Remember?

[cowman]

In my local maket today the main buyer was a local feedlot. Not a super big player but in that 5000 head range. Not the big boys from feedlot alley! Remember! This guy made the market today!
I know this guy personally: and I know he has been in some trouble when it comes to finances. He still believes and he still backs it up with his money.
Don't forget our locals who buy our cattle, who employ our people, who help us to survive! These type of guys are our freinds and neighbors: not just our customers! Support them!

[rsomer]

The 5000 head feedlot is going to provide the only competition to the big players this year when it comes to buying our calves until the border can open to live cattle trade. I am wondering how we ever ended up with the huge lots when a 5000 head lot would seem to me to be competitive. The 50,000 lots seem, at least to me, to be too big; that is too much financial risk, too much chance of disease going through way too many cattle, having to go too far to source silage and creating local shortages of barley, having to pay too much to get barley hauled in from too far away. Where is their advantage? Why do we have these 100 huge lots feeding the majority of the finished cattle in feedlot alley instead of more 5000 head lots located in communities throughout Alberta and Saskatchewan?

[kato]

Exactly...I don't think in the long run that the really big ones are sustainable. With all the new stronger environmental regulations coming out, smaller will be better in the long run.

[carebear300]

We don't have to wonder why the big lots are the in thing. Government and the big money men want big feedlots, easier to deal with then those pesky little operators that care about every nickel. When the banks give the same kind of breaks on interest rates to the smaller operator as the big operator their will be more of a chance for the smaller operations to succeed. Not quite that simple as I think out loud the packers would also sooner deal with the bigger lots. The whole system nowadays is big is better. Maybe enviornmental concerns will have an effect on the situation eventually.

[rusty1]

I'll tell you why the big lots work and why the little one don't seem to work. The big ones get a better grid pricing from the packer because they have enough numbers to come with enough cattle that are fairly close without the outlyers.
However the main reason is that any feedlot targets around a $18 to $20 net margin per head year in year out. They would really be happy with a consistant net margin of $25 per head.
So do the math a 5000 head lot rarley does 2.5 turns a year. So 5000x2x$20= $200,000. Or 50,000 head x 2.5 x $20= $2,500,000.

[max]

Why are they big? Just like the grain farmer, economy of scale. they believe the more head or acres put through the more money will be made. Maybe where the money is made is on volume purchasing and marketing. Don't get me wrong I'm in favor of feedlots of all sizes.

[rsomer]

I am seriously considering returning to finishing out my own calves like we did years ago. I see by the posts here one person believes small lots may have a future but the rest point out the competitive advantages of the supersized feedlots. At todays prices for fats and feeders there is enough money feeding calves to cover the feed costs but not to pay the yardage. It is easier to gamble on fat prices going up in the New Year if you are feeding the calf yourself than if you are paying a big custom feedlot yardage and the extra costs of trucking and so forth. I guess the question is can the big feedlots offer me enough value to more than cover the extra costs associated with feeding my own calves in a custom lot.

[cowman]

I've always fed my heifers and smaller steers through the winter. Got tired of taking 10-15 cents less for heifers. Now I don't feed them to finish. Just to put on a few pounds and survive the winter...grass hay and some barley, if the price is right. If the grass is good come spring I might grass them.
Well it is amazing how that 10-15 cent discount disappears the older they get!
If the feedlots want big steer calves in the fall that's what I give them. And if they want big well grown yearling heifers that's what I give them!
Personally I think a 5000 head lot is about the maximum that should be allowed. After that the pollution gets to be too much! If you don't think that is true then build your house beside one. The stink and the flies will soon convince you. I can just imagine how sweet it must be in feedlot alley?