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Tyson Foods, Inc. Message Board

netlosstoo 59 posts  |  Last Activity: Jun 24, 2015 10:22 AM Member since: Feb 24, 2003
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  • Reply to

    Hopefully CALM will fall 1-2 dollars

    by eggtrader Jun 22, 2015 9:04 PM
    netlosstoo netlosstoo Jun 24, 2015 10:22 AM Flag

    Chill, eggtrader and friends and others here have been way ahead of the analysts in anticipating the rising egg prices and earnings as a result of the bird flu ... the bird flu premium included in CALM stock price can be calculated fairly easily ... all you have to do is make assumptions on price ... analysts are telling you what their assumption of price is for the next year ... are they reasonable? IMO yes ... given 30+ m drop in hens to 271m at June 1 ... do prices need to rise from these levels? yes ... last year UB MW large averaged over $2 in December w/o bird flu ... egg prices will need to be significantly more this year to achieve analyst estimates ... May and June are the industry's slowest months and historically egg prices have been lowest in these months ... yet MW UB L is trading at about $2! ... if you trade either long or short in CALM shares you must have an idea of the bird flu premium ... for now the analysts estimates seem reasonable IMO

    **Please don't tell me you are trading based on those self serving analyst reports.**

  • Reply to

    IPO

    by netlosstoo Jun 21, 2015 6:23 PM
    netlosstoo netlosstoo Jun 24, 2015 9:46 AM Flag

    P/E reasonable at about 5 times

  • netlosstoo by netlosstoo Jun 21, 2015 6:23 PM Flag

    I don't have anything to say ... just wanted to have the first post on the WNFM board

    Operating margins similar to SAFM and PPC ... PE reasonable at about ... they've paid out all their prior year earnings in LLC distributions .. WNFM will use $$'s to pay off half their debt so interest exp. will be lower next year ... if you like the chicken industry right now, its an ok investment ... but i'd still prefer SAFM

  • Reply to

    for the eggsperts

    by williewonk Jun 18, 2015 3:14 PM
    netlosstoo netlosstoo Jun 18, 2015 8:53 PM Flag

    So one of the Michael flocks that tested positive passed the quarantine period with no more positives ... so they get to live! ... POST has an impact update ... not near as bad as most thought. .. including me ... CALM is trading with a "bird flu premium" ... know your estimate of the premium and know the stock was trading at about $40 before the bird flu ... your bird flu premium should include 1) the bonus earnings for the next two years 2) the long term premium ... when your opponent trips in a race and you advance ... then you have a better chance of winning 3) a discount factor for the chance that CALM hens get infected at some point in the future.... $15 valuation of the bird flu premium seems about right given what we know now ... but there are a wide range of probable egg prices for the next yaer ... so we will see ... I think you can almost play the spikes in the egg prices over the next three months with your trading shares because of all the uncertainty ... but when the fall spike comes you will likely want to own CALM shares.

  • Reply to

    usda reports

    by netlosstoo Jun 15, 2015 12:30 PM
    netlosstoo netlosstoo Jun 17, 2015 1:45 AM Flag

    Des Moines, IA Tue. Jun 16, 2015 USDA Market News

    SHELL EGGS: Daily Midwest Regional Eggs

    Producer prices are 8 cents lower. Midwest delivered asking prices are
    steady. The undertone is sharply lower

  • netlosstoo netlosstoo Jun 16, 2015 2:10 AM Flag

    Island you can look at the decade ended 2002 and see CALM made less than $10m total. In the ten years ended 2014 CALM made over $600m. There are more dozens and more specialty but the profit per dozen has been way more in the last 10 years, especially for generics. Corn traded mostly in the $2 to $3 range in the decade ended 2002, while it has traded mostly in the $3 to $8 range for the last 10 years.

    The egg industry reacts quickly to rising feed costs. Older hens that lay an egg every other day might pencil out with $3 corn but might not with $6 corn. Those hens are disposed of early which results in reduced supply. Producers are reluctant to add capacity with $5 plus corn and have added very few hens over the last ten years. But look at the recent jump from 290 to 305m and all the intended capacity increases announced in the last year as producers see $4 corn and $1.50 egg prices.

    Rising corn prices now might detour further expansion in the next two years as the bird are repopulated from the flu. My fear is that the bird flu might mask an oversupply situation in the next year and that when all the egg farms are re-populated we will suddenly see 325m hens and 90 cent eggs at Xmas 2017.

