Something may happen this fall that has not happened before.

JD Seller

Well-known Member
This is not tractor related but is farm related.

I can not show any way to make a profit on feeding out calves this fall/winter. It makes little difference if they are my calves or purchased calves. The high price of the calves has negated any gain by lower feed cost and higher market prices.

The future fat prices are not high enough nor the lower feed cost(corn market price) to off set the high current cost of the feeder cattle.

So I am really thinking about not filling the silos this fall. I will fill one to finish the cattle we currently have and for insurance next summer to feed the cow herd in an emergency. That could be the only one.

I would sell my calves as feeders not fat cattle.

This would be the first time in my lifetime there would not be cattle in the fat yards here.

Here are the numbers:

500 lbs. steer $2.50-3.00 per LBS. $1250-1500
1400 lbs. fat $1.45-1.60 per LBS. $2030-2240

So you would need to grow the calf 900 lbs. and your gross less calf price would be $740-780 or .82-.86 per pound of gain. With all costs figured in, either of those numbers shows a loss between $100-140 per head.

I have gambled when I could just show a break even before but not a true loss per head. The dollars involved warrant consideration of the risk factor big time.

A 100 feeder cattle can easily be $150K with delivery and vet cost included. Then do all of the work/risk and LOSE $10-14K for doing it. WOW

This is a major topic between me and the boys. They are all excited by the current high fat market. I am worried by the HIGH capitol cost of finishing the replacement cattle/calves.

You add in the fact that the corn/soybean prices are going to be way lower this fall and next year too. So there is not the money/profit to pull a loss up. I know some would say you need to carry some of the current profit over against the future loss. I just can't see my way to go into this with a KNOWN loss looking you in the face.

What do you guys think???

This is not about the way we feed cattle either. Natural, organic or even conventionally raised cattle will all suffer the same effect.
 
(quoted from post at 21:32:16 07/29/14) This is not tractor related but is farm related.

I can not show any way to make a profit on feeding out calves this fall/winter. It makes little difference if they are my calves or purchased calves. The high price of the calves has negated any gain by lower feed cost and higher market prices.

The future fat prices are not high enough nor the lower feed cost(corn market price) to off set the high current cost of the feeder cattle.

So I am really thinking about not filling the silos this fall. I will fill one to finish the cattle we currently have and for insurance next summer to feed the cow herd in an emergency. That could be the only one.

I would sell my calves as feeders not fat cattle.

This would be the first time in my lifetime there would not be cattle in the fat yards here.

Here are the numbers:

500 lbs. steer $2.50-3.00 per LBS. $1250-1500
1400 lbs. fat $1.45-1.60 per LBS. $2030-2240

So you would need to grow the calf 900 lbs. and your gross less calf price would be $740-780 or .82-.86 per pound of gain. With all costs figured in, either of those numbers shows a loss between $100-140 per head.

I have gambled when I could just show a break even before but not a true loss per head. The dollars involved warrant consideration of the risk factor big time.

A 100 feeder cattle can easily be $150K with delivery and vet cost included. Then do all of the work/risk and LOSE $10-14K for doing it. WOW

This is a major topic between me and the boys. They are all excited by the current high fat market. I am worried by the HIGH capitol cost of finishing the replacement cattle/calves.

You add in the fact that the corn/soybean prices are going to be way lower this fall and next year too. So there is not the money/profit to pull a loss up. I know some would say you need to carry some of the current profit over against the future loss. I just can't see my way to go into this with a KNOWN loss looking you in the face.

What do you guys think???

This is not about the way we feed cattle either. Natural, organic or even conventionally raised cattle will all suffer the same effect.

I'm thinking your right. About the only people who stand to make money are the grass fed people providing they have hay.

Rick
 
That reminds me of years ago when Univ people were pushing dairy farmers to use futures. They were always successful after the fact. But looking ahead, and knowing cost of production, it makes no sense to lock in a loss. Like any tool, there is a time to use it.
 
You are right, if you have good grass, and access to cheap grass hay, there is money to be made. That is the way I do it , on a small scale. Just don't make the one mistake , that I made, and save a steer to butcher, Grass fed = tough lean meat. Sell the feeders, in the fall, and buy your meat at the store.
 
(quoted from post at 23:54:29 07/29/14) You are right, if you have good grass, and access to cheap grass hay, there is money to be made. That is the way I do it , on a small scale. Just don't make the one mistake , that I made, and save a steer to butcher, Grass fed = tough lean meat. Sell the feeders, in the fall, and buy your meat at the store.

WOW, our grass feed are anything but tuff. They have great flavor and are no tuffer than what we can buy in the store.

