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High-Priced Stockers Might Still Pencil Out Profits

  Economist says these days you must calculate value of gain to deal with high-priced stockers.

In the good ol' days, many stocker/backgrounder operators simply knew if there was more than a dime of rollback, or slide, in cattle prices from start to finish weight, owning cattle wouldn't pay a profit.

Not any more, says Steve Swigert, an economic consultant with the Noble Foundation at Ardmore, OK. With all calf prices well above $1/lb. and feedlot cost of gain at $110-120, the value of gain has gone up so much you may be surprised how much slide you can tolerate.

The only way to know, Swigert says, is to calculate it.

The value of gain on calves is quite simply the total income you make from in-weight to out-weight. Subtract your cost of gain from that and you have a pretty good gross margin profit estimate.

To read the entire article, click here.


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