The dollars flowing into feedyards are also a measure of the dollars that flow upstream to backgrounders, stockers and ultimately, cow-calf producers.

Nevil Speer

February 20, 2018

2 Min Read
Feedyard revenue through 2017

This column has periodically reviewed total feedyard revenue over the years. Estimation of the measure provides an indicator of total dollars entering the production sector; thus, it’s a measure of funds that potentially make their way upstream to backgrounders, stockers and cow-calf operations.  

Accordingly, the revenue trend is important to assess over time. More revenue coming into the feedyard generally means more dollars available to the production sector. If the trend is positive, there are new opportunities for growth and expansion. Conversely, if the trend is negative, the opposite is true.   

It should be noted that the revenue estimate is not an indicator of profitability and shouldn’t be interpreted as such. The calculation is straightforward and a function of three key components: 

  • Live weight

  • Number of fed steers and heifers marketed

  • The live market

This week’s illustration highlights feedyard revenue trends; first vs. second half of the year along with annual total. The breakout provides meaningful comparison on an ongoing basis.  

February-2018-feedlot-revenue.png

Last year’s total saw improvement versus 2016 -- $35.8 billion vs. $34.4 billion, respectively – most of that coming in the second half. And while 2017 generated more revenue versus the prior year, the total is still off the five-year average of $37.45 billion. All that said, it appears that 2018 is setting up for a favorable year – following through on the second half of 2017, bigger production and better prices could provide a boost for the beef industry’s top line.  

Related:Industry At A Glance: Feedyard Revenue Through 2013

How do you foresee the market playing out in 2018? Is it possible to get revenue totals back toward the five-year average? Do you perceive new opportunities because of what occurred in 2017? Leave your thoughts in the comments section below. 

Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited. The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited.

About the Author(s)

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
 
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
 
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
 
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

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