  • netlosstoo netlosstoo Jun 15, 2015 4:28 PM Flag

    Stephens mentioned they were the lowest at the investor day and the low increased from $7.50 ... Also I think eggtrader mentioned stephens raised their estimate. .... good question on the vaccination ... my guess is the virus will mutate and likely be less strong this fall... but it also might be like the human flu virus and any vaccine might only be 50 to 90% effective ... but it only takes a few birds in one house to result in millions of hens lost ... so in my thinking the vaccine issue is a non-issue ... CALM either dodges the bullet or doesn't ... I think there were other parts of the corn belt that had some flooding ... ending stocks might not be higher this year ... but probably not too much lower either ... CALM does better with higher corn prices ... so i'd like to see $5-$6 corn in 2017 as the industry works its way out of the bird flu issue

  • netlosstoo by netlosstoo Jun 15, 2015 12:30 PM Flag

    dried egg inventories ... a leading indicator .. at lowest points since 2008

    Shell egg inventories down y/y but not as much as dried

    Shell egg demand indicator shows resistance from buyers to the higher egg prices

    IMO the most significant egg price test will happen in November / December when demand is at its peak ... any guesses on peek UB MW L? ... $3.50?

  • netlosstoo netlosstoo Jun 5, 2015 5:50 PM Flag

    Hmmm ….. now I’m confused

    today:
    I agree that they probably lost 60% of their hens. I never said they did not

    four days ago:
    Post's own chickens only account for 25% of the egg volume. they buy the rest. so if the lose 35% then they have lost 8%.

  • Reply to

    Demand Elasticity

    by netlosstoo Jun 5, 2015 11:47 AM
    netlosstoo netlosstoo Jun 5, 2015 4:40 PM Flag

    So you would think that if someone was unloading eggs below market (cost plus when market is high) it would always suppress the market price to the point everyone would eventually be selling at cost plus. But buyers are going to buy all they can at cost plus when the market is high and this might leave a higher demand for the remaining eggs and more profit for those selling at market. Kind of like you take the low road I’ll take the high road. Seems counterintuitive which makes me second guess my thinking on that.

    The seasonal demand really has me guessing for this year … when you think about the things you mentioned … no really good substitute for eggs … and on average only an egg a day consumed … I hesitate to print the egg pricing I’m thinking of for December 10.

    Now Jaq … you do NOT want to read this next sentence … but everyone should keep this in mind for next December, especially if CALM shares rise up to the $70 range … but if you listen to that Stephens webcast … Dolph mentions he was thinking the market may have been a bit over supplied for the holidays this year … but that was before AI … so be careful once supply is back … but then again you could have smaller lesser players with older facilities that just quit after being devastated by AI … keep it in mind as we ride north.

  • netlosstoo by netlosstoo Jun 5, 2015 11:47 AM Flag

    Interesting Q review and interesting response Island.

    Another question: When some in the industry clear /sell eggs using cost plus formulas, which can be significantly below market does that increase per capita egg consumption and artificially support the price for eggs sold on market?

  • Reply to

    stephens

    by netlosstoo Jun 2, 2015 3:24 PM
    netlosstoo netlosstoo Jun 2, 2015 11:22 PM Flag

    So CALM does break out co-pack dz in the 10Q .. for Q3 they produced 203.6m dz .. purchased from 3rd parties 79.5m dz ... of those 3rd party purchases 5.6m were co-pack ... I think CALM will only benefit fully from the AI spike for those 203.6m dz eggs they produce the rest are bought and sold on market with little to no profit ... the vaccination info was new to me too ... can't see how they can make producers wait for an untested vaccine ... I listened to the SAFM presentation too ... Joe seems to think food service / restaurant demand will be strong in 2016 ... but the same constraints around breeders that Joe talks about are applicable to the egg industry as well ... Joe is great to listen to ... he thinks egg guys are lazy in their approach to finding out how AI is getting into their flocks

  • Reply to

    stephens

    by netlosstoo Jun 2, 2015 3:24 PM
    netlosstoo netlosstoo Jun 2, 2015 9:58 PM Flag

    CALM spoke at the Stephens Spring investor conference ... they talked about 40 min mostly about AI and their contracts .... as you mentioned, CALM can raise prices on Specialty eggs ... one supplier was hit and CALM will go to the spot market to fill some orders ... CALM always loses a little bit (a few cents) when they go to the spot market to fill orders ... that's with or with out AI ... Analysts had a really hard time understanding how the hens would be repopulated gradually over about a year and a half ...once these facilities are approved to reopen ..which may be months ... go to CALM website ... events to listen .. Farha Aslam has been stephens ag analyst for many years ... she's pretty good.

