feedlots?

[cowman]

Just taking numbers from the Alberta Livestock reports, on Feb. 24th they listed fats as selling at $85-$89 so say an average of $87? Or $1131 for a 1300 lb. steer?
Feeder steers, listed on Oct. 28th/05 were $1.17-$1.27 at Ponoka, so say average of $1.2225? Or $916.88 for a feeder steer?
Now that works out to a gross profit of $214.12? For 550 lbs of added weight! Now I realize that calf won't be there yet but if these fat prices hold I would think a lot of feedlots are going to be taking a bath...cheap barley or not! Either that or they can feed cattle a lot cheaper than anyone realizes?
If my figures are anywhere close to being accurate and it costs around 60 cents a pound to add weight then would it be reasonable to say the feedlot will have $330 plus $916.88 for a total of $1246.88 in that 1300 lb. steer? For a loss of $115.68 per fat steer?
Maybe the guys who sat this one out were the smart ones?

[wilagro]

the drop in prices in the feeder market right now likely reflects your thinking cowman.

[Horse]

Cost of feed is more like 32cents/ lb And mabey less depending on how many tonne to the acre of silage and mabey if there is a lot of tough bly.As for yardage well I think the range can vary a lot but you know we all live on depreation once in a while.

[wd40]

If one figures his honest variable costs in a feedyard, yardage costs will be closer to .40 than not.

[cswilson]

Just closed a pen of steers and total cost of gain was .52/lb. If you pick up some money on the grid there are still cattle that will work on feed.

[IAMTHEMOLE]

Does that inlude interest? If it doesn't, you could have made money paying down any debt you may or may not have to save interest expense.

[cswilson]

Of course it includes interest-just was pointing out what an actual close out came out to.

[blackjack]

...i did my own little calculation...

...750lb str 600 lbs = 1350 lb
50 shrink
1300 lb sel wt

600 * 72cents/lb gain = 432 917 = 1349 total cost

600 * 52cents/lb gain = 312 917 = 1229 total cost


sold at 1131 dollars

senario #1 = 218/hd $ loss

senario #2 = 98/hd $ loss

...in my opinion if the the market stays like this for the next 3 months ...look for the calves to be a whole lot cheaper next fall...

[grassfarmer]

That's going on the assumption that feedlots are in business to make money on every calf. They are really in the business of selling grain and silage to guys getting cattle custom fed for the most part. If we are to believe Cam Ostercamp (which I do) the Canadian feedlot sector has averaged negative $20 per calf profit over the last 20 years. I read yesterday that US lots had done better - they averaged $3US profit over 20 years! This whole sector seems to be built on the concept of saving people facing large tax bills. All the doctors, surgeons and likely oil men head into December facing paying top rate tax on their huge earnings - buying calves and risking losing a little seems a far better bet.

[grassfarmer]

grassfarmer, they are still limited to the number of cattle they purchase if the cattle aren't their main source of income.