Rick
 
We don't have a viable fat cattle market where I live so that is not in the strategy, but even with the high cost of inputs the last several years, my corn silge costs (out of pocket and depreciation) are almost exactly $100.00 per ton on the dry matter basis, in the feed bunk. This year, home ground shelled corn (all bought in) will cost $155.00 per ton as fed. I don't yet know what corn gluten or cottonseed meal will cost this fall but this spring and summer I have been balancing the ration with DDG at $230.00 per ton, as fed. In total, feeding cull cows, I am looking at the best year I ever had margin wise and COG wise, in addition, backgrounding both home raised and sale barn calves this year is almost like printing money.
 
You are right on. I talked to a older buyer(70 years+) that buys for one of the larger sale barns in PA. He said he has never seen anything like it in his life. He said you CAN NOT make money right now buying feeders and contracting. He doesnt understand who is buying these animals. Only thing he figures are guys are buying hoping the fat market climbs even higher, and with low grain prices guys are pulling straws trying to find a way to make money.
Its going to be a tough year here for some guys. Its a great corn year, so what do you do? Sell at $4/bushel? or put it into animals and possibly lose money. There are a lot of dairys that buy corn silage, but one good years like they year they wont need to buy much...
 
In the community that I grew up in there were a lot of small farms. Mostly dairy but there were a few beef and a couple of feedlots. I think it was in middle to late 70's that the feedlots got in trouble. They paid record highs for feeders in fall and the price kept going down from there.The one family stayed with it until they were put off the farm by lenders. The other family, both father and son also had good jobs in town. The cattle price after feeding up all the feed was lower per head than they paid. They held onto some of their land but they never farmed much after that. Wish the best in whatever you decide.
 
Thats farming for sure you have to keep reaccessing what you're doing of course you already knew that.Tell the boys its not how much you get for something that counts its how much profit you make thats counts and the more you get invested the more profit margin you need to cover the extra risk.With the current cattle market someone(s) are going to be left holding the bag and taking a huge losss down the line.
 
JD Seller, I have only one question to ask and that is do you pasture the animals and if you do would that pasture land be able to be used for anything else or would it have to lay idle and grow up in weeds?
 
I might be missing some thing but was just with nutritionist yesterday and we were talking about it (hot topic right now) and we see a 4 to 500 dollar gain per head. That is on lot on stuffer. The only problem is the high dollar over head. IDK Tom
 
thats odd, due to a medical condition i have i must buy grass feed beef, fortunatly for me the ranch down the road i live on has exactly that, i work for him regularly as he's in his mid 80's and there is some things he just cant do anymore ,hes no longer big into cattle although he once was, in his younger days,i havent counted them but i doubt he keeps 100 head around, but the meat is very tender and tasty off these cattle
 
LAA Your feeding cull cows not fat steers. I know of two loads of 800 lbs. calves that guys have $2.65 in them delivered. That's is $2120 in them at 800 lbs. So if you feed them to 1400 your going to need $2750 or so to make any money. That would be $1.96 fat price. That is never going to happen.
 
2 things come to mind. Selling 2 calf crops in 1 year. Uncle Sam will bite hard, and the other, is how long are you going to wait to sell?
I see the calf market correcting its self during the fall run. Will it go back to a $1/pound? NO, but it will drop back to a buck 80, or so.
I feed a few out each year. Have to buy everything, but I like the way mine taste, and I have always been able to make a few bucks. I bought some TOTAL junk a week ago. Calves with swollen joints, 1 that had lost a foot, just junk calves, and I still paid $250 a head.
If I push them REAL hard, they might be fat by Christmas 2015. Most of them only weighed 300 pounds when I got them.
 
Tom was that finishing the cattle or just back grounding your own calves???? The calves are the gold right now.

Also if that would be true how many head does that nutritionist have on feed to make his "big" profit??? LOL

I know of too many experts that have big educations that don't have any skin in the game. I will listen to them more when they have several MILLION dollars of cattle on feed. Until then I take what they recommend with a big grain of salt.
 
You are set up to finish cattle. Those you raised from your cows plus the ones you buy.

I would still finish the raised calves. You will still make money on them.

Just the other day they were saying even with the high prices in the stores they have not seen a drop in consumer buying.

I feel there is still a little money in the ones you buy as well. Aren't you a little high on your feed cost figures.

I haven't fed any cattle for 4 years now but I still watch what is happening in the cattle markets.

Just my view.
 
How can you afford to feed out critters on grass? I
can get $70/pair/month, with our grass. Right now
hay is cheap, but in my part of the world, no one
is letting go of much.
While I won't knock grass fed beef, I grew up
eating corn fed, and to me that is the only flavor
I like. Besides, corn is a grass. :)
 
Leroy: The pasture I have is used for a 100 head of brood cows. The fat cattle are all fed in feed yards.

