WLPIP is a really great risk management tool – if it is utilized.
Last year showed a large market correction, and without a solid risk management plan, left many producers out of luck. Although many ranchers did benefit from the program last year, a large chunck remained without any risk management at all.
Ranching is a business and protecting your bottom line is one of the many ways to get ahead.
Here is a great article from the Canadian Cattlemen Magazine outlining the difference in uptake of WLPIP between last year and this year. It also does a great job of illustrating how effective WLPIP is for those who enroll.
This story needs to get out to our government so focused on carbon emissions. Ranchers are fixing carbon every day by managing range lands at our expense for the good of all. Battles the view of “Cowboy welfare” when ranchers ask for surface compensation on grazing leases that we manage.
Just over one week until the Alberta Beef Industry kicks off in Red Deer! We are looking forward to meeting up with everyone and getting a chance to catch up on all the exciting things going on in the Cattle industry this year. We will be set up in the Suppliers Circle on February 18th and 19th. It will be a busy week because while we are set up at ABIC, Ryan will also be speaking at Agri-Vision in Lloydminster. On Thursday, February 18th, he will be talking about the best ways to protect yourself and your profits against highly volatile markets. If you haven’t signed up for either event, we hope you do. Don’t forget to stop by and say hi!
The US cattle on feed report highlights a 2% year over year increase in cattle on feed. When you look at what is driving that increase it is all feeder cattle over 800 lbs, mostly steers. Light weight cattle are well below 5 year averages (>10% below). There will be overhead pressure on nearby fat prices as these cattle are worked through, but it will be interesting to see if the light weight cattle make their way to the feedlots later or not? Cow slaughter is down another 16% year on year. Another sign of retention in the cow herds. Australian cow beef may be headed to China as they have opened up a live trade agreement with China. Watch for cull cow prices to lead this market higher, lean beef will become a premium if these cows don’t come to town. We’ll see what happens after tax year end.
Trouble in the Chinese stock market and the devaluation of the Chinese currency is wreaking havoc with agricultural production companies in China, which may cause some short-term weakness in the global beef trade. The light at the end of the tunnel is that retail sales in that country are steady and yet production (especially pork) is dropping at a staggering rate in China, which could cause a scramble later on for meat products for import. Good times are ahead, but there could be some valleys and tough treading before we get there, hang on!
Meat and other agricultural businesses in China have been among the worst hit by the slump affecting Chinese stock exchanges. [read full article]
Herd rebuilding is beginning in the United States, though we are slow to follow suit in Canada thanks to drought. It looks like good prices and moisture are making for solid herd growth, which will likely stem the rise in feeder prices, but hold at some elevated value until the new calves actually enter the system. The time for speculating on higher prices may be past, put your hedges in place.
“The nation’s beef cow herd has started down the path of the largest expansion in 25 years. The last major expansion was from 1990 to 1995 when the herd grew by ten percent.”
[read full article]
Attention cow/calf clients and friends: I thought this article was worthy of attention as it gives insight to the viewpoint of those trading cattle futures in Chicago. The article gives a good summary of some of the risks to our cattle prices going forward, and a look at overall fundamentals. Price protection is vital as a way to protect yourself from any downward markets. Cows in Control is pleased to discuss any of these methods with you, contact us today.
Latest Meat Supply/Demand Table Offers Clues to Price Direction
The USDA confirmed that the cattle market is in the middle of an aggressive expansion of beef breeding numbers. [read full article]