What's the general feel in manufacturing? Recession?

[Ox]

Its funny how people think of the 2008 recession.
I lost 2 years worth of work, and had to lay everybody off and do some side jobs. But our entire workload was for large government construction jobs, and those were based on property taxes.
But real estate wise, around here, anyway, the people who ate it were people who had paid ridiculously high prices for mcmansions or gentleman farms, with variable interest rate loans.
Ag land went down almost not at all, and nobody was selling anyway.
Small houses in small towns were down 10% in my rural area, while the 5 bedroom houses on the hill dropped from $850,000 to $600,000.
Still completely out of the range of anybody who just works for a living, and doesnt inherit or invest for a living.
For sure, people got laid off, and then couldnt make their 2 grand a month house payments.
I was lucky enough to have bought my place in 1995, at a low interest rate, so the "valuation" of my real estate affected me almost not at all.
It was the lack of work I suffered from.

Ag was NOT in a slump during The Crash


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Think Snow Eh!
Ox

 

[Ries]

Where I live, Ag is never in a slump. We grow tulips and daffodils, fancy table potatoes like red finns, seed for spinach and many other veggies (75% of national seeds for spinach and cabbage, 90% of national table beet seeds, for instance) , specialty grains for malting and high end bakeries, raspberries, blueberries, and other oddball things- none of which are as much at the mercy of commodity swings, as they are all high end specialty foods. Mostly multi-generational family farms. The few dairies left mainly make their own cheeses. Value added keeps farmers alive. 4000 acres of feed corn or red wheat is what the guys grow who keep committing suicide. (the rate of suicide for farmers is 3 times the national average). But corn and wheat prices were up in 2008, so there were fewer farm bankruptcies than normal that year.

 

[604Pook]

Where I live, Ag is never in a slump. We grow tulips and daffodils, fancy table potatoes like red finns, seed for spinach and many other veggies (75% of national seeds for spinach and cabbage, 90% of national table beet seeds, for instance) , specialty grains for malting and high end bakeries, raspberries, blueberries, and other oddball things- none of which are as much at the mercy of commodity swings, as they are all high end specialty foods. Mostly multi-generational family farms. The few dairies left mainly make their own cheeses. Value added keeps farmers alive. 4000 acres of feed corn or red wheat is what the guys grow who keep committing suicide. (the rate of suicide for farmers is 3 times the national average). But corn and wheat prices were up in 2008, so there were fewer farm bankruptcies than normal that year.

Around here talking to the Ranchers, current auction beef prices are super high, issue we have coming is this winter's hay, the wild fires have destroyed a very big chunk of the hay in areas and there will be shortages this winter.

 

[jaguar36]

Around here talking to the Ranchers, current auction beef prices are super high, issue we have coming is this winter's hay, the wild fires have destroyed a very big chunk of the hay in areas and there will be shortages this winter.

Isn't that a self solving problem then? Sell the cattle now, take advantage of the high prices and not have to worry about hay shortages in the winter.

 

[604Pook]

Isn't that a self solving problem then? Sell the cattle now, take advantage of the high prices and not have to worry about hay shortages in the winter.

Yes and no. They need to sell some for sure, but it's a cycle, you need cattle for next years herd. If you sell to many it will take years to build back up your capacity again and if everyone does it there will be a shortage of calves next year which will push costs even higher.

 

[Ries]

Around here talking to the Ranchers, current auction beef prices are super high, issue we have coming is this winter's hay, the wild fires have destroyed a very big chunk of the hay in areas and there will be shortages this winter.

I have a friend who was a rancher for decades, and she got so fed up with auction price swings that she started a meat co-op. She got a mobile govt approved slaughter trailer, and it goes to the ranches and slaughters and freezes on site. About 40 farms and ranches now, with beef, pork, lamb and goat. Since its a co-op, its member owned, non-profit, and they sell both wholesale and retail- at multiples of the auction prices.
They make much more per pound, and vary the cuts depending on demand and sales- so they have much more control, no middlemen, and much more profit.

The old style big ranch system, in my state, is on its way out as real estate prices soar and the vagaries of there being basically FOUR meat packing companies in the US controlling around 85% of the market mean the rancher always gets screwed.
We have had fire issues as well, and a lot of ranchers in the west lease grazing from the Feds, and are competing with recreational uses, and have more and more problems with water rights as well. So the old idea that you can make a living by selling at the auction gets tougher and tougher.
Value added, and getting closer to the retail price, is the only way many farmers are surviving.
I rent my big field to a potato farmer, and he has his own "brand", and mostly sells to supermarket chains, no middlemen. He makes triple or so what the volume guys in Idaho make per ton. And he is around 50% organic acreage now, which also means double or triple price vs non-organic.
Successful farmers in my area are constantly innovating, and are making up new ways to get things to market.
Another friend of mine, maybe 10 years ago, started a wholesale flower co-op and central market warehouse in Seattle- again, she has over 20 growers, in 2 states, now, selling direct, and making a much bigger share of the selling price than the old top heavy system of big middlemen.