  • netlosstoo by netlosstoo Jun 2, 2015 3:24 PM Flag

    ok ... Farha is doing a really good job of getting to the bottom of pricing with 3rd party suppliers and with customers ... largely what we have discussed with not much surprise... confirmation that specialty prices will rise as discussed as non-specialty are now higher than specialty... which I was not sure would happen

  • Reply to

    So How long does it take to repopulate?

    by eggtrader May 30, 2015 4:05 PM
    netlosstoo netlosstoo May 30, 2015 7:14 PM Flag

    Eggtrader … I tend to agree that it will be more than one and a half years before we see 300m U.S. hens again … so even after disinfecting every inch of your barns … does a producer want to place hens while the virus is still hitting others in the neighborhood? If I was a producer I’d want to wait at least 3 months with no new cases before placing hens … and what happens to all those pullets that were scheduled to replace hens lost that would have aged out over the summer? Is there a surplus of pullets now that can’t be placed? … also interesting to think about the concentration of hens in Iowa … its been cheaper to ship one dozen of eggs to CA than to ship 3.5 pounds of feed to CA to make a dozen eggs … or wherever … producers may be thinking about this differently now … lots of uncertainty and plenty of room for speculation

  • Reply to

    Husker66

    by netlosstoo May 20, 2015 11:49 AM
    netlosstoo netlosstoo May 30, 2015 2:30 PM Flag

    There will definitely be less sideline antics at NU games this year … What CALM would be like if private is an interesting question … I don’t think they would be much different … they never really needed to be a public company … if I remember right they only needed about 10 or 15 million to buy out the float back then… now they make that about every month … It’s probably affected us small investors more in a relative way as we had large portions of our portfolio allocated to CALM … certainly lopped a few years off projected retirement dates for some…. It really would have been quite an injustice had they been successful … I own shares of IBM too … but have to admit I’m just piggy backing Warren Buffet on that one … I was at the BRK meeting a year ago, which was quite the experience

  • Reply to

    The egg market is MWUB 2.59/doz now(record high)

    by eggtrader May 28, 2015 6:59 PM
    netlosstoo netlosstoo May 29, 2015 11:58 AM Flag

    I think eggtrader (and his buddies) have little birdies that tell him stuff …. These little birdies don’t write things down on paper … I’d love to be at the stephen’s conference to ask questions … I think we could ask better questions than Farha .. s/b really interesting … as far as cost plus, we know that all specialty eggs and co-pack are “cost plus” / “grain based” pricing, because the average selling price does not change much from q to q … we know that most non-specialty eggs are sold based on market because average selling price goes up and down with market … we know some portion of non-specialty eggs are sold on “grain based” contracts, because the spread between average selling price and UB market widens as the UB market quote moves higher as it did in the last q … but I think that portion of non-specialty eggs on cost plus is probably pretty small.

  • Reply to

    Husker66

    by netlosstoo May 20, 2015 11:49 AM
    netlosstoo netlosstoo May 29, 2015 10:18 AM Flag

    Hi Husker ... good to hear from you ... yep ... CALM was a $50m company back then .. and now its a $2.7B company ... currently benefiting from bird flu losses in Iowa ... was just in Nebraska last week ... and my niece just took a job w/ UNL ... not sure if the job comes with FB tickets ... there are less people on yahoo boards now ... but also less pumping and dumping types ... think most people are going to seeking alpha for info ... you should write a S.A. article on NUTR if you haven't all ready .... anyways ... Best wishes ... NL

  • Reply to

    The egg market is MWUB 2.59/doz now(record high)

    by eggtrader May 28, 2015 6:59 PM
    netlosstoo netlosstoo May 29, 2015 12:19 AM Flag

    Island ... CALM sells a portion of their eggs using "grain based" formula ... it's made some difference in pricing ... I think the 10q and 10k have a derivative financial instrument note that explains what they do with hedging and grain based pricing ... that note first showed up about two or three years ago if I remember right ... I wonder if they don't also purchase some of their third party eggs on "grain based" but that is just speculation ... the majority of eggs are still sold on market but I can't tell what % of sales are on "grain base"

  • netlosstoo netlosstoo May 29, 2015 12:04 AM Flag

    POST buying Michaels is like buying a Tesla at sticker price ...driving it off the lot ... and into the light pole across the street ... then realizing you forgot to buy insurance

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