FEEDYARD CLOSEOUTS:  Profit and Loss Dynamics for Cattle Placed on Feed, Past and Projected

Analyzing Feedyard Closeouts: Insights into Cattle Feeding Economics

Feedyard closeouts provide valuable insights into the financial performance of cattle placed on feed at commercial feedyards. These projections offer a snapshot of costs, revenues, and profitability based on various factors such as cattle cost, cost of gain, selling price, and market trends. It's essential to note that these projections primarily pertain to cattle owned by individual owners rather than vertically integrated companies like beef processors or feedyards operating at cost.

Let's delve into a typical closeout for un-hedged steers sold in a recent week and a projected closeout for steers placed on feed this week.

In a recent closeout scenario:

Cattle were placed on feed 180 days ago, with a projected profit/(loss) based on futures at placement being ($109.61) per head.

The total cost and expenses included the cost of an 800 lb. steer delivered at $247.83 per hundredweight (cwt) plus a $15 freight charge, feed costs for 600 lbs. at $1.15 per pound, and interest on cattle and feed costs over 180 days, totaling $2,797.39.

The sale proceeds from a 1,400 lb. steer at $183.00 per cwt amounted to $2,562.00, resulting in a profit/(loss) per head of ($235.39).

In the projected closeout for steers placed on feed this week:

The cost and expenses are estimated based on current market conditions, with a projected profit/(loss) per head of ($129.98).

The total cost and expenses, including the cost of an 800 lb. steer delivered at $244.49 per cwt plus freight, feed costs, and interest, amount to $2,732.58.

Anticipated sale proceeds from a 1,400 lb. steer at $185.90 per cwt are projected to be $2,602.60.

Source:   TCR Weekly Summary