Recent Success in Feedlot Markets Threatened by Rising Breakeven Costs, Is Red Ink on the Way?Thu, 06 Jul 2017 11:46:25 CDT
For a time, this spring, the experts were saying that there was money to be made all throughout the entire beef pipeline, from the cow/calf end to the packers. Especially profitable, though says Jim Robb, director of the Livestock Marketing Information Center, has been the feedlot business. He spoke to Radio Oklahoma Ag Network Farm Director Ron Hays about the phenomenal performance of the beef industry over the first half of this year.
“The first five months of this year were the best five consecutive months in our history of doing these calculations, back to the mid-1970s,” Robb said, noting that this past May was in fact the second highest month ever on record. “The factors behind May were three-dimensional.”
Robb explains that fed cattle prices over this period were higher year-over-year, up about six percent from the prior year’s May close-outs. Coupled with that, feeder cattle costs going into this period were down 15 percent year-over-year and the cost of feed stuffs was also down about six percent as well.
“All those factors came together both on the cost side and the price side, to give us these returns,” he said, but points out that markets have begun shifting the opposite direction lately. “As we look ahead here, now we have bid much of the profit potential into the feeder cattle profile. Taking that into context, from a feeder cattle perspective, we could very well see red ink soon.”
Listen to Robb and Hays discuss the beef industry’s success in the feeding business over the first half of this year and their outlook moving forward, on today’s 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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