prices
- Thread starter desmond
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PLR
Well-known member
Calves have more potential. You can raise a calf up to a good breeding animal or Up to a beef animal. Cows dont have as high a meat value as calves cause of their age and poorer quality carcasses. Also Cows are often brought to the sale barn because they are Old, mean or Damaged. so most of them dont have a value as a brood cow anymore.
Hope this helps.
Shelby
Hope this helps.
Shelby
greenwillowherefords
Well-known member
You can buy a 400 pound calf at say $1.20 per pound, feed him to slaughter weight, and have less money invested in him (providing he has halfway decent growth genetics) than you would if you purchased an 800 pound steer at say $.90 per pound and fed him on to slaughter weight.
Keep in mind the price of a finished steer is what meat packers figure is the maximum amount they can pay and still make a profit. (Or so they say.) In a way that is a fixed price. Let's use a 1400 lb. steer at $.80/lb for a $1120 value.
Cattle feeders are bidding for calves against other cattle feeders. They also pay the maximum amount they can pay and still make a profit.
Cattle feeders make money by putting weight on cattle for less than what they get when they sell that animal. Let's say it cost a feeder 50 cents in feed/labor/equipment/etc. to put 1 lb. of weight on an animal. With a lighter weight animal their is more pounds a cattle feeder can put on to get to the finished weight. In other words their is more of an oppertuinity to make money. Because of this, they can pay more for a 400 pound animal than they can for a 900 pound animal.
They can pay $1.25 for a 400 lb calf ($500) put 1000 lbs on it for $500 (1000 lbs times 50 cents/lb.) and make a theoretical $120.
If they are buying a 900 lb. steer and paid $1.25 for it for a total of $1125 you would already have more money into that animal than you could sell it for. But if you pay say 90 cents for that animal you buy it for $810 put 500 lbs on it for another $250 for a total input of $1060, this would give you a profit of $60.
The reason the feeder can afford to take a smaller profit margin on a larger steer is they will only have to feed that animal for 1/2 the time they would the lighter steer, thus being able to run twice as many animals through his lot.
On the flip side, if you paid 80 cents for a 400 lb. calf and sold it at 1400 lbs for 80 cents you could theoretically make $300 on that animal. Feeders would love to pay that, but with a limited number of calves for sale feedyards end up bidding against each other and end up paying the most they think they can pay and still pencil out a profit.
I don't know if I explained that very well, but that is basically how it works. And for the rest of you, I know those numbers may not be real world actual numbers so you don't have to pick apart my figuring. But if you have some actual numbers from your place you want to share, I would be interested in seeing them.
Cattle feeders are bidding for calves against other cattle feeders. They also pay the maximum amount they can pay and still make a profit.
Cattle feeders make money by putting weight on cattle for less than what they get when they sell that animal. Let's say it cost a feeder 50 cents in feed/labor/equipment/etc. to put 1 lb. of weight on an animal. With a lighter weight animal their is more pounds a cattle feeder can put on to get to the finished weight. In other words their is more of an oppertuinity to make money. Because of this, they can pay more for a 400 pound animal than they can for a 900 pound animal.
They can pay $1.25 for a 400 lb calf ($500) put 1000 lbs on it for $500 (1000 lbs times 50 cents/lb.) and make a theoretical $120.
If they are buying a 900 lb. steer and paid $1.25 for it for a total of $1125 you would already have more money into that animal than you could sell it for. But if you pay say 90 cents for that animal you buy it for $810 put 500 lbs on it for another $250 for a total input of $1060, this would give you a profit of $60.
The reason the feeder can afford to take a smaller profit margin on a larger steer is they will only have to feed that animal for 1/2 the time they would the lighter steer, thus being able to run twice as many animals through his lot.
On the flip side, if you paid 80 cents for a 400 lb. calf and sold it at 1400 lbs for 80 cents you could theoretically make $300 on that animal. Feeders would love to pay that, but with a limited number of calves for sale feedyards end up bidding against each other and end up paying the most they think they can pay and still pencil out a profit.
I don't know if I explained that very well, but that is basically how it works. And for the rest of you, I know those numbers may not be real world actual numbers so you don't have to pick apart my figuring. But if you have some actual numbers from your place you want to share, I would be interested in seeing them.
