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Blaming Our Troubles on the Market

By   /  April 10, 2017  /  6 Comments

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*Editor’s note: just to be clear and to avoid hurting anyone’s feelings, John would remind folks
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  • Published: 4 years ago on April 10, 2017
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  • Last Modified: November 28, 2018 @ 9:57 am
  • Filed Under: Consider This

About the author

John Marble grew up on a terribly conventional ranch with a large family where each kid had their own tractor. Surviving that, he now owns a small grazing and marketing operation that focuses on producing value through managed grazing. He oversees a diverse ranching operation, renting and owning cattle and grasslands while managing timber, wildlife habitat and human relationships. His multi-species approach includes meat goats, pointing dogs and barn cats. He has a life-long interest in ecology, trying to understand how plants, animals, soils and humans fit together. John spends his late-night hours working on fiction, writing about worlds much less strange than this one.

6 Comments

  1. TJ says:

    The chart tracking inflation to beef prices is misleading.

    At the start in 1950, beef prices are at $20 with inflation at 10. This difference looks small in the chart, but it’s a 2x difference. If you start them both at $10, then you see that inflation has gained faster than beef prices.

    The funny thing is, I think a truly accurate chart would support your argument better, that cattle farmers need to look to reduce input costs and consider returning to a more natural grazing method due to the changing external factors.

  2. John Marble says:

    John Marble responds:

    Sincere thanks to each of you for your comments. I should note here, Chip, that I have stolen many of my best ideas from your writing.

    Dwight, I have to agree: there are plenty of other data points that would bring the picture more into focus. That said, I believe one of the great hurdles ranchers need to overcome is deciding what to worry about. There are so many things we have absolutely no control over, like the price of fuel or fertilizer or concrete or_____. My response to those prices is to look for ways to reduce or eliminate those troubles from my business model. My old friend Allan Nation said if a grazier is thinking about pouring concrete, he should take two aspirin and go back to bed. Probably good advice.

    When it comes to land and rent values, I choose not to compete with whoever wants that class one crop soil. Currently, hazelnut growers are paying in excess of $10,000 per acre. Clearly, I need to look somewhere else for pasture possibilities.

    Thanks again.

    • DWIGHT EICHORN says:

      It is just my understanding that the nominal inflation rate is massaged and manipulated to make the dollar appear to have experienced less inflation than reality.

      My point is in the same line as yours. Just the fact that most input costs have risen so much faster than the price of beef means that beef producers need to go back to the drawing board and do the math all over again instead of just assuming what worked before will work today.

  3. Doug says:

    Brilliant analysis and article. Grazing animals were built with 4 stomachs and 4-wheel drive, and the ability over time (and selection) to adapt to the specific country they inhabit. So trucking them hundreds of miles and feeding them grain in a feedlot is already a bad decision (at $/day), plus extra medical charges and higher mortality rates.

  4. chip Hines says:

    I’m in John Marble’s corner, though I want to expand a little from my view. The 1970’s high performance cattle movement was an assumption that since we sold pounds, more pounds would lead to prosperity. There was no economic analysis to back this up. The upshot was profit per animal and that led to big cows that feedlots and packers loved.
    The cow calf industry subsidized them while diminishing their profits.

    I like John’s inflation line as our profits pay for our living expense which as we all know, has ballooned.

  5. DWIGHT EICHORN says:

    Hi John Its not that the conventional beef producers are more mentally challenged than the ave business person, its just that they have not been informed that times have changed and the model that so many current beef opperations were built on and that worked so great from the 50s till the eighties no longer works.

    It would make the facts a little clearer if you were to add some more metrics to your graph that are more pertinent than nominal inflation to the conventional beef producer, such as machinery, concrete and fuel prices. For one we could add the price of regular gasoline to your graph. 26 cents in 1950 and by 2012 its 354 cents (increasing at 3 times the rate compared to the price of beef).

    Another metric that needs to be taken into account is the increase in Ag land prices including taxes and rental rates since the 50s. This has the potential to negatively affect the graziers even more than the conventional producers.

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