 

[Ox]

I have a friend who was a rancher for decades, and she got so fed up with auction price swings that she started a meat co-op. She got a mobile govt approved slaughter trailer, and it goes to the ranches and slaughters and freezes on site. About 40 farms and ranches now, with beef, pork, lamb and goat. Since its a co-op, its member owned, non-profit, and they sell both wholesale and retail- at multiples of the auction prices.
They make much more per pound, and vary the cuts depending on demand and sales- so they have much more control, no middlemen, and much more profit.

The old style big ranch system, in my state, is on its way out as real estate prices soar and the vagaries of there being basically FOUR meat packing companies in the US controlling around 85% of the market mean the rancher always gets screwed.
We have had fire issues as well, and a lot of ranchers in the west lease grazing from the Feds, and are competing with recreational uses, and have more and more problems with water rights as well. So the old idea that you can make a living by selling at the auction gets tougher and tougher.
Value added, and getting closer to the retail price, is the only way many farmers are surviving.
I rent my big field to a potato farmer, and he has his own "brand", and mostly sells to supermarket chains, no middlemen. He makes triple or so what the volume guys in Idaho make per ton. And he is around 50% organic acreage now, which also means double or triple price vs non-organic.
Successful farmers in my area are constantly innovating, and are making up new ways to get things to market.
Another friend of mine, maybe 10 years ago, started a wholesale flower co-op and central market warehouse in Seattle- again, she has over 20 growers, in 2 states, now, selling direct, and making a much bigger share of the selling price than the old top heavy system of big middlemen.

A) There is many ranchers going together and starting their own slaughter house(s) currently.

B) It sounds like "friend #2" is now the middle [wo]man.
Seems that rather than cut-out, she cut in?



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Think Snow Eh!
Ox

 

[604Pook]

I have a friend who was a rancher for decades, and she got so fed up with auction price swings that she started a meat co-op. She got a mobile govt approved slaughter trailer, and it goes to the ranches and slaughters and freezes on site. About 40 farms and ranches now, with beef, pork, lamb and goat. Since its a co-op, its member owned, non-profit, and they sell both wholesale and retail- at multiples of the auction prices.
They make much more per pound, and vary the cuts depending on demand and sales- so they have much more control, no middlemen, and much more profit.

The old style big ranch system, in my state, is on its way out as real estate prices soar and the vagaries of there being basically FOUR meat packing companies in the US controlling around 85% of the market mean the rancher always gets screwed.
We have had fire issues as well, and a lot of ranchers in the west lease grazing from the Feds, and are competing with recreational uses, and have more and more problems with water rights as well. So the old idea that you can make a living by selling at the auction gets tougher and tougher.
Value added, and getting closer to the retail price, is the only way many farmers are surviving.
I rent my big field to a potato farmer, and he has his own "brand", and mostly sells to supermarket chains, no middlemen. He makes triple or so what the volume guys in Idaho make per ton. And he is around 50% organic acreage now, which also means double or triple price vs non-organic.
Successful farmers in my area are constantly innovating, and are making up new ways to get things to market.
Another friend of mine, maybe 10 years ago, started a wholesale flower co-op and central market warehouse in Seattle- again, she has over 20 growers, in 2 states, now, selling direct, and making a much bigger share of the selling price than the old top heavy system of big middlemen.

We have the same issue here, every small place being bought out or people retiring. No new blood wanting to take up the butcher job. Some People are trying to do more direct to consumer approach.

I like the coop idea

 

[Mcfish]

Around here talking to the Ranchers, current auction beef prices are super high, issue we have coming is this winter's hay, the wild fires have destroyed a very big chunk of the hay in areas and there will be shortages this winter.

Here in Michigan, we had a bad drought in June. First cutting hay was down probably 30-40 percent and second cutting isn't anything to write home about either. I wouldn't want to be feeding any stock this winter.

 

[Ries]

A) There is many ranchers going together and starting their own slaughter house(s) currently.

B) It sounds like "friend #2" is now the middle [wo]man.
Seems that rather than cut-out, she cut in?



