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Ivan Rush: Calf breakevens & learning first-hand

Producers in the area with spring calves are close to giving pre-weaning vaccinations, if they’ve not already done so, as weaning isn’t too far away. Conversely, producers with fall calving programs are just beginning calving. The prolonged period of no rain in many areas has raised concerns of fire, pasture dust conditions, and the need for fall moisture to initiate fall cool season grasses.

Many producers have made decisions about fall marketing their calf crop, watching video sales for later delivery. Even though corn prices are still a big unknown, I think we will see fairly aggressive corn prices this fall and winter. Thankfully both the feeder and fed futures have held strong, which has given continued strength to calf and yearling market. Even so, cattle feeders remain very optimistic and are assuming that feed cost will be much lower (or know something that I don’t know).

Assuming a 575-pound feeder calf enters the feedlot for finishing is valued at $1.40 per pound, and that calf is fed corn valued at $7.85 a bushel (which is about $100 a ton higher than last year) and the finished steer brings $1.20 per pound in late April, he will lose around $56. The total cost of gain was approximately $1.11 per pound.



Several things can and must occur to get calves back in a profit mode. The first is looking to other feedstuffs such as distillers grains, syrups or non-traditional feedstuffs as a way to reduce feed costs. Another is extending the use of roughages to produce economical gains before the finishing phase to reduce total cost.

Or perhaps the price of corn will drop considerably. It seems to me that we can no longer look at corn and feed calves in a drylot for nearly 200 days and see much profit. Who knows, the futures may go over the current $1.23 level for fed cattle. In my calculations the breakeven for a feeder would need to be around $1.31; a fed steer would need to sell for $1.24 just to breakeven.



Producers in the area with spring calves are close to giving pre-weaning vaccinations, if they’ve not already done so, as weaning isn’t too far away. Conversely, producers with fall calving programs are just beginning calving. The prolonged period of no rain in many areas has raised concerns of fire, pasture dust conditions, and the need for fall moisture to initiate fall cool season grasses.

Many producers have made decisions about fall marketing their calf crop, watching video sales for later delivery. Even though corn prices are still a big unknown, I think we will see fairly aggressive corn prices this fall and winter. Thankfully both the feeder and fed futures have held strong, which has given continued strength to calf and yearling market. Even so, cattle feeders remain very optimistic and are assuming that feed cost will be much lower (or know something that I don’t know).

Assuming a 575-pound feeder calf enters the feedlot for finishing is valued at $1.40 per pound, and that calf is fed corn valued at $7.85 a bushel (which is about $100 a ton higher than last year) and the finished steer brings $1.20 per pound in late April, he will lose around $56. The total cost of gain was approximately $1.11 per pound.

Several things can and must occur to get calves back in a profit mode. The first is looking to other feedstuffs such as distillers grains, syrups or non-traditional feedstuffs as a way to reduce feed costs. Another is extending the use of roughages to produce economical gains before the finishing phase to reduce total cost.

Or perhaps the price of corn will drop considerably. It seems to me that we can no longer look at corn and feed calves in a drylot for nearly 200 days and see much profit. Who knows, the futures may go over the current $1.23 level for fed cattle. In my calculations the breakeven for a feeder would need to be around $1.31; a fed steer would need to sell for $1.24 just to breakeven.


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