Cattle Feeders' Choices Limit Their Profitability
US - With cattle feeders turning a profit only a third of the time during the last four years, some market watchers think more common sense and rational thinking are needed in the feedlot.Doud said the cattle feeder only needs two raw materials - feeder cattle and corn - to make a slaughter-ready animal.
When the price of one goes up, the cattle operator must pay less for the other or have finished product prices rise as well, or he will experience a negative margin, Doud said.
From 2006 to 2007, the price of fed cattle went up, but not enough to counter gains in other input costs, Doud said. As a result, cattle feeders lost money in all but three months last year.
Source: Agriculture Online