I just do not want to give my calf profit away buying feeder cattle to lose money on. It does not even pencil a better profit finishing my own calves. I can show a better profit selling them as feeders than going ahead and finishing them out. That is about $200 difference in net money too.

There are too many fools trying to cover their "high" cost land rentals or purchases now that we have $3 fall corn.
 
I thought I made it clear that i was talking about a completely different enterprise and that was my point, you have options, your not locked into feeding 5 and 6 weight cattle. You have facilities, capital, labor and feed, there is a class of cattle with which you can utilize those advantages to make money during the highest market in history, it just may take a little research. We had to completely change our operation 30 years ago when Swift and Company sold out in the area. Flexibility is good. And by the way, you say $1.96 will never happen but how many people would have ever bet on a $1.60 fat price as recently as a year ago? There is no doubt that prices will come down again at some point but it is not like we haven"t rode that horse before.
 
Yep we have one in this neighbor hood trying to do just that.

He has out bid everyone on rent. Last fall he started renting empty feed lots in the area and filling them up.

He bought high priced calves and started selling this spring at 1100 pounds that were not finished. And looked poorly as well. He set the bottom for the fat cattle sale at the sale barn.

I wonder how losing on cattle is helping pay that $450 rent.

Gary
 
JD, IMO as an old Cow/Calf and Yearling Stocker raiser, In the past, the most money to be made was the Cow/calf operations, to retain and grow calfs to the point where the feed lots want them and sell straight to the Feed yard.
But! now with a 450 wt milk fat calf bringing between $900 to $1100 (depending on quality) All Day Long and any Sale barn here in Texas!! Why fool with it The margins are too tight!
25yrs ago we felt the people feeding cattle in the feed yards were skating on thin ice.
Get whole for this year! figure out where your own cattle with make you the most $$$ with the Least Inputs Possible!! and work from that!
Hope this helps!
Later,
John A.
 
jd ,, there was circle of us fellas talkin this over at the county fair ,,,as you know to well , best cure for hi prices is hi prices ...
 
Was just wondering. If pasture is no longer used could it change the taxes and so on on the ground? If it would change from ag to commercial type of use could realy take a chunk of money there so would it under those circumstances be better to loose the money to goverment or on cows? But pasture is still being used so that should not be a problem.
 

just sold 10 calves last week.. got 1250 for them pretty much across the board with the weight being from 400 to 700lbs. 20 year ole cow brought 1000.
 
It makes NO SENSE to dive into something knowing full well there is about a 90% chance you're going to lose. The absolute only way folks are justifying paying these high prices is "hope in (even) higher fat prices. It may happen...but it's not worth the risk. It's just not worth the risk. (I know I said that twice) Just because you have the facilities does NOT mean you HAVE to use them. You can very well let them sit there this winter. I"ve had the best alfalfa hay yields this year I"ve ever had. Everybody says "You need to buy more cows". I'm thinking, "yeah right...spend $2500.00 for bred cows and then let them go back down to $1100.00 a year from now".....plus I'd give away all my feed. I"m NOT going to do it. That hay looks REAL good stacked away in the barn. It will be there a year from now...maybe 4 or five years from now. THEN.....I'll go buy more cows.

JD Seller.....consider doing this. SAve back all your heifer calves this fall and feed them. Breed them next spring and sell as bred heifers. Change WHAT you sell. You could still utilize your facilities, feed and labor. Bred heifers will hold their value a lot longer than the fats will.
 
That is finished weight.
The nutritionist is a brother to the guys that we (my father and I) buy some of our seed corn from and they raise a couple hundred steers, milk a 80 cow herd and told me this spring they bought feeder pigs for 3 dollars a pound just to keep there building full, I don't know how many hogs they have!
I must admit one does question his sanity spending almost 900 on a 300 pound calf.
 
I would sell them as feeders weather you sell them off the cows or back ground them. Taxes are not an issue as most salebarns have a deferred payment account. Why go through all the work, wear/tear on machinery ect when you will be lucky to break even? The only thing I might consider is randallinMo's suggestion of keeping and breeding the heifers, but that is risky too as you cannot contract a price for bred heifers.
 
Surprising how many guys don't do the analysis, they just continue as usual because "that's how we've always done it." And they can't stand to see the facilities standing idle.

My dad was a carpenter, and always marveled at how contractors would bid a job so low that they couldn't possibly make any money on it, but, as he said, "They just gotta be out there swingin' hammers."
 
I like to convert projected returns into what I would make per hour of my time and labor. Sometimes a profit looks OK, but then works out that I would only make a a three or four dollars per hour for my efforts. That makes it easier to look for better alternatives. Return On Investment (ROI) is another good tool.
 
