foxleigh
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high prices
given the current economic situation in the usa with banks falling over,high energy prices etc can someone explain what is driving the recent high prices for cattle?
I understood that the high prices in the 70s were driven by investors who were given generous tax breaks.Is that happening again?
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3/8/2008, 21:09
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Jeash
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Re: …
I think part of it is outside investor and part of it is increased milk prices. A lot of farms are like us, we raise our own feed plus some surplus and as a result we don't feel the pinch from high feed prices. Milk in the last year has been around $20 a hundred which is high for us. The really big dairies who buy feed are getting hit but they're not the ones playing the registered game. That and there are a always some people who like to play big who can't afford to. You would be surprised who bounce checks. It is the main reason that we always require wire transfer or cash on transactions no matter how big the farm.
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4/8/2008, 19:46
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rossymons
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high prices
Here in the UK, I feel a number of things have happened.
For years, the price of replacement cattle were cheap, getting hold of them was easy too. Many cows were then bred to beef, as rearing own heifers were more expensive than going out and purchasing new. Then milk prices dipped, then halved and many farmers couldn't afford to farm any more, and more cows came onto the market, driving prices down even further.
Then farmers we're asking themselves "get in or get out" - with the farmers now still dairying deciding to get in, expand and push on. That in turn has meant these farmers now need the cattle, and quick.
This shortage of stock has occured just at a time when milk prices are high, fuelling confidence in the industry. This has lead to farmers paying what I would regard as stupid money for commerical cattle.
If anyone can show me how to make a profit on a 2000gns cow, im open to ideas!
Last edited by rossymons, 4/8/2008, 20:13
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NFU/Dairy Crest Scholar of the Year
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4/8/2008, 20:11
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Will Richardson
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Re: high prices
In 1992/3 in the UK the average price you were paying for claved cows/heifers was in excess of £1200. Prices today for are around £1500/1600 this is a realistic price considering the prices we were acheiving 15yrs ago.
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4/8/2008, 23:05
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Mooramba
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Re: high prices
The export market is putting a base in the commercial market. Currently you can sell all dairy breeds and their crosses from 150kg to mated heifers to Russia ,Indonesia, China, Pakistan, Middle east and this is normally the quiet time for exports. Some people will sell 2 young animals and buy a milker for the same money, saves feeding young ones and puts more milk in the vat at current good prices.
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5/8/2008, 8:48
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Charryman
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Re: high prices
Ah, the early 90's. That was the time when most of the BB calves we sold were over £300, to a top of £390 at a month old. We used to average £1/kg over all the barren B&W cows too. Certainly made replacements seem reasonable money.
Yesterday, culls were back well under a £1/kg, calves are £250 for the absolute tops, fert & fuel has quadrupled + (since the 90's) and feed is well over £200/t.
I agree with Rossymons, stupid money for commercial cows. IMO they will come well back in a year or so, B&W inseminations have gone through the roof nationally, which will lead to one hell of a surplus. That, and the ongoing exodus from the industry, which shows no signs of slowing, which will reduce demand at the same time.
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5/8/2008, 16:37
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PEOVEREYE
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high prices
Will i think your figures are a bit wrong from the e3xperience round here . Guy i worked for in the early 90,s sold alot of heifers through beeston pedigree sales and would typically get £1200 when the average would be about £1000 he now getting in Beeston over £2000 and Beeston average has been pushing £2000 even the months without the "special "ones in
. I think we just got to get used to playing with higher figures with equally tight margins . Are dairy inseminations really up that much in terms of heifers that will make it to calf in 3 years time ? Our AI man says it is boring the volume of belgian blue fert plus he uses there still alot of guys who just cant suddenly rear heifers no staff buildings etc. Will we start to get valuation for TB ? that will push price up again especially if they make no more effort to control badgers
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5/8/2008, 17:44
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Big Bird
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Re: high prices
quote:
Charryman wrote:
Ah, the early 90's. That was the time when most of the BB calves we sold were over £300, to a top of £390 at a month old. We used to average £1/kg over all the barren B&W cows too. Certainly made replacements seem reasonable money.
Yesterday, culls were back well under a £1/kg, calves are £250 for the absolute tops, fert & fuel has quadrupled + (since the 90's) and feed is well over £200/t.
