to show:


1. Based on the late spring flooding of hundreds of thousands of acres of corn through the Midwest to Arkansas and Louisiana, the persistent cool weather and rains across the farm belt that have delayed annual plantings, and the devastating effects of storms and tornados across the mid-section of our country as well as through the South would drive the prices of corn and grains to all time highs. 


2. Because these commodities were the back bone of "grain fed" beef, the price of consumer prices for beef would rise, while the cattle producer would struggle to make a profit DUE to the higher costs associated with feeding cattle grain. 


AND, I was right (ever so briefly) ...corn and soybean prices were soaring and cattle producers, who are currently reaping very high prices for their cattle, were having their profit squeezed by the high cost of feeding corn...


Which brings me back to "The Crop Report"......

Turns out, the expected 2011 corn harvest will be much higher than expected and the harvest of other important food grains are also going to be well above average......This caused both corn and soybeans to back off of their "highs" by more than 10%. Grain commodities will continue to trend down over the next few weeks to very manageable cost levels for the beef industry.

GRAINS-U.S. corn extends losses after USDA report
                                                                                        Reuters News Service

So, what we have, currently, is the most rare of events in the cattle markets. The producer is actually receiving record prices for cattle while also enjoying "cheap feed"!! In other words, cattle producers are in a position to maximize profits not only through "lower input costs", but also while receiving historically high prices for their livestock.

"

Compared to last week’s sharply higher market, yearling feeder cattle 

continued their momentum and sold firm to 5.00 higher.  Steer and heifer calf 

demand improved on the heels of last week’s gains and traded from steady to 

6.00 higher with instances as much as 10.00 higher.  The most impressive 

signal of this week’s higher trade was the fact that it took place on fairly 

heavy receipts for this time of year with no help from the CME futures or fed 

cattle trade until the tail-end of the week." - USDA CATTLE AUCTION REPORT, JULY 1, 2011

Meanwhile, consumer prices for retail beef are still going up due to the inverse relationship with the above financial factors...the record high prices paid to producers are being "passed along" to the consumer.


"...higher corn costs—all higher costs—ultimately wend their way through the system and wind up in the retail price of the product..."  Burt Rutherford, Senior Editor, Beef Magazine

Texas Sunset...Priceless!

Taken with my phone as I was "locking up" after a day of fence building in 100+ degree weather.
A nice reward for a hard days work.

COMING NEXT: Current Cattle Prices and What they mean to the Consumer as well as the Cattle Producer

CLARIFICATION of: A Knuckleball is a Curveball that Doesn't Give A Damn - Bob Ueker

CAUTION(!):  Unhinged RANT!!
This is more a "just venting" thing and will be poorly written and choppy in thought..at best.
________________________________________________________________________

I have had a sibling who has battled two forms of cancer for the past four years. One has required surgery, multiple radiation therapy, and two "full powered" chemotherapy treatments...only to see it coming back. The other is slow moving, weakens the bone mass to "peanut brittle", and is...incurable. Yet this bone cancer has brought all of the above treatments with it as well (Separate treatments for each form of cancer).

While the afflicted endure multiple types of treatments and high levels of pain, not to mention suffering.... Cancer also exerts high levels of stress, mental anguish, and, in some instances, pain to those "near and dear" to the patient. In addition, cancer treatments rack up financial bills that rival congressional spending...These bills are even higher if the patient does not have insurance.

So, you ask, what am I ranting about(?) Well...three separate myths that have persisted in our cultural thought throughout the past several decades.

MYTH 1: "Shucks, what a shame. He/she has cancer...unavoidable, I suppose."

WRONG! For at least the last 15 years, we have been inundated with science that tells us the many various ways/things we can do to lessen the risk or even avoid getting cancer. Yet, we collectively gorge on sodas, fast food, and highly processed foodstuffs all while addicted to tobacco products. It is all about choices. The choice between fresh produce, fruit, meats, etc, versus pre-packed, micro wave ready processed dinners. The choice between getting up and moving around and not just sitting in a recliner watching TV. The choice to choose a quality older age...to not be a burden to others OR YOURSELF.

Yes, I feel empathy and heartbreak for my sibling and the others that I see, but, 9 out of 10 could have either lessened the impact or avoided this illness altogether with some simple choices. ("There, I said it!")

MYTH 2: "Aren't we something? Thanks to the strides in modern technology and nutrition, we are living a lot longer than even a single generation ago!"

NO, not really. If it wasn't for the daily breakthroughs in modern medicine to COUNTERACT modern nutrition we would be dying sooner than our great grandfathers/mothers. (Just my opinion, no factual basis for this one)

MYTH 3: "We need Health Insurance for Everyone."