Not a cow guy at all but couldn't help but notice the sale prices are up. We have about 25 tons of extra hay that isn't marketable with our horse hay due to milkweed in it and we have lots of old cattle pasture sitting idle. With a few fences repairs we were eyeing buying 2-5 calves to keep for the next year. Locally calf prices are low still.
 
What cause the increase in the costs for your own calves? I can see how buying calves at $2.50 a pound eats up all the profits before you sell that later - but what drove up the input costs on your own calves?
 
Actually the guys that have their own herd, their own hay and their own grain will come out fine. If you are buying one of the three this year you'll probably break even at best, if you are buying two of the three you're losing money, if you are buying all three you need your head examined.
 
I tend to agree with you... if it doesn't show a profit you're just as well to sit this round out if you can afford to. The problem is... not everyone can. Sometimes it's a case of keeping on so you can make some kind of contribution to fixed vs no contribution to fixed costs... and hoping nothing goes wrong. However, if you own everything paid up, then sitting on your hands is obviously the best option.

Rod
 
I admit, I didn't read everyone's posts.
Lot of good discussion here and I don't claim to have any answers. However, my dad decided to "take a year off" back in the late 90s because the price of feeder calves was too high. The lots have been empty ever sense. It's too bad because I kinda liked raising cattle, but no more. It would have been nice for my children to see a working farm like we used to have, but now it's just corn & beans.
 
Where I live many people farm on borrowed (Gov't)money until they go broke, then run cattle on borrowed (Gov't) money until they go broke, then if it has been 3 years or more they go back to farming. When this cattle market blows up it will be just like 1986 again, the FSA and the local banks who wrote the loans will be looking for people with cash to buy all the cows that are still on their books, at a deep discount to the taxpayer of course.
 
BTDT. Calculated what the feeders would bring in the fall; decided to feed them out myself over winter. Sold the fat cattle in the spring for almost exactly the same total amount that I could have gotten for the feeders in the fall.

Got zero return for the feed and my labor; those were a total loss. Made me a lot more cautious about feeding out fat cattle.
 
Grow your own calves and finish them on your own corn, etc on a smaller scale, low capital expense, maybe a bit more labor per critter-- seems like the Amish have the right idea about making at least some profit in confused times. Not really teasing here, the Green County, Wisconsin Amish survive and usually have some cash reserve build up every year. RN
 
If a person was ever going to be short on feed and needed to sell the calves and put the feed through the cows,this would be the year to do it. Every time I think we hit the top though,they go higher. Last week the top was $153 on fats here,this week I got $157 and the top was $163.
I'll keep mine like always. By the time I got the corn shelled,dried and hauled there's no sense selling it. I'll put it through the calves.
 
How'd you manage to keep calf prices low? I spent $400 each for a few BOTTLE calves for my son's to feed through the summer. Paid $120 for calves 3 years ago and thought that was enough.
 
Makes no sense working your azz off when knowing up front you'll lose money in the end.
The first profit is always the best.
I would sell and defer the money. :wink:
 
Why would you not use the market value of YOUR own calves when figuring the profit or loss on finishing out fat cattle????

Meaning the calf cost is the same regardless whether I buy or already own because MY calves could easily be sold for current market price.

I know my OWN calves and my OWN corn does not cost me the same as corn or calves you buy. That is only true if you only figure the production cost and not the true market value of the corn/calves.

I can sell my calves this fall and make X amount. Why would I finish them out to make less than X????
 
My neighbor sold holestein fats last week for $1.55. If our cool weather keeps up it will cost extra to dry corn this fall. So if you feed hi-moisture corn or make snaplage that should cut costs some.I am in the same boat as well as I have feed but am wondering if there is any profit left in buying Hol. feeders.Not sure what to do but will probaly buy some more.My lots and sheds are not fixed good enough for beef so will stay with holsteins.
 
''That is only true if you only figure the production cost and not the true market value of the corn/calves.'' -- That is a true statement and exactly the reason to feed your own calves this year, if there is on avaerage 7 pounds of gain in a bushel of corn that gain is currently worth a minimum of $11.00 and that bushel of corn is worth a maximum $4.00 at the elevator depending on where its sold. How would you lose on your home raised calves using your home raised, currently depressed price feedstuffs to turn $1500.00 feeder calves into $2100.00 fat cattle?
 
Oh how true Mike, how true. I will listen to my farm neighbors tell me over and over "what else am I supposed to do"? when they are about to do something we both know won't make them any $$. I dont even argue with them anymore. I just nod my head and say "yep".
 
LAA The total feed cost would eat up what you gain on the lower corn cost for one thing. Also I have most of my corn locked in, with options, at a high price than current market.
 

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