I agree with Rossymons, stupid money for commercial cows. IMO they will come well back in a year or so, B&W inseminations have gone through the roof nationally, which will lead to one hell of a surplus. That, and the ongoing exodus from the industry, which shows no signs of slowing, which will reduce demand at the same time.
And how much were people paying for quota to milk those cows in the 90's? Nearly as much as the cow itself?
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5/8/2008, 17:49
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Will Richardson
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Re: high prices
quote:
rossymons wrote:
But times have changed considerably since then, Will. The early 90s were the "glory days" for dairy farmers, and you couldn't really lose. Now, however, things have changed.
They werent exactly the glory days for those of us who had just gone into business by ourselves. If you were buying a whole herd of cows they would cost you around £1100 each ( you toke the scrap at that price as well).
Anyone leasing significant quantities of milk quota could have been paying 8-12p a litre ... giving an effective milk price of about 12-14p. It made us very efficient.
The high prices for cows these days are just payback for that.The 90's made a lot of dairy farmers rich if they didnt have to buy/lease milk quota .. the same farmers now seem to be the ones that have higher costs of production and greater business inefficiencies. If you've never written a cheque out for 500,000 litres of leased milk quota @10p/litre + vat(I have) then you wont realise how efficient some of us were.
Cannot see the cow price dropping for sometime just a case of supply and demand and with decreaseing fertility year on year the shortage could get worse before it gets better. Decent sized incalf heifers round here are anywhere around £1600.... probably go higher nearer Autumn
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5/8/2008, 18:33
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Eryl Vet
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Re: high prices
quote:
Big Bird wrote:
quote:
Charryman wrote:
Ah, the early 90's. That was the time when most of the BB calves we sold were over £300, to a top of £390 at a month old. We used to average £1/kg over all the barren B&W cows too. Certainly made replacements seem reasonable money.
Yesterday, culls were back well under a £1/kg, calves are £250 for the absolute tops, fert & fuel has quadrupled + (since the 90's) and feed is well over £200/t.
I agree with Rossymons, stupid money for commercial cows. IMO they will come well back in a year or so, B&W inseminations have gone through the roof nationally, which will lead to one hell of a surplus. That, and the ongoing exodus from the industry, which shows no signs of slowing, which will reduce demand at the same time.
And how much were people paying for quota to milk those cows in the 90's? Nearly as much as the cow itself?
Quota peaked around 80p/litre i.e. £6,400 for an 8,000 litre cow, buy the cow herself as well and you spent £7,400. Today the cow plus her quota would cost £1,840 (1800 +40). Over the last two years the cow + quota unit is the cheapest it has been since the 1980's.
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20/8/2008, 19:35
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dairylands
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high prices
Would purchase price + 3.5 lactations * quota lease price not be a fairer comparison? After all you might shoot the cow but the quota would still be there.
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21/8/2008, 8:46
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Eryl Vet
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Re: high prices
The exact formula you would use would depend upon the farm circumstances and how long you would want to write off the purchase price of the quota. The leasing formula would still suggest that the cow/quota unit is now cheaper than it has been for two decades. I guess the crucial question is whether you are a new starter, or whether you have had all your quota since 1984.
The basic point remains the same, for the last 24 years there has been an inverse relationship between the price of quota and cattle- so with quota nearly valueless, the price of cattle is the highest it has been for some time.
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21/8/2008, 18:00
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bauldy
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Re: high prices
Why bother buying the quota ! You are not going to need it for years yet in the UK ! If ever !! The cost of the cow is even cheaper than you suggest because the price of cull cows is so high. I sold a big barren cow last week and got 103p/kg live (£740)and immediately went out and replaced her with a 50 litre third calver with low cell count for £2000. £1260 looks cheap to me !
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22/8/2008, 17:55
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Eryl Vet
EX93
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Re: high prices
quote:
bauldy wrote:
Why bother buying the quota ! You are not going to need it for years yet in the UK ! If ever !! The cost of the cow is even cheaper than you suggest because the price of cull cows is so high. I sold a big barren cow last week and got 103p/kg live (£740)and immediately went out and replaced her with a 50 litre third calver with low cell count for £2000. £1260 looks cheap to me !
Exactly what I meant, put in a different way ... the high cow price is actually cheaper than it has been in the past when taken in the context of cull and quota prices.
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23/8/2008, 17:09
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Board's time is: 23/11/2008, 9:54
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, and the 30 cost him £1,000 each! Ouch.