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Production Costs and Cost of Gain Will Play Key Role in Cattle Profitability - Derrell Peel Explains

Wed, 27 Apr 2016 21:54:41 CDT

Production Costs and Cost of Gain Will Play Key Role in Cattle Profitability - Derrell Peel Explains

In the latest edition of the Beef Buzz, OSU Extension Livestock Marketing Specialist Derrell Peel offers strategies for cow-calf producers and stocker operators as we move through the second quarter of 2016.

Peel says that although calf prices are currently pretty strong, they will continue to decline as beef herd numbers continue to build. Now is the time for cow-calf producers to pay close attention to margins.

“They need to be aware of what the market prices are likely to do, but at the end of the day, they can’t change them,” he says. “So they really need to focus their attention on cost management and try to protect their margins.”

When it comes to stocker cattle, Peel says producers need to understand the relationship between stocker cattle values and the cost of gain. While it was once more profitable to take cattle to 800 to 900+ lbs before marketing them, the low cost-of-gain means feedlots are now more interested in putting the weight on themselves.

“If stocker producers pencil out the value of the last 200 lbs of gain on the big end relative to the first 200 lbs when they first start with these cattle, they may find an incentive to turn those cattle a little bit quicker and concentrate more of their effort on the light-weight end of things,” Peel says.

Listen to Peel’s complete strategy for cow-calf producers and stocker operators during this edition of the Beef Buzz.

The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.



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