Well is there any profit to be made in the cattle market now. Corn just exploded upward in price. Hay is high. Anybody feeding out cattle now are definitly losing tons off money every day. Looks like cattle are a bust this year. Im really surprised cattle are selling as good as they are. Feeder cattle that is. What do you guys think. Looks like a tough road ahead.
Profit in the cattle industry
- Thread starter Agboy
- Start date
bigbull338
Well-known member
well the cattle market will turn when the feedlots get so empty.when they have alot of empty pens.they will fill them weather corn is high or low.bexause you cant make money on empty pens.Agboy":2hr517uz said:
backhoeboogie
Well-known member
We'll have surplus hay this year. Probably 600 round bales of coastal. If cattle go that cheap, I'll keep buying. I jsut don't see that happening.
2005 we got rain in early May and then nothing until September. We had many 100 degree days after that September rain and nothing else until Late January. It was the absolute worst drought ever recorded, locally. Everyone sold out or culled to the bone.
2006 the drought was not nearly as bad but it was widespread. Everyone dumped all across the U.S. so prices fell.
With all the dumping in '05, then major dumping in '06, there is a vast shortage of cows. I expect practically all heifers to be retained or else selling for a premium. Especially since the heifers will be coming from cows that were not culled out.
2005 we got rain in early May and then nothing until September. We had many 100 degree days after that September rain and nothing else until Late January. It was the absolute worst drought ever recorded, locally. Everyone sold out or culled to the bone.
2006 the drought was not nearly as bad but it was widespread. Everyone dumped all across the U.S. so prices fell.
With all the dumping in '05, then major dumping in '06, there is a vast shortage of cows. I expect practically all heifers to be retained or else selling for a premium. Especially since the heifers will be coming from cows that were not culled out.
bigbull338
Well-known member
i think most feedlots clear $80 to $100 a hd on therir fed cattle an that pretty dang good.if the pens stay empty to long the feedlot will go broke anyway.so whats the differance.somn":32nf5alm said:
VanC
Well-known member
somn":3vazx930 said:
Are you saying they wouldn't? I don't understand. How can they make money without cattle?
I guess you will need to show me where I said feedlots will make money without cattle in the lot. I asked bigbull338 why he thought empty feedlots for very long will result in them going broke.VanC":22mblvxj said:
bigbull338
Well-known member
it takes common sense to know that if they sitt empty.they would go broke.because they dont have cashflow coming in.an they have cash going out to pay their payrolls an make their bank payments.alot of times during high feed prices an high feeder prices they barely clear $20 a hd.surely your not going to sitt there an say your pens could stay empty.an you wouldnt go broke in less than 6 months.i dont think your completely debt free.somn":3ttmbkxb said:
Yes I am going to sit here and tell you that I would rather have my pens sit empty for a year and borrow money to pay the bills instead of losing money on the cattle and borrowing the money to pay my bills. When you lose you lose. Two negatives don't make a positive. Atleast I've never seen it happen. If I pencil a loss even after buying a bottom on the board why do it. Do you have any idea what happens to the feeder cattle market when the large feed lots hold off buying feeder cattle for a couple months due to the high price? I will tell you they fall and fall fast. After six months of that the lower feeder calf price will allow the feedlot owners turn a profit in the feedlot. The only loser will be the cow calf man. I can't imagine why anyone would think the way you do. If I understand you correctly you think if the feedlot only loses $20.00 per head it would be smarter to work in volume and fill every yard up instead of having the pens empty and not losing any dollars per head. Maybe that works where you are from it doesn't here. Buying at a loss is a loser everytime.
bigbull338
Well-known member
well you may think its smart to borrow money at 12 to 14% int,but in the end you will be behind the 8 ball all the way.an take maybe 5yrs or more to come out.but id bet youd be close to broke before your pens was empty.i bet if you had to give $200 a ton for feed, you wouldnt last 6 months before you called it quits.well ive been there with $200 ton feed an i kept going.it didnt break me.somn":2otylpwj said:
When you have lost money on the calves in first place you are now paying interest on the loss and your bills how smart was that. 12 to 14 percent interest where on earth are you paying that much interest to a bail bonds man. If you paid 450 dollars for a feed bill per calf good for you the calves must have been free or real cheap. Like I said Buying at a loss is a loser everytime.bigbull338":g2a62enu said:
bigbull338
Well-known member
come here.your the 1 that says you wouldnt go broke letting everything set.an we both know thats a bunch of bull.you cant turn a big profit on a feedlot an you know it.nor can you sitt there an let it stay empty.a stocker man is lucky if he makes .50 cents a calf a day while he has them.an you an i both know that.if my memory is correct your a backgrounder.an i know they are lucky to make $50 a hd on their calves.somn":se739m1v said:
Bigbull338 I see no need to further this discussion with you. You have no idea who I am or what I do. This is the last time I will say it buying at a loss is a loser everytime. You however seem to think that if you are going to lose money in the feedlot with what you are doing the answer is to buy in volume. Good plan. I'd rather borrow the money to pay my operating expenses than to borrow the money to pay my operating expenses plus the $20.00 per head loss. The only people I've ever seen do what you are talking about are lawyers and doctors. They hope for a loss for the tax deduction. They make the claim they are helping the community by spending the money here in the community instead of Washington. Maybe they are but I'm involved in the cattle industry to make a profit not a loss. Good luck with your master plan.
bigbull338
Well-known member
well wwe have differant ideas on things.an in my eyes you havent proved me wrong.as you can tell im very stubborn an i dont backup less im proved tobe wrong.ive been figuring things like this off the top of my head since i was 7yrs old.so to me its fun to sitt here an butt heads with you all day long.somn":gg4nix0f said:
I'm not trying to prove you wrong I was just trying to understand your statement about feedlots going broke by sitting empty. You still haven't explained that yet. The way I understand what your saying it is better to lose 20 dollars per head plus expenses instead of expenses only. Crazy Texas math I guess. A loss is a loss but losing twice is worse in my book. Maybe instead of figuring things off the top of your head you should get a big chief tablet and do it on paper once and a while you might have a bit more success in the industry.
bigbull338
Well-known member
ok someone needs to read what is said.it just dawned on me that you thought i said lose $20 a hd on fed cattle.when i did not say that at all.read my lippsi said feedlots make between $20 an $80 a hd on cattle going to the packers.you need to watch what you say to people.somn":1khzht1m said:
