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Ridgway, IL | Its becoming a larger part of our business. We are 360 mile from packer, it cost me 2.6 cents per lb to ship fats. We enjoy great grain markets here, my cost on corn throughout the year probably runs 20-30 cents per bu higher than it does 150 mi north of here.. that is an additional 1 cent per lb disadvantage we have on fat animals compared to those north of us. We can make some of that up with cheaper by-products, but still takes corn to get them fat. I feel like we are positioned well to collect and group southeastern cattle into load lots throughout the year. I like having the combination of confinement and outdoor pens. We generally start 80-100 in a group, then combine 2 of those groups once they are settled in. We feel like 60 days is mandatory. I prefer to be in the position of selling 2 way cattle, and i prefer to be trying to sell something with some eye appeal.. so we buy with the end goal in mind. With that being said, we prefer not to be starting calves in july/aug, so what we are placing right now we will probably keep 100-120 days rather than 60, and running them on up to 7-8 wts. That works well because selling 8 wts in aug lets the buyer hit the strongest seasonal fat markets. I can see how buying green tagged cattle is better than no preconditioning, but there is still the challenge of commingling. The only way i know to address that is to be able to source groups big enough to fill pens from a single source. That is the niche we try to fill, to have up to 2-300 head of the same thing at a time. We still feed cattle to finish, its nice to have that experience when it comes time to sell our cattle because we understand what the feeder is looking at, and we know what would be reasonable to expect performance wise out of the calf we sell. We manage risk with fat cattle futures and options, ultimately that's what is going to drive the calf prices. We have never sold at a sale barn, only private treaty and video auctions. I figure having the ability to finish them out is my backstop if the values seem soft. I feel like we have the potential to earn more money making 3 - 60 day turns, than 1 - 180 day turn, though it is more work. | |
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Anybody here consider themselves in the stocker/backgrounder business?
