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.
calendar icon 14 January 2008
clock icon 1 minute read
Cattle market analysts say producers seem to continue painting themselves into a corner, unable to turn a profit for any length of time. A chart released by Gregg Doud, agricultural economist for the National Cattlemen's Beef Association, shows profitable cattle feeder performance only about a third of the time over the last four years.

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
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