Can a feedlot make any money at these prices?

[Son of Butch]

Feeder sales this week Oct 9 & 10th in Minnesota.
Wednesday
46 holstein steers 315 lbs 167.00
68 holstein steers 733# 124.00

Thursday
78 black angus steers 354# 222.00
48 blk & red angus 389# 221.25
196 black angus strs 443# 213.50 [one buyer took all 196 head and that takes writing a $185,377.78 check]
30 black steers 444# 203.50
18 charolais steers 544# 166.00
66 red steers 603# 165.00

The charolais looked to me to be the best buy of the day...BUT...
Is there a enough margin for profit this year in feeding any of these steers?

 

[bigbull338]

from the weights you have listed the q you should be asking is can the backgrounders make any money at those prices.because most everything you have listed has tobe backgrounded to 750 or 800lbs.then go into the feedlots.the 68 7 weight steers are the only 1s ready for the feedlot.

 

[Howdyjabo]

Its still working good for the backgrounders with a hedge-- its the feedlot that is getting the bad end of this if fat cattle don't start moving too.
I'd hate to be backgrounding without the hedge. Come selling time it could be a trainwreck based on cash price.
You have seen where feedlot placements are the lowest ever dramatically. I kinda figure they aren't buying hoping to stick it to backgrounders latter if fat cattle don't go up over the winter.

 

[bigbull338]

but jabo you know if the feedlots try to hold out to long on buying feeder cattle.that they will be forced to buy sooner or later from needing the cash flow to keep up with their fixed costs.or quit feeding cattle.

 

[denvermartinfarms]

To answer you about those particular cattle, it depends on who you are, I wouldn't take the risk for what the profit would be. But I have a friend that buys cattle around here and owns sevarel feed yards in Co, he buys anywhere from 300lbs to 700lbs and feeds them out. He turns between 1000 and 1500 head a week, so a 25$ or so profit is pretty good to him.

 

[js1234]

Didn't try all your sets but the very first pen of beef steers worked decent against my figures. The last set was just ok. Didn't try any of the others. Holsteins would obviously be calf feds and look to cost plenty. I'm assuming no programs and didn't take any sort of grid into account. Going to grass for a few hundred pounds would be better but that first set at #350 I wouldn't be afraid to try on.

 

[jasonleonard]

js1234....You seem to have a wealth of knowledge in the feeder cattle and feedlot issues. I can see where you will be valuable to other commercial guys on this forum.
I am just a small cow/calf and backgrounder in PA.
If you don't mind me asking, how many do you feed, and do you feed them all at one yard, or different yards.

 

[denvermartinfarms]

Didn't try all your sets but the very first pen of beef steers worked decent against my figures. The last set was just ok. Didn't try any of the others. Holsteins would obviously be calf feds and look to cost plenty. I'm assuming no programs and didn't take any sort of grid into account. Going to grass for a few hundred pounds would be better but that first set at #350 I wouldn't be afraid to try on.

How big did you figure on getting those 350lb cattle?

 

[js1234]

1250. Think that would let them slip into Oct. Fats.

 

[js1234]

js1234....You seem to have a wealth of knowledge in the feeder cattle and feedlot issues. I can see where you will be valuable to other commercial guys on this forum.
I am just a small cow/calf and backgrounder in PA.
If you don't mind me asking, how many do you feed, and do you feed them all at one yard, or different yards.

Our main business is ranching along with a little farming and order buying. We do feed a fair amount of cattle at a couple different yards though. Not sure about the wealth of knowledge part.

 

[iowafarmer]

They aren't making money actually feeding the cattle. The big guys are making it on the board. Know their costs to the penny when everything aligns on the board to make money they lock everything in from feed costs to purchase and sell price. Lots of ways to look at it depending on who you're talking to, what your position is. Some guys make it look bad on taxes but good to the banker. All about perspective. Granted one wrong step and you can loose big. It's quite the game they play. Takes some serious balls to play with the amount of money these guys do. As always there are some making money and some loosing money. The good ones make money and the bad ones loose money.

 

[ibetyamissedme]

They aren't making money actually feeding the cattle. The big guys are making it on the board. Know their costs to the penny when everything aligns on the board to make money they lock everything in from feed costs to purchase and sell price. Lots of ways to look at it depending on who you're talking to, what your position is. Some guys make it look bad on taxes but good to the banker. All about perspective. Granted one wrong step and you can loose big. It's quite the game they play. Takes some serious balls to play with the amount of money these guys do. As always there are some making money and some loosing money. The good ones make money and the bad ones loose money.

It does take some big balls, but in reality I do not fill a lot unless there is a profit on paper simple as that. Everything else is just a gamble, there is where the balls come in, I use brains I don't gamble. Either they will make me money on paper or they don't get unloaded here.

 

[js1234]

They aren't making money actually feeding the cattle. The big guys are making it on the board. Know their costs to the penny when everything aligns on the board to make money they lock everything in from feed costs to purchase and sell price. Lots of ways to look at it depending on who you're talking to, what your position is. Some guys make it look bad on taxes but good to the banker. All about perspective. Granted one wrong step and you can loose big. It's quite the game they play. Takes some serious balls to play with the amount of money these guys do. As always there are some making money and some loosing money. The good ones make money and the bad ones loose money.

It does take some big balls, but in reality I do not fill a lot unless there is a profit on paper simple as that. Everything else is just a gamble, there is where the balls come in, I use brains I don't gamble. Either they will make me money on paper or they don't get unloaded here.

Exactly. I have speculated some and will continue to. That said, the vast majority of what I buy to feed has a profit in them at current levels when bought or they aren't purchased. It's fashionable to say there's no profit in feeding cattle at these levels, I guess the 300 yearlings I bought today and locked a profit up on didn't get the memo. This is still a very risky business but can be managed and the risk exposure mitigated much more than I think a lot of people appreciate who aren't directly involved and some that are. Cattle feeding isn't for the weak-hearted but it's not exactly the guaranteed route to the poorhouse some profess it to be.

 

[Dave]

I was checking out the prices from last weeks sale on Western Video. I saw one lot that was two loads of steers with a base weight of 750 pounds brought $170 and change. They claimed that they graded real well in the past but someone better have a mighty sharp pencil on that one.

 

[Stocker Steve]

Feeder sales this week Oct 9 & 10th in Minnesota.
Is there a enough margin for profit this year in backgrounding any of these steers?

Maybe. Depends on ADG and death loss and LRP and weather and price of forage and ...
I bought a load two weeks ago. I paid $187/cwt for 322# bawlers, but I don't buy the big numbers, so I still don't make $25,000 a week.
But, that is OK since the wife has a hard time receiving more than 150 head at once.