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Garvo, and other feeders what are your thoughts on this article....
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Brandon SWIA
Posted 11/14/2012 07:54 (#2696340 - in reply to #2694550)
Subject: FREIGHT?


A different thought that may be totally wrong, but consider it. Western feedlots will always have the advantage of economies of scale, environment, and water. But, big feedlots are based on cheap freight. A small Iowa feedlot and a large Western feedlot should have the same cost for feedstuffs outside of ......freight. Freight has gotten higher on corn. Distillers grains are located closer to the cornbelt feeders, so the freight on those is cheaper. A move to feeding more bulky feeds results in more freight. A 100K lot has to haul in those bulky materials from a much greater distance than a 5000 head feedlot that can source all their needs within a few miles. Freight on the manure going back out is also an issue.

The cornbelt feeders may have a little longer haul on the finished product, but they only pay that extra freight on the finished product instead of all the commodities that go into making that product.

Brandon
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