Where the profit goes

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HDRider

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Feeder cattle are about $153 right now. 400# sells for $612.
Live cattle are $116. 1,000# sells for $1,160.

Using my numbers from before

The difference between the $1,160 I would get selling a steer into the rigged market and the $2,100 I would get selling the same steer as freezer beef is profit for someone other than me. On top of the $2,100 is the revenue to my local processor of about $450. My steer then creates $2,550 in local revenue for me and my processor.

Think about who gets that other $1,390 ($2,550 -$1,160) in the rigged market. It would go to the retailer, the wholesaler and the distributor.
 

shaz

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You don't need to convince me that freezer beef is the best route for you and the end customer. Just make sure you have real flexibility built into your operation. These lead times are long and subject to market conditions. Would you have even quoted someone a price back in 2014? I no-quoted that year and raised 6 hogs to keep people happy. Right now it's a no-brainer but things can change really fast.
 

sstterry

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I think what makes more profitable now would have made it more profitable in 2014
I am not so sure, because the demand for freezer beef is higher now than it was in 2014. The pandemic opened a lot of consumers' eyes and they won't fo back now that they see what they can save and get.
 
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HDRider

HDRider

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I am not so sure, because the demand for freezer beef is higher now than it was in 2014. The pandemic opened a lot of consumers' eyes and they won't fo back now that they see what they can save and get.
I agree the market has expanded for freezer beef, but the cost structure for freezer beef is basically the same now as in 2014
 

Stocker Steve

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We retain most of our heifers and market the maternally challenged ones as freezer beef. This makes them very valuable and reduces the average cost of replacements. Due to these economies - - we recently have been turning 30 to 35% of the cow herd per year. Due to improvements in the cow herd - - we now have a few people cold calling us for bred heifers.

So the profit is in heifers, and about 15% of them go to the locker plant. I don't believe in feeding out steers.
 
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HDRider

HDRider

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We retain most of our heifers and market the maternally challenged ones as freezer beef. This makes them very valuable and reduces the average cost of replacements. Due to these economies - - we recently have been turning 30 to 35% of the cow herd per year. Due to improvements in the cow herd - - we now have a few people cold calling us for bred heifers.

So the profit is in heifers, and about 15% of them go to the locker plant. I don't believe in feeding out steers.
You sure took lemons and made limoncello
 

Stocker Steve

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You don't need to convince me that freezer beef is the best route for you and the end customer. Just make sure you have real flexibility built into your operation. These lead times are long and subject to market conditions. Would you have even quoted someone a price back in 2014? I no-quoted that year and raised 6 hogs to keep people happy. Right now it's a no-brainer but things can change really fast.
Any flexibility examples other than pork?
 

Ky hills

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OUR costs (grain especially) have gone up...a lot.
Wife called the feed store this morning, they told her it was going up again July and maybe again in June. She went ahead and ordered enough to fill both our gravity wagons. One with shelled corn and the other with a mix of soy hulls and corn gluten.
 

shaz

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We retain most of our heifers and market the maternally challenged ones as freezer beef. This makes them very valuable and reduces the average cost of replacements. Due to these economies - - we recently have been turning 30 to 35% of the cow herd per year. Due to improvements in the cow herd - - we now have a few people cold calling us for bred heifers.

So the profit is in heifers, and about 15% of them go to the locker plant. I don't believe in feeding out steers.
I understand that a heifer that won't breed is an ideal candidate for the freezer but what about one you cull at weaning? A heifer that's obviously not worth breeding is likely not worth feeding either.
 

shaz

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Any flexibility examples other than pork?
The extra flexibility that I have comes in the form of extra pastures that are not part of the herd rotation. That let's me raise heifers, bulls, stockers or whatever without interfering with the main herd. I don't have enough cropland to raise corn or some other grain.
 

Stocker Steve

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I I understand that a heifer that won't breed is an ideal candidate for the freezer but what abouone you cull at weaning? A heifer that's obviously not worth breeding is likely not worth feeding either.

I cull the big'uns with too much power. They are ideal for feeding.
I cull the late calves. They are ideal for feeding too.
I cull about 15% for a less capacity or a poor topline. They would not be ideal for feeding.
 

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