Between a surging corn market and some tough winter weather, cattle producers in the Central Plains have been hit hard. Feedlot cost of gains (COG) for most pens of cattle are likely surpassing $75/cwt. at the current time, says Dillon Feuz, Utah State University economist.
Writing at www.lmic.info/, Feuz says cattle purchased with a COG expectation around $60/cwt., are likely facing sizeable losses at market time.
"At the same time, cow-calf producers are seeing the price for calves dropping with each new surge in the corn market. For producers who held their calves until after the first of year, they probably are looking at losses on that decision," he says.
He expects cow-feeding costs this winter to potentially increase by $50/head, and cow-calf producer revenues to drop $50/head relative to last year. Such a large swing may alter the expansion some producers were planning prior to the corn-price surge and inclement weather.
-- Livestock Marketing Information Service