|
Cattle feeders want to keep their options open with captive sup"You can be a hero or a heel all in the same day without doing a thing," Scott Anderson said. By Doug Rich Captive supply, a volatile corn market, and distillers dried grains (DDG) are just a few of the challenges facing cattle feeders everyday. Six feedlot managers participated in a panel discussion during the Oklahoma Cattlemen's Association annual meeting to discuss these challenges and how they deal with them. Don McCasland, president of the Texas Cattle Feeders Association, moderated the panel discussion, which included Tom Fanning, Bill Roser, George Foote, Scott Anderson, Chris Hitch and Charlie Christopher. He began by asking the cattle feeders how they are coping with the ethanol fueled corn market. Chris Hitch, Hitch Enterprises, said he was told that $4 corn is about the cut off for ethanol profitability. He expects corn to hang around that level give or take 60 cents. "I don't care what it is as long as it stays that way for a while," Hitch said. "Volatility gives us a lot of risk." Cattle feeders do not want to extend themselves because the price of corn can change rapidly. "You can be a hero or a heel all in the same day without doing a thing," Scott Anderson, Guymon, Okla., said. "There was a time when the price of corn would change by a dime and that was a lot, now it is 50 to 60 cents." Tom Fanning, Buffalo Feeders, said when the corn market started up it pulled the price of by-products along with it. By-products are not only more expensive they are scarce. Fanning said fat that was previously going into cattle rations is now going into biodiesel production. Distillers dried grains are a by-product that all cattle feeders are learning to use. All of the panel members said they would use DDG if it were available and economically feasible. That is no problem for Charlie Christopher with Aztec feeders. An ethanol plant is being built right next to their feedlot near Hereford, Texas. "We are excited about the ethanol business," Christopher said. Not many cattle feeders share that sentiment. There are a lot of dairy farms in the High Plains these days and DDG fits into their rations. McCasland said if these dairy farms start using DDG it may free up more corn for cattle feeders. "We need these plants here in Oklahoma and Texas to compete with the Midwest feeders," McCasland said. None of the feeders on the panel do much with captive supply but all agreed it is tool they want to keep. They don't want the government telling them what they can and can not do. "The worst thing we could do is let the government be anymore involved in our businesses than they already are," Fanning said. "It (captive supply) is a tool and we would like it to be there if we need it." The panel members said they use every marketing option available to them. Most of them had some experience with grid marketing. Don McCasland said selling on the grid is an opportunity to raise a little better cattle and get a little more for them. Fanning said in his experience with grid marketing the discounts are always more severe than the premiums are positive. All of the feeders said they have noticed a drop in the number of cattle grading choice in recent years. Bill Roser, Wheeler Brothers Feedyard, attributed this to a combination of genetics and fewer days on feed. Nearly all of the cattle coming into feedlots these days have some continental breeding in their background which results in leaner carcasses. Fewer days on feed is a result of the corn market. Cattle are heavier coming into the feedlot. Chris Hitch said he wants steers to weigh 900 pounds and heifers near 800 pounds before he puts in the feedlot. None of the cattle feeders were too concerned with a reduction in cattle grading choice as long as the choice-select spread is narrow as it has been recently. During the question and answer session the panel members were asked how they can tell when an animal is finished. Scott Anderson, Guymon Feeders, said an animal is finished as soon it has a buyer. The serious answer is that as soon as feed consumption on a set of calves starts to drop off they are ready to go. McCasland said when that happens don't wait too long. Doug Rich can be reached by phone at 785-749-5304 or by e-mail at richhpj@aol.com. 8/13/07
Copyright/Privacy
Copyright 1995-2008. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
| ||||||||||||||||||||||
