TheDairySite.com - news, features, articles and disease information for the dairy industry

News

CME: estimated returns to cattle feeders drop in 2019

20 February 2020

US - LMIC estimates average returns to cattle feeders for a typical operation in the Southern Plains feeding 750-pound steers. In 2019, estimated returns were $9.51 per steer, dropping 55.4 percent from 2018’s estimate which was $21.31, reports Steiner Consulting Group, DLR Division, Inc.

Total feed costs averaged $286.19 per steer with corn accounting for the bulk of the cost. From January through May 2019, average returns were $53.98 per steer, but the next five months (June-October) dropped into the red to an average loss of $78.72.

In November and December, returns were in the black averaging $56.88 and $180.92, respectively. January 2020 is starting off positive at an average of $149.55. LMIC is forecasting cattle supplies will start to tighten in 2020 which could possibly increase feeder cattle prices potentially pressuring feeding returns, compared to current levels, assuming feed costs (e.g. corn price) remains similar to 2019 levels.

As discussed in yesterday’s DLR, demand for both beef and pork were strong in 2019, if that momentum continues into 2020 it could provide support for both beef and pork prices and producer profitability.

The price of corn will be a factor for both cattle and hog returns. Currently, abundant corn supplies are keeping prices at favorable levels for livestock producers. The 2020 growing season will start soon and give a better idea as to planted acres and potential prices for the remainder of the year.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


TheCattleSite News Desk

Partners


Seasonal Picks

Animal Welfare Science, Husbandry and Ethics: The Evolving Story of Our Relationship with Farm Animals