There are three primary profit centers in a commercial cattle feeding business, says Kevin Good, senior analyst at CattleFax. The feedlot itself is a profit center, selling feed, renting space and managing cattle. Profits and losses from the cattle owned by the feedyard are another profit center, though margins have become razor thin. The risk management center is the third profit center, Good says, one being called upon more and more to fill profit holes in other areas. Risk management is becoming more important to the profitability and the stayablity of the cattle feeding entity, Good explains.
You might also like: