callmefence
Keyboard cowboy
Seeing some new small USDA facilities show up in central Texas. Any chance the good profits everyone complains about the big 4 making is the thing attracting new startups....
Hopefully they get a piece of the pie, but smaller economies of scale mean smaller profits.Seeing some new small USDA facilities show up in central Texas. Any chance the good profits everyone complains about the big 4 making is the thing attracting new startups....
Thanks for the replyGreen yearlings are yearlings that have been running on grass or wheat pasture and haven't seen a lot of grain. They are learn and desirable to the feed lots because they are at a point where they have the frame and age that once you get them started good you can really push them hard.
We used to be small by western standards, but we kept between 400-600 hd on feed depending on the time of year.
You are correct, feeding cattle is definitely a numbers game.
Sounds like your on to something, growing those calves out. If more people would start doing that, the cattle feeders would pay more.
I understand what you are saying. The other side of the equation is the cow/calf folks like we are that do wean, vaccinate and background our calves prior to selling. Most times there isn't a major incentive to do so as the markets usually drop for all calves green or otherwise when these are ready to be marketed. Sure they will bring more on that day than the ones not value added, however the loss doesn't really make the so called premium all that beneficial. The cow/calf folks take a lot of the risk out for the next folks up the chain at an expense to themselves. Bottom line without the cow/calf producers the chain is not possible. If something were to change and the big packers really do get control of the supply chain then the feeders looks like to me could get hit by them and essentially be in a situation similar to the current cow calf producer only a little worse offWe've both seen it on CT time and time again; " wean them in the morning sell them in the afternoon ". A lot of producers either don't have the space or just don't want the risk of back grounding their calves. Green yearling strs always bring a premium.
If a 800lber brings $2 =$1,600. Figure a $1 a pound for another 600lbs = $600. If you want to " build in " $100 profit you would need $1.64/lb for a 1,400lb finished str. The bid last week was $1.24. $0.40 different. 1,400lbs * $0.40 = $560. You take that away and the packers are making $140-$240/hd. That's fine. They should be able to make a go of it with that profit margin.
Just remember, if the cattle feeders are making another $560 a head that doesn't mean they will be willing to pass it all along to the cow calf guys. If I'm making $100/hd profit it's time to start thinking about upgrades to equipment and facilities. If I invest profits into maintenance and improvements I'm passing the profit on, just not all to the next wrung down the cattle producing ladder.
Good chance that's the case. Now the real story will be if they can last, under the power that the big boys have as far as squeezing out the competition simply by buying influence with the government and imposing restrictions and regulations that only they can absorb the cost of. And the same ol same ol continues only with a more people bankrupt.Seeing some new small USDA facilities show up in central Texas. Any chance the good profits everyone complains about the big 4 making is the thing attracting new startups....
I personally feel like it's my "duty" to sell a weaned, vaccinated calf, that knows how to eat. I go a little overboard and keep them 90 days after weaning. Most years, I'm not real sure the economics of that works out. I'm seriously thinking about trailer weaning this year (I know, I've spoke against that 1000 times). I'm just so busy, I seldom even get to sit down. I don't need anymore work....especially if there is not a return.I understand what you are saying. The other side of the equation is the cow/calf folks like we are that do wean, vaccinate and background our calves prior to selling. Most times there isn't a major incentive to do so as the markets usually drop for all calves green or otherwise when these are ready to be marketed. Sure they will bring more on that day than the ones not value added, however the loss doesn't really make the so called premium all that beneficial. The cow/calf folks take a lot of the risk out for the next folks up the chain at an expense to themselves. Bottom line without the cow/calf producers the chain is not possible. If something were to change and the big packers really do get control of the supply chain then the feeders looks like to me could get hit by them and essentially be in a situation similar to the current cow calf producer only a little worse off
I think most of us would agree that preconditioning is the right thing to do but trailer weaning is more profitable. for the past few years I've held my calves over for months to get more weight but mainly because I need a group trained to hot wire that I can use to manage grass in places that I won't take the main herd.I personally feel like it's my "duty" to sell a weaned, vaccinated calf, that knows how to eat. I go a little overboard and keep them 90 days after weaning. Most years, I'm not real sure the economics of that works out. I'm seriously thinking about trailer weaning this year (I know, I've spoke against that 1000 times). I'm just so busy, I seldom even get to sit down. I don't need anymore work....especially if there is not a return.
