Heifers: Breed Not Feed

Breed Those Heifers - Build our Cow Herd.
I say OUR because we need to take ownership in what has become the determining factor as to where our industry will be in the future.

• Yes we are producing just as much beef as we always have
• Yes we have cut costs - become more efficient - Found ways to do more with less

But:

• Populations are increasing 
• Global demand is increasing
• Our competition can MEAT those demands much faster
• We CAN'T STOP BICKERING

Pull your heads out, put away your EGOS and get to work.
Build our COW Herd.
Get out of those meetings, go home,  get your work boots on, and Breed Your HEIFERS.
Breed Those Heifers and get our industry out of this whole we have placed ourselves in.
If we do not make this a number one priority - We will have nothing to fight about.
If our industry was sound and we needed to just tweek things here and there I would say put on your gloves and take it to them
BUT Our Industry is not well.
Our Market share is declining.
People are making a killing at Killing us because we are a weak industry.
That is why we have the Enviros and all their counterparts taking shots at us and making  money doing it.
Take ownership in our faults and fix them.
Kit West

A SALUTE TO THE TRADERS

Generally, the public’s perception of a trader is negative. Traders are the ones that cause all the turmoil in our lives. When prices move a certain direction unfriendly to our lives, it is thought to be the work of traders. Traders cause the stock market to go down when we need it to go up. Traders run up the price of oil and crash the prices of our bonds. Farmers blame Traders for driving down the price of their crops or running them up after they hedge. Cattle feeders question fair prices when they buy and sell futures because they are under the control of Traders. The Government vilified and prosecuted Goldman Sachs for behaving as a market maker in the middle of an over the counter product betting on mortgage yields. Basically, anyone making a living, betting on the price of anything, runs the risk of offending someone.

Traders fall into two categories. There are long term traders who make bets on price trends over an extended period of time. These traders take a view of a particular market and are willing to wait to exit the position for longer terms -- generally months before they see results. Traders forecasting inflation have been placing trades based on this forecast for over a year and to date there is no payoff. Then there are short term traders who are basically arbitrageurs. They see an offering at a price they feel is under or overvalued and purchase it hoping to turn around and flip it for a profit. 

Traders in both categories fall into several different types. Some are intuitive and gather information in unique methods and then feel a certain direction is right for the trade. Others are analytical pouring over mountains of facts and historical patterns arriving at a conclusion on the market direction. There are technical traders who watch the charts to detect pricing patterns for the future. Others look only to fundamental data on supply/demand relationships.

The function of a trader is to discover the price of a product or commodity. To this end they serve an invaluable benefit to markets. They send market signals to the producers of the product -- offering encouragement or discouragement in their production plans. The reaction of the producers determines the supply of the product for months to come based upon what a trader will give for future deliveries of the product.

It is only when moral terms become attached to the actions of Traders that our economic system suffers. Self interest is NOT bad. Accompanying every trader choice to buy or sell is a risk that the bet will be wrong. The person on the other side of the transaction is betting the opposite direction for prices. There is nothing “good” or “bad” about the bet unless the transaction violates a law or trading protocol. The fact that a Trader profited from his purchase or sale, is not wrong or bad. Frequently the press and public are alarmed by the fact of Traders making money in the marketplace.

It would be helpful to educate the public in the role and benefits a Trader offers to the marketplace. Academics and analysts offer their views every day and some of us listen, but traders place their money at risk and put their money where their mouth is.

Written By: The Ag Center

SHOT YOURSELF IN THE FOOT

Self destruction is not normal. Commerce usually encourages participants to avoid actions that threaten their livelihood. The beef industry is fairly reliable in looking after its own interest. Sometimes those interests are not commonly shared and disparate views emerge among industry members. Animal ID and COOL are two examples. Animal ID is an important strategic effort that is necessary to grow our export markets and protect herd heath. Nothing immediate occurs when we don't compel animal ID, but we suffer financial penalties every day.

COOL is a more egregious misstep.  COOL was a chauvinistic effort to promote American beef and it sounds like something everyone would support. Under this noble aim of promoting American products is a self destructive outcome, borne of misguided advocates supported by politicians who jump at the idea of anything to promote American without ever considering the ramifications. The result has added dollars to production costs and offered no value to consumers. The average American consumer in a recent poll never reads the labels about origin or cares. Consumers care about how much it costs and how it tastes.

Mexican producers have for years found better markets for their cattle in the U.S.. Cross border trade was good for operations on both sides of the border. American registered breeders found good outlets for high quality bulls from Mexican ranchers. U.S. beef operations found a reliable source for stocker cattle. A U.S. born bull bred to a Mexican cow raised a few miles from the border has little to distinguish it from another animal a few miles away on the American side.

The legislation has had a large and long lasting outcome on the Mexican beef structure. Mexican's began immediately building pens for finishing their own cattle in Mexican feedlots. This change created a need for more grain and the source was U.S. corn and milo. It also has created more beef domestically and less need for U.S. imports leaving U.S beef exports to Mexico in a large decline.

U.S. beef processors joined in the effort to sabotage our own industry. They assessed a $40 discount to Mexican cattle in spite of the fact they suffer no discount when selling the generic beef. Mexican ranchers were left with the option of selling into the U.S. with a large discount, to cattle of the same quality in the U.S., or feeding their stock into the Mexican beef trade.

Undoing wrongheaded legislation is a slow process. In the meantime when the U.S, herd is shrinking and we are in need of all the cattle we can use, one of our major sources is drying up.