Feedyard Question

[Soggy Bottom]

I have been interested in a owning a small feedlot type setup for sometime. I have the land to to operate a 1000-2000 head facility. This would be buying small 2-3 weight calves thru the sale barn and selling around 7-8 weight. I know a lot of variables go into profit margins. Is there a goal per head a producer can shoot for on this type of operation? Once the facility and equipment is paid for would $50-$100 per head profit be out of line? Thanks for the input.

 

[WFfarm]

Why would you sell at 7-800lbs? They are only half grown and a few hundred above weaning weight. Wouldn't there still be profit in them to finish to 1200-1400lbs? I'm just asking out of curiosity, we just raise feeder calves so I don't know much about the downstream businesses.

 

[pricefarm]

Shew why would you want to buy such small calves ? Seems like buying 400-500 pound calves would be much easier?

 

[SBMF 2015]

A father son back grounding team not far from me. Buys 3 wt blk strs and grows them to 7-8wts. I think they have room for 2000-2200hd. They sell around 4-8 hundred at a time, and hold the record for the largest check written by the local sale barn.
They grow them hard, get most of the goodie out of them, then pass them on to someone else to finish.

 

[cjmc]

I have been interested in a owning a small feedlot type setup for sometime. I have the land to to operate a 1000-2000 head facility. This would be buying small 2-3 weight calves thru the sale barn and selling around 7-8 weight. I know a lot of variables go into profit margins. Is there a goal per head a producer can shoot for on this type of operation? Once the facility and equipment is paid for would $50-$100 per head profit be out of line? Thanks for the input.

Adding 500 lbs and a goal of 75 dollars/ head means the value of gain is $0.15/ pound higher than the cost of gain. I don't think that's unreasonable if you are buying small groups & putting together semi loads. Yardage is typically considered the operating cost of a feedyard & is generally 0.3-0.35/h/d in my area.

 

[cjmc]

Why would you sell at 7-800lbs? They are only half grown and a few hundred above weaning weight. Wouldn't there still be profit in them to finish to 1200-1400lbs? I'm just asking out of curiosity, we just raise feeder calves so I don't know much about the downstream businesses.

Generally speaking- feeding up to that 800ish pounds allows people a way of marketing their home raised feedstuffs (hay) as the diet is generally about 50% roughage. After they hit this weight for most producers 90% of the diet is purchased ingredients (corn & distillers). The fat cattle market is also becoming more & more a game only the big boys can be profitable in (20,000 head and up).

 

[BFE]

The only thing I don't like about your plan is, around here, there's very little financial advantage to taking calves above 600-700 lbs, unless you're feeding to finish. Based on a local market report, the difference between a 500 and 800 lb steer is $90. Seems like a lot of gain for few dollars to me. Be flexible, may be better to move at a lower weight and deal with more head in a year. Seems like I make my best money at 550-600 lbs. Most weight I can get before the price per lb drops off. Your market may be different though.