I feel like it's a good thing to do and we have have been doing it that way for several years, usually ours are weaned any where from 60 days to more likely 90 days or more and are used to eating from feed bunks. We did trailer wean a few odd ones this year, Getting ready to wean some pretty soon, not sure how long I'll hold them, with feed costs as they are. I participated in the first CPH 45 type program around here years ago, and that sale flopped, they do a better these days as far as bringing a premium over non value added calves, but the problem is those actual dedicated sales are usually timed wrong for our calving and we end up having to hold them longer.I personally feel like it's my "duty" to sell a weaned, vaccinated calf, that knows how to eat. I go a little overboard and keep them 90 days after weaning. Most years, I'm not real sure the economics of that works out. I'm seriously thinking about trailer weaning this year (I know, I've spoke against that 1000 times). I'm just so busy, I seldom even get to sit down. I don't need anymore work....especially if there is not a return.
Don't necessarily think of it as a premium. Think of it as a lack of a discount.I understand what you are saying. The other side of the equation is the cow/calf folks like we are that do wean, vaccinate and background our calves prior to selling. Most times there isn't a major incentive to do so as the markets usually drop for all calves green or otherwise when these are ready to be marketed. Sure they will bring more on that day than the ones not value added, however the loss doesn't really make the so called premium all that beneficial. The cow/calf folks take a lot of the risk out for the next folks up the chain at an expense to themselves. Bottom line without the cow/calf producers the chain is not possible. If something were to change and the big packers really do get control of the supply chain then the feeders looks like to me could get hit by them and essentially be in a situation similar to the current cow calf producer only a little worse off
I've done backgrounding of stocker calves as well as cow calf, so I understand a little about the next step in the chain, though admittedly no experience in an actual feed lot capacity. When I referred to it as a premium, that is how it was promoted to us cow/calf peons years ago and still is currently. Though the term value added is now widely used.Don't necessarily think of it as a premium. Think of it as a lack of a discount.
I visited with a sale barn manager once about wean vs not and vacc vs not. He said it's a no brainer. He said if a group of calves come in the ring with two rounds of shots and weaned 45+ day, every buyer in the place is watching. If they have one round of shots half the buyers don't pay attention. And if they have no shots, shiny noses, and not castrated he said that one other buyer and himself divide those calves up, because no one else wants them.
I get that everyone thinks that what they put in to a calf is worth more than they get, but if the next guy in the ownership chain isn't making any money then he has to bid less to stay in business. It's a trickle down effect.
Believe me I haven't ever met a farmer/feeder yet that doesn't under value the feed they raise to help pencil in a profit one a group of calves.
The answer is to take them all the way. You can raise calves cheaper than you can buy them, raise the feed, and finish the cattle. You can make money in the current market. That's just more risk than most people are willing to accept.I've done backgrounding of stocker calves as well as cow calf, so I understand a little about the next step in the chain, though admittedly no experience in an actual feed lot capacity. When I referred to it as a premium, that is how it was promoted to us cow/calf peons years ago and still is currently. Though the term value added is now widely used.
Your point about the next guy on the ownership chain not making money and it being a trickle down effect, is exactly my point. In the current situation, it doesn't look to me like the cow/calf producer and the feeders, should have to have a feast or famine relationship. We are both being squeezed as well as the retail stores and consumers by the packers. It's a trickle down and trickle up monopoly that the packers save on one end and mark up on the other. Without the cow calf folks on the bottom of the chain, the next links would have to change their business. There should be more money going to both cow calf and feeders.
No use thinking about it one way or another... it's math.Don't necessarily think of it as a premium. Think of it as a lack of a discount.