One of the most obvious ways to reduce yardage is to … Cattleman's Guide to Feedyard Terminology. Table 1 illustrates the breakeven budgeting on expected profit of changes in cattle or feed prices. But it is a cost that bites into profit and may make us unprofitable when markets move downward. Producers can select starting weight, adjust futures or selling price, and change total cost of gain to determine breakeven prices customized for their situation.
It would be foolish for a rancher without experience in this area to hedge his cattle without the feedlot’s advice. calf prices are likely to be lower in the fall when most calves are sold. However, there are some fundamental issues to be addressed to be sure a profit is available for both the Feeder and the Owner. The Purina Cattle Breakeven Calculator is intended as a tool to allow producers to estimate profitability or loss when finishing cattle. 4 • AS1162 A Cow-calf Producer's Guide to Custom Feeding Example of costs in feedlots that charge yardage vs. yardage plus feed markup Assumptions • Initial weight = 600 pounds • Slaughter weight = 1,350 pounds • Average daily gain = 3.75 pounds per day
Inputs are adjusted weekly based on market conditions. The most common application of feeder cattle breakeven budgeting by either feeder cattle producers or cattle feeders is likely that of estimating what a set/pen of feeder cattle are worth at a given point in time. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Most feedlots have the knowledge and experience to aid a feeder in executing a sound hedge. Market Highlights: Feeder Calf Prices Should Stay Steady. Gkonis and Psaraftis Some key variables affecting liner shipping costs 2 1 The rest of this paper is organized as follows. Primarily, two methods are used by custom feedlot cattle operations. The importance of being cautious with yardage is that in times of good markets it is often one expense we let slip by. 24) Flaker-- A mill that steam flakes grain. ... and most of the narrowing is likely to come from lower Choice prices rather than a strengthening Select beef market.
Also, processors are busy with game animals in the fall and are more available in late spring and early summer to process livestock. What is hedging your losses? Custom feeding refers to the practice of sending calves, stockers or yearlings to a commercial feed yard for feeding to slaughter weights. Section 2 starts with the topic of economies of 2 size. o Most managers would prefer not to have all the cattle locked into one particular marketing strategy. Start studying Module 3 LAB Quiz. - On the commodity markets a contract can be made to buy or sell a specific number and class of cattle on a particular date in the future and at a particular delivery point. Andrew P. Griffith, University Of Tennessee . 1) ... Feeder Association-- A cooperative association formed to acquire livestock for growing or finishing. Another method is to charge extra on feed (a feed markup) that will cover the custom feeding costs.
Section 3 examines the effect of port time, speed, and route distance and Section 4 3 investigates the impact of bunker costs. Custom feeding is not without risks.
Hedge fund managers receive a management fee (typically between 1%-2% annually) plus a percentage of the funds performance (often set at 20%). 25) ... Yardage-- Charges incurred each day that the cattle are in the feedlot. The primary objective of a stocker-yearling operation is to make the most pounds of cattle gain within economic reason. A water . The custom feeding charges vary between cattle feeding operations. This publication focuses on items a cow-calf operator should consider before choosing a feedlot to custom feed cattle. Section 5 presents the conclusions of the paper. Hedging a profit on cattle will greatly reduce the amount of margin required by a loaning agency. One method is to charge a yardage fee of so much per head per day. Facilities are needed before the steer is brought home. Some feedlots do a combination of both methods.
For those with the facilities, feedstuffs, and management expertise, custom feeding cattle is an excellent risk management tool.