Cost of Gain Up in Kansas Feedlot Report

US - According to the latest Kansas State University’s “Focus on Feedlot” report, cattle performance on cattle sold during recent months was generally similar with a year earlier. However, cost of gain was dramatically above 2011’s. According to Livestock Marketing Information Centre (LMIC) estimates, red ink on closeouts has increased during recent months and is now the largest since January 2009.
calendar icon 14 June 2012
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In April closeouts, steers were on-feed an average 166 days, 7 days longer than last year. At 161 days, heifers sold in April were on feed 16 days more than in 2011. Quite a few lightweight heifers entered feedlots in 2011 because of drought and those were reflected in April sales. Average daily gain (ADG) was slightly better than a year ago for steers but slightly worse for heifers (steers averaged 3.37 lbs. and heifers 3.08 lbs. per day).

Importantly given high feedstuff costs, the dry matter amount of feed required per pound of gain for April closeouts was improved compared to a year ago, that is fewer pounds of feed were required during the finishing phase than in 2011. Average feed required per pound of gain for steers sold during April was 5.92 and the heifer number was 6.13.

Feedlot cost of gain has been very high. Feedlots reported average steer cost of gain for April closeouts at $107.25 per cwt., nearly $5.00 more than a year ago. Steer cost of gain has been above $100.00 per cwt. for nine consecutive months. Based on feeding-out a 750-pound steer in a commercial Southern plains feedlot, LMIC estimated that an average steer sold in April lost about $160.00. May losses were just below $200.00 per steer sold.

Projected feedlot cost of gain may moderate some if corn prices continue to slip, but will remain high by in April. In mid-May feedlots estimated cost of gain for animals entering the feedlot at about $104.00 per cwt. Those projections were based on corn priced at $6.68 per bushel and ground alfalfa hay at a record high $230.80 per ton. LMIC estimated that average quality 750-pound steers placed into a Southern Plains feedlot in May will have a breakeven sale price to cover all costs of production (including the cost of the feeder animal) of about $136.00 per cwt., which is above price levels indicated by the futures market.

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