Straight to feedlot

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denoginnizer

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Anyone retaining ownership and sending there cattle to the feedlots? I missed the presentation but the other night a feedlot fellow came out and gave a speach on how much money everyone around here was loosing by not retaining ownership. I am trying to figure out if it is such a money making deal why he was willing to let us in on the deal? Maybe he just felt bad about making so much money off us over the years :lol2:
 

1982vett

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Hmm, sound like he may be looking to perform a service for a fee instead of risking his own money. Keeps his feedlot in business without the massive losses.
 

dun

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Through the years we've retained ownership on some, partial ownership on some and sold most outright. Some years we've made good money at each of the methods, some years we lost on one method and made money on the others.
 

mnmtranching

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Of course the only reason a feedlot is promoting retained ownership. Is to guarantee their profit and giving you the risk. If all goes perfect you will profit [slight]. Can't blame them, the way things are we should all want to transfer the risk and assure ourselves of a profit.
 

kenny thomas

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Most feedlots work on borrowed money. With the economy the way it is some are having a hard time borrowing enough to keep things going. With your cattle they are assured a profit because they charge a fee per day and per pound of gain. Whether you make money or not they know what they are going to make.
Cattle that gain well and grade choice or prime might still make money. Cattle that do not will almost always loose money.
 

Alberta farmer

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Look at the cost the custom feedlot is charging you for the cost of gain? The feedlot guy is actually quite right...a lot of money is being lost by not feeding out that calf....and he wants to get it!
Not sure what the going rates are right now but last year in my area they were quoting around 75 cents/lb. of gain? If a steer gains around 3.5 lbs. a day that means about $2.63/day? With a 6.5 to 1 conversion rate on barley his feed cost was about 54 cents/lb of gain or $1.89/day. So he gets about 74 cents a day to pay for processing/yardage etc.? Is that a fair price?
If that 600 lb. steer calf was worth $1/lb. in November and he takes him to 1300 lbs at a rate of 3.5 lbs/day, he will be paid 200 days X $.74 or $148? You on the other hand will have $600 in the calf, $378 in feed, and $148 for his yardage/profit(plus you get to carry the interest costs). You will have $1126(without death loss/vet cost/interest) in your calf. With a fat price of 82 cents you will recieve $1066! You didn't make any money but the custom feeder did.
 

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