 Oh give me a freaking break(!). I have witnessed, first hand, what it means to not have health insurance. The dirty little secret "they" forgot about when Lawmakers passed "Obama Care" was a little publicized rule (Law?) that ALL hospitals follow in this country: A patient cannot be turned away from medical care because of inability to pay.  Let me repeat that...A patient cannot be turned away from medical care because of inability to pay....My aforementioned sibling, despite having been a medical professional for more than 25 years, had no health insurance (that is a sore subject for another rant). Despite the lack of insurance, they received quality care from competent doctors, got the latest drugs and therapy, and in a timely manner. All they had to do was sign a document that they would make a a small monthly payment to the hospital (the hospital eventually sells the debt to a collection service, who will make obnoxious attempts to collect, eventually collecting a profit by attaching to the patients estate upon their death)....Oh, and after racking up a SEVEN FIGURE bill, Medicaid swooped in and provided some relief on future treatment costs...because the "sib" qualified for disability...(heavy sigh)

Huh? Tell me again why I pay exorbitant premiums, as a self employed individual, to the health insurers (with exclusions, I might add)?? AND explain to me why "we" mortgaged the future on "Health Reform"??

Finally, I'll end with a true absurdity that any of you can witness at almost any super market, on almost any day....The grossly over weight man/woman, in the electric shopping cart, cruising the aisles while breathing pure oxygen through a nose tube (oxy tank between their feet), ......and, wait for it.......smoking a cigarette! (And if you look close enough, they probaly have a permanent medical port in their arm)...Ever wonder how a person can be breathing pure oxygen, while smoking a lit cigarette...without blowing up?

SHUT UP and EAT!

Time to Quit Complaining about Our Food and Do Some Healthy, Delicious Eating... Grab a Fork!


Grass Fed Burger Recipe
(From Cindy and Bob in Fort Worth)

Grass Fed burgers with red onions and mushrooms:
For two burgers:
 2 TBSP olive oil
 1/2 sweet red onion, sliced super thin
 1 portobello mushroom 1/4 inch slices
 1/2 cup good red wine ( pinot noir, merlot…you choose)
 ground pepper (lightly)
 Pinch of sea salt ( add after wine or mushrooms)
 
  Heat saute pan, add cool oil, when heated, saute
  onions 2-3 minutes. 

  Add mushrooms, cook additional 2 minutes. Add wine,
  pepper and salt to taste.
  Cook until wine is reduced.

  Ladle over Beef patty, on split grilled Kaiser roll.

 Cowboy Beef and Black Bean Chili. 
(Takes about 2 hours to prepare)

Ingredients:
2 pounds Grass-Fed ground beef
1 tablespoon vegetable oil
1-1/2 cups chopped onions
2 tablespoons minced garlic
2 medium yellow bell peppers, chopped
1 large jalapeño pepper, seeded, finely chopped
1/4 cup chili powder
1 tablespoon ground cumin
1 teaspoon dried oregano leaves, crushed
1 teaspoon dried thyme leaves, crushed
1/8 teaspoon ground red pepper
1 can (28 ounces) crushed tomatoes, undrained
1 can (14-1/2 ounces) chili-seasoned or zesty-style diced tomatoes, undrained
1 can (14 ounces) ready-to-serve beef broth
12 ounces dark beer
1/3 cup tomato paste
1 tablespoon honey
2 cans (15 ounces each) black beans, rinsed, drained
Chopped fresh cilantro (optional)
Instructions:
1. Brown ground beef in stockpot over medium heat 8 to10 minutes or until beef is no longer pink, breaking up into 3/4-inch crumbles. Remove from stockpot with slotted spoon. Set aside. Pour off drippings.
2. Heat oil in same stockpot over medium heat until hot. Add onions and garlic; cook and stir 3 to 5 minutes or until onions are tender. Add bell peppers and jalapeño; cook and stir 4 to 5 minutes or until peppers are tender.
3. Return beef crumbles to stockpot. Add chili powder, cumin, oregano, thyme and red pepper; cook and stir for 2 to 3 minutes. Stir in crushed tomatoes, diced tomatoes, broth, beer, tomato paste and honey; bring to a boil. Reduce heat; cover and simmer 45 minutes. Uncover stockpot; continue simmering 30 minutes or until thickened to desired consistency, stirring occasionally. Stir in beans; cook 5 to 10 minutes or until beans are heated through. Season with salt and black pepper, as desired. Garnish with cilantro, if desired.
Makes 8 servings.

TEXAS SALSA MEATLOAF
Ingredients
2 lbs. Grass-fed ground beef
¾ c. Italian seasoned bread crumbs
1 egg
1 tsp. kosher salt
½ tsp. black pepper
½ tsp. ground cumin
¾ c. salsa (your preference)
Directions:
Preheat oven to 325 degrees F.
Combine all ingredients by hand, mixing very thoroughly. If mixture seems too dry or crumbly, add more salsa to increase moisture.
Shape mixture into a loaf and place in glass baking pan. There should be no need for a loaf pan here, although you can use one if you’re a strict traditionalist.
Bake for approximately 90 minutes, until internal temperature reaches 160 degrees. Allow to rest for 20 minutes before carving.
Glaze (optional)
½ c. catsup
1 tsp. Worcestershire sauce
½ tsp. Tabasco (or other hot sauce)
1 tsp. ground cumin
1 ½ tbsp. Honey
Mix all ingredients together and baste loaf every 15 minutes after the first 10 minutes of cooking. Serve with extra glaze on the side for dipping and drizzling.

