by Carl Sackreiter
Cow/Calf & Feedlot Nutritionist, Ag Partners
p:(651) 732-1439
m:(507) 421-4942
It’s hard to believe that fall feeder prices are remaining strong. With the local prices on yearling colored cattle in the high $1.40 and low $1.50’s, it is often a question to think about what we should pay for these calves coming into the feedlots. We look out to the April-May board and the prices seem to hold their own and will remain strong. Current prices on fat cattle are down, but are rebounding. We did hit that late summer market slump before Labor Day and are slowly working our way back. I’m surprised to see the competitiveness in the market for yearlings. Lower weight calves I feed will remain strong as producers may switch to feeding lighter weight calves and finish them a little later than they normally want to.
The Holstein side of the market is going to follow about $25 behind the colored cattle. There has been some good buys on 500 lb. Holstein steers and taking them to finish. With the price on corn remaining low, will see the need for feeding more corn in the rations. We won’t see above $1/lb. price on Holsteins until October. It is better than the $0.80’s for prices. I don’t for see the spread between colors and Holsteins getting any tighter in the near future.
The demand for exporting beef overseas is going to continue to stay steady. Currently, China’s agreement with U.S. Beef is going to be highly regulated with what we send over there and will continue to monitored and negotiated. It will be a long process to see how everything shakes out with JBS and Brazilian government over allegations of insider trading and giving bribes to Brazilian government officials.
To finish up, I do believe that there will be some profitability in the feedlot sector. Just watch what you pay for them and what you put in for break-even. Locking in your input costs will help you out in the long run and if you can lock in a sale price, that could help your overall profitability of your operation. I have a quick break-even spread sheet available to help figure out your costs and your profitability of each group of cattle. I will also be putting a tool on the website where you can input your own prices for your operation so you know what you have for profitability. That will be coming soon!
See this article from beef magazine on demand for feeder cattle:
http://www.beefmagazine.com/market-reports/demand-feeder-cattle-continues-strong
