![]() If the gross feeding margin is positive, feedlots have room to bid up feeder cattle prices if the margin is negative, feedlots eventually back away, which puts downward pressure on feeder cattle prices. ![]() When buying feeder cattle, feedlots look at the gross feeding margin, which is the difference between the amount received when fed cattle are marketed and the amounts paid for corn and feeder cattle, the two major inputs.Ĭattle feeders have little direct influence over fed cattle prices and corn prices, but feeder cattle prices are different. So why have feeder cattle prices been so volatile lately? It helps to think about feeder cattle prices as the “shock absorber” between fed cattle prices on one end, and corn prices on the other. In contrast, February 2015 live cattle futures have had just 2 limit days (both down) since December 1, and February 2015 hog futures have had none. And on the first trading day of January 2015, prices closed limit-up at the new 4½ cent daily limit, starting out the New Year with a bang (Figure 1). Daily price limits in feeder cattle futures were increased from 3 cents per pound ($3/cwt) to 4½ cents per pound ($4.50/cwt), with provisions for additional expansions if needed complete details are presented here.įor the 22 trading days in December 2014, the January 2015 feeder cattle futures contract had 10 days with price moves up or down of 3 cents per pound or more. Illinois Farmland Leasing & Rental Formsįutures prices were limit-down for 5 days in a row in mid-December 2014, the most limit-move days in a livestock contract since the BSE (mad cow) selloff in December 2003.Illinois Crop Budgets & Historic Returns.Farmland LEasing Facts Sheets & Pricing Information.Illinois Soil Productivity & Yield Utilities.Briomass Crop Budget Tool – Miscanthus & Switchgrass.Appraisal of Current Financial Position.Balance Sheet & Historical Financial Statements.Post Application Coverage Endorsement Tool (Sheet).precision conservation management (PCM).Not because I am planning to sell conventionally, but because I know that trying to rebuild a herd over the next few years may be more difficult and expensive than what I am feeding in hay at the moment. I am spending a little bit more than I normally would to retain the small herd I have. I believe that if you have a little bit of beef, it might not be a bad idea to hang on to it. Buyer beware that a portion of what we saw in 2014 may have been artificially stimulated and here is some insight.įor me personally, I am right here in the thick of east Texas drought conditions. In systems where grain is the primary means of putting weight on cattle, input costs will eat up any increase in margins. The price of corn has tripled over the past 2 years, going from $3/bushel to $9/ bushel in some areas of the country. Grass-based operations will benefit the most from an increase in commodity cattle prices. If you have extra grass resource and can buy good cattle out of these drought zones, go for it! But do not, as a beginner, build a herd in hopes for return on the commodity cattle market in 2023. The upcoming opportunity in the conventional cattle market is for established ranchers and not for newbies. For more information on why American beef is endangered, click here. With the control that the 4 major meatpackers have on the commodity cattle market, the system is rigged. If there is an upswing in 2022-24 it will follow the same pattern and will not be a long term increase in prices. The 2014 price spike ended as quickly as it began. Any upcoming price spikes will be very short term. Here in 2022 we are facing the same set of circumstances and possibly the same opportunity to cash in on our beef cattle, but there are 3 things we need to pay attention to: Once precipitation returned to these drought stricken areas, ranchers began restocking, and prices went up for a very brief period of time… In 2011, a red hot drought across the Deep South drove many ranchers to liquidate and herd sizes were reduced. What lead up to these record high prices? In 2014 the live cattle market saw all time record high prices, with steers at 550lbs going from $1.63per pound in 2012 to $2.95 in 2014. ![]() Channel Guest: Corbitt Wall, FEEDER FLASH, ĮMAIL: shepherdess (at) harmonyfarms.blog
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