HOPE Y'all Enjoy!
 

MORE RANTING-Coming Soon

Well, here it is, half through June...Will begin posting again within a few days.

These were taken on my phone, so quality is "iffy", but, I think they still get the message across that our world is still full of bright and beautiful moments.

Our newest Calf: "Dokey" ... His first day in this World ... He was a real bright spot for us!

SUNRISE on the Ranch ... Heart Lifting.

A Knuckleball is a Curveball that Doesn't Give A Damn - Bob Ueker

Knuckleballs and a few "hard bending" curves...Life has a way of throwing things at you that make you change your batting stance from time to time...And make you pay attention to what is really needing your attention.

I expect to get back to my writings by June or so.

ICE and HARD FREEZES in CENTRAL TEXAS...

We are still making repairs and catching up from the January and February ice and sub-freezing days. I hope to start posting very soon...

In the meantime, here is another post card from the ranch :)

HAPPY HOUR! 

This is "Blue" a pure bred Brahma Bull who is spending the winter with us. He does enjoy a beer now and then. Just to give you some perspective...I am 6ft 6in tall, Blue is 6ft 1in!

CHAOS in the NEW YEAR

2011 off to a hectic start...will continue posting within a few days...Happy New Year to ALL!!

In the meantime, here is a pic of a "Roses" and her calf "August McCray" (Augie)

"Please...Sir, May we have some more?"

MERRY CHRISTMAS!

I'll be back the first week of January...2011!

CATTLE BARONS - TODAY

PART 2.2 of The Series: A LIVING WAGE FROM COMMERCIAL CATTLE

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.

A cattle baron is a man who possesses great power or influence in the activity of herding/caring/selling of cattle. - Unknown

 The Civil War devastated economies in the South and in particular Texas. However, Texas had a distinctly singular and bountiful resource. Millions of longhorn cattle roamed wild across the state. Due to the ravages of the war and the steady stream of immigrants, beef was in heavy but short supply across the nation. To complicate matters further, Texas had plentiful supplies of beef but, no distribution system (railroads)...Kansas (three states and hundreds of miles away) had the rail heads to get the beef to market. 

In the late 1800's, some daring and intrepid cattlemen rounded up longhorns by the millions and herded them north across Texas, Oklahoma, and into Kansas. In doing so they gave rise to two, distinctly American, icons: the Cowboy and the Cattle Drive.

"Driving Cattle circa 1887
(John Grabill)

In less than two decades, following the Civil War, great herds of these longhorn cattle were rounded up and driven north to the rail heads in Kansas. These wild and unpredictable bovines were only worth about a dollar a head in Texas, but upon arrival to the shipping points in Abilene, Dodge City and Wichita, a single longhorn could fetch as much as forty dollars. More than six million longhorns made the three-month trek north. Often referred to as the greatest migration of livestock in the history of the world, cattle drives and the cowboy became living legend. 

Ranch Brands on Marker
 Doan's Crossing, Texas
Learn More

The moving of several thousand wild head of cattle, at one time, over five hundred miles of rugged prairies, encounters with murderous outlaws, and hostile indians brought fame and fortune to a select few. Men such as Charles Goodnight, Oliver Loving, John T. Lytle, the Blocker brothers, and a host of others took enormous financial as well as personal risk (Loving was killed in an Indian attack while leading a cattle drive) to reap the considerable rewards. 


Legendary ranches were born as well. 

The Y.O., XIT, JA, King Ranch, 6666, Waggoner, and Matador Land and Cattle were among the largest providers of cattle at that time (Side Note: With the exception of the Matador, all of the above named are still active cattle ranches today). These men were literally "Barons of the U.S. Cattle Market" and wielded considerable influence in the pricing of beef.

That was then...This is now.  

The open range became fenced pasture land. Cattle are now "driven" to market in eighteen wheelers via a modern highway system. Charles Goodnight, Oliver Loving, the XIT, and 6666 no longer influence the pricing of beef. In fact they are now merely characters and entities of a romantic and colorful past...just "history"as they say.

"Driving Cattle" - Modern Day

Today there are only four "cattle barons". Their decidedly unromantic names are Swift, Cargill, National Beef, and Tyson. These conglomerates are well financed, ruthless buyers of beef "on-the-hoof". Together they control and process 69% of the beef produced in the United States. In doing so, these "Big Four" heavily influence the price of live cattle.

"The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways." - President John F. Kennedy

LITTLE KNOWN FACT:

Many of the cattle drives were "staffed" by cowboys between the ages of 15 to 20. There was such a shortage of labor that many of the "cowboys" were actually...cowGIRLS. Many of whom cut their hair and made themselves appear as boys to get a job that was dirty, physically exhausting, and paid about a $1.00 per day. 

To learn more about the considerable influence and heroism of women in the American West visit the National Cowgirl Museum and Hall of Fame in Fort Worth.  Learn More Here

PART 3: A Living Wage From Commercial Cattle: What Goes Up...