--------------------------

Think Snow Eh!
Ox

no, the wholesale flower business is a member owned co-op as well. My friend who started it is on the board of directors, but she is not any more of an owner than any of the other growers. She is happy to be back on her flower farm most days, rather than the 2 hour commute to Seattle to run the wholesale and cooler operations, which she did for the first couple of years. In this part of the country, Co-ops have a very long and succesful history. The biggest is probably REI, which is a member owned 3 Billion dollar business. Technically I am an owner, been a member since the late 60s. The biggest dairy product producer around here, Darigold, is a farmer owned Co-op started in 1918. They do $2 Billion a year in dairy products, I have been drinking their milk for over 60 years.
We have a fair amount of smaller Co-ops, too. For many years my health care system was a co-op, Group Health, but the board voted to sell to Kaiser in 2017. It got worse, and many people moved to other insurers. Me, I am on medicare now, so it doesnt affect me.
Across the west, a lot of people get their power from member owned electrical co-ops, particularly in rural areas.
My water comes from a member owned co-op as well- I have a farm, and all the farms around here are members of the local water association, founded in 1952.
They dont call it the Left Coast for nothing.

 

[cnctoolcat]

Filmmaker/rancher Taylor Sheridan touched on the direct-to-consumer beef sales model in the story of his television series "Yellowstone".

Rancher John Dutton (Kevin Costner) and family had raised cattle and sold it the traditional way for nearly a century, with nary a profit to be had in a long time.
His daughter Beth calls the "6666 Ranch" (Four sixes) in Texas, and discusses how the enormous Texas cattle farm sells millions of pounds of beef online direct to consumers, at significantly higher per-pound dollars. All the while saving the consumer over grocery store and butcher shop prices.

Anyway, Beth promises dad she's going to transform their ranch to do the same thing, else it's not a viable business anymore.

And then the mid-season of the show ended...still waiting for the show's return.

It's neat to see how Sheridan can weave modern-day farming issues into the storylines.

ToolCat

 

[Ries]

Filmmaker/rancher Taylor Sheridan touched on the direct-to-consumer beef sales model in the story of his television series "Yellowstone".

Rancher John Dutton (Kevin Costner) and family had raised cattle and sold it the traditional way for nearly a century, with nary a profit to be had in a long time.
His daughter Beth calls the "6666 Ranch" (Four sixes) in Texas, and discusses how the enormous Texas cattle farm sells millions of pounds of beef online direct to consumers, at significantly higher per-pound dollars. All the while saving the consumer over grocery store and butcher shop prices.

Anyway, Beth promises dad she's going to transform their ranch to do the same thing, else it's not a viable business anymore.

And then the mid-season of the show ended...still waiting for the show's return.

It's neat to see how Sheridan can weave modern-day farming issues into the storylines.

ToolCat

yeah, as long as you inherit a hundred million dollars worth of land... Neither the real 4 sixes, nor the fictional ranch in yellowstone paid real money for their land. They got it for almost nothing a hundred years ago, and the original owners got zippo. (the Indians) Thats a business model that never worked for me- I had to pay for all my real estate, my equipment, and everything else.

In reality, corporations own those really big ranches.
I watched 4 seasons of that show, and, the writing is good, he gets great actors, but the murder rate is unbelievable- I mean, I literally dont believe that a family can murder 20 or 30 people in a few years, and not get caught, no matter how handsome or rich they are. No State, local or Federal law enforcement? Only in Hollywood.
And way too much million dollar horse porn for my tastes. Nobody, including Sheridan, buys those million dollar cutting horses by selling beef. Sheridan grew up on a hobby ranch, and pays for his ranch, and his horses, by selling scripts.

 

[CMI94]

Is it feeling like 2008 again, or are you slammed? I'm noting that more and more people are slowing down a bit, or doing a lot of quoting but never actually getting the paid job. Are your A/R going out further? Or can't you catch a breath?

Obviously seeing the same thing you are with a lot of people talking about starting new shops. Covid made everyone hate punching a clock for 12 hours. Can't blame them, I made my job 50% remote. Now it seems the big companies are closing up remote work so they can analyze who's actually doing the work before they make cuts.

The vet med side has changed. People are no longer flush with cash. People are still signing estimates, but paying with private lines of credit instead of the normal credit card.

My manufacturing side is precious metals recovery and support. Bullion is still selling great, though not as great as it was, but jewelry manufacturers and stores are not doing as good as they were.

Surplus tooling in my opinion has the lowest prices I've ever seen. Historically, I have seen this when people are so slammed they don't even care what the new version costs, and I see the same when people are fixing their own tooling or running a little slower cycle and making what they have work.

Please, no politics.

We’re slammed. 3-4 month backlog, but new orders are starting to slow up. We could use a little break. Guys are getting burnt out and machines are in dire need of PM…