The wild card is and will continue to be fed cattle prices.
The feeding cycle that began in late 2010 will be remembered for a variety of reasons — increasing feeder and feed prices, increasing fuel prices, volatile fed-cattle prices and the narrow USDA Choice-Select spread.
If that was not sufficient, the weather contributed its own challenges by delivering one of the coldest and wettest winters, as well as extreme heat in the summer.This fact remained true for feeder-farmers who raise their own hay crops as well as silage, earlage or high-moisture corn, and appraised them at corn prices in late September 2010. For the rest of feeders, who relied on weekly spot prices for corn grain, feed prices nearly doubled — tracking corn grain from $4.10/bu. to as much as $7.50/bu. in June 2011. Based on the projection one could have made back in late 2010 of fed-cattle prices at $1.10/lb. or above, and a relatively low corn price ($4.10/bu.), there was ample optimism for decent profit margins.