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New Mexico | long term period where TIMES CHANGED.
Also, we are just begining this period ( I feel we're 5 years in now...probably a 20 to 25 year trend ).
Substantiating evidence for current grain is simply the past 5 years.
We have had 2 so / so price years and 3 Major UP price years.
What that means is that 60% of the time now, grain is likely to be steady to HIGHER.
Thus grain prices at current levels are NOT that far out of line.
I do not feel that "cheaper" grain is in the feasible trend of the long term cards to be dealt so to speak.
On protiens...it's not going to matter.
( Protien prices ALWAYS eventually adjust to PROFITABLE feed conversion levels to thus supply World protien needs )
Basically as long as there's people, there IS protien dietary demand.
Thus things like cattle over time simply adjust price levels to available feedstuffs per unit of cost conversion which of course works to ration protien supply.
Reduced protien supply then triggers PRICE UPs on protien.
Grain gonna stay pretty good....AND cattle gonna DOUBLE or TRIPLE ( or whatever it takes ) to convert some kinda feed somewhere ( could be grass...could be rocks and scenery, could be waste feed type feedlot conversions etc ) to "close to the plate" dietary protien.
The MAJOR change in things like the usa cattle cycle is until those places like the Pac Basin with say 4 Billion folks adjusting diets UP in protien levels get full...well it amounts to ALOT of demand without much available supply.
Jim, those folks that can make the phone calls are making closer to $150 cwt. per week in export margins vs the conservative $75 cwt. I quoted.
Keep in mind there's other folks which call the afore and tell them they HAVE to pass thru some margin or start auditing the books on that supposedly totally tax free export income.
My bet is more "pass thru" margin now to usa producers ( there's a definite trend on this too ).
Beef in the usa at $1 per ounce or $16 per pound is only $4 per quarter pounder.
At $8 per pound, there's only $2 worth of beef in a quarter pounder.
BET on the $8.
That IS a DOUBLE up for usa beef producers at this time.
Edited by Markwright 1/9/2011 02:19
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Just went over some stats out of Brazil, and shows continued decline in herd numbers,
