retaining ownership

[jt]

we had a guy from one of the feedyards out in the pan handle of Oklahoma talk on retaining ownership. i was not there, but one of my friends who was said it sounded really good. to me personally, it sounded too good to be true. like, instead of getting $500 for your 5 weight or so calf, he said you could get $800 for one fed out. that is 800 cleared after feedyard expenses.

from some of you guys who do this, what are the pros and cons, pitfalls, etc involved with this?

thanks

jt

 

[dun]

we had a guy from one of the feedyards out in the pan handle of Oklahoma talk on retaining ownership. i was not there, but one of my friends who was said it sounded really good. to me personally, it sounded too good to be true. like, instead of getting $500 for your 5 weight or so calf, he said you could get $800 for one fed out. that is 800 cleared after feedyard expenses.

from some of you guys who do this, what are the pros and cons, pitfalls, etc involved with this?

thanks

jt

That number may be a touch inflated. Break evens are around 88 cwt, how heavy would the calf have to be to cover the feed and still make 800 bucks a head?
One sick calf or calf death, animal not gain as well as it should, feed costs go up, slaughter prices go down, are all risks. Those are the risks of retaining ownership for an adfditioanl 150 days or more. We typically get around 150-200 more in our pocket on retained ownership, that's with the premiums for CAB/Sterling Silver and age source verified. Some years we do better some years worse. If the feedlot doesn;t own an interest in the animal he has much less motivation to be econimical, after all, he's primarily selling feed to you plus the managment to slaughter

 

[traderaaron]

Is the weight/class of your cattle undervalued relative to the market and relative to what they would be if feeding them? If so then retaining ownership of them is something to consider. If the market is paying too much for your class of calves then it wouldn't make much sense to feed them into a likely lower valued or undervalued class of cattle. Now, you might consider selling steers and feeding the heifers or selling the steer calves and buying undervalued heifer calves to feed at a net positive cash position.

 

[plumber_greg]

I've never seen that kind of premium on mine, more like $50-100 a head, one year $20. I feed steers and heifers in the same lot and put an average price on them when they go to the feedyard. I have never, so far, lost what I feel I would have gotten for them sold as feeders, but always thought I had a chance to get more feeding them out. The feedyard sends me a monthly bill and I do nothing, because I financed the feed there. The hardest part is getting a full pen and then skipping a fall check for your calves until you get a check in the spring. I probably will always retain ownership from now on. I got tired of buying good bulls and culling cows and then not getting paid for my efforts. Remember, if you are not raising the right kind of cattle to feed, you are gonna' be in trouble quick. You will find out why the buyers cut that steer off and sell alone, and maybe that calf that you feel is just as good as anyones' may not be. It's is an education. gs

 

[dun]

I've never seen that kind of premium on mine, more like $50-100 a head, one year $20. I feed steers and heifers in the same lot and put an average price on them when they go to the feedyard. I have never, so far, lost what I feel I would have gotten for them sold as feeders, but always thought I had a chance to get more feeding them out. The feedyard sends me a monthly bill and I do nothing, because I financed the feed there. The hardest part is getting a full pen and then skipping a fall check for your calves until you get a check in the spring. I probably will always retain ownership from now on. I got tired of buying good bulls and culling cows and then not getting paid for my efforts. Remember, if you are not raising the right kind of cattle to feed, you are gonna' be in trouble quick. You will find out why the buyers cut that steer off and sell alone, and maybe that calf that you feel is just as good as anyones' may not be. It's is an education. gs

I forgot to inlcude that in the pros. If you don;t feed them out you won;t have carcass data so you won;t know how your genetics actaully work in the ffedlot. If you're not intersted in the carcass data you might as well sell them as weaners rather then finihsing them.

 

[Stocker Steve]

More risk as some have already said. Aside from performance - - you also have more time and more pounds to be effected by the market going up or down . Unless you have a lot of play money there should be some kind of risk protection....

What did they recommend for risk protection?