Cattleyard that sits empty...

[Joes3406]

Ill begin with I do not have much cattle experience. We have a feedlot that sits empty and has been for about 10years now. I run a trucking business and have been debating on fixing the place back up and putting cattle in agian. I enjoy livestock and was thinking maybe getting into the old family business of feeding/hauling cattle agian. Our lot used to hold about 1200 head. We have zero pasture. Would it be smart getting back in the business of cattle nowdays? I gues im just looking for sum advice. We do farm but far as most of the equipment needed id haft to go buy. The lot will need sum updating but for the most part its all there. any advice would be appreciated. Thanks

 

[Big Swede]

I've heard of lots of operations in your situation, farms that haven't fed cattle for years are thinking about doing just that. It might be the only way to make anything on your grain for a few years. I say go for it.

 

[Denny]

Better be ready for daily work every day through out the winter christmas included. My grain farmer relatives have alot of down time they don't have to go out in blizzards,or mess around getting cold equipment running.It will be a life changer.

 

[jodywy]

Been told the best way is keep if full. Sell high cattle buy high cattle. Sell low cattle buy low cattle. Problem is you sell low cattle you bought high, but then when you sell low you fill it back up low.

 

[BRG]

I think it sounds like a good idea. We are in a stage of the beef industry that I think is here to stay. I truly believe we are past the cycles. When we deliver bulls across the country, anything that can be farmed, is, and the grass is gone. The restocking will not happen to the extent as some say it will happen as it isn't possible since it is all farmed up. You can't make a pasture in a year, and I don't think it will ever get planted back to grass in the highly productive farming areas as the corrals are now gone, and the feedlots are farmed.

Now look at the population. Take China alone, who is now the #1 beef importing nation in the world. They may not import beef for the U.S., but whatever they buy from some other country will now make a country that we do sell to in short supply on beef, which helps us. China has 1.4 billion people, and the US processed 25 billion lbs of beef. That means the average Chinese person only needs to eat 18 lbs of beef in an entire year to use our entire yearling production. Now that they got the tastes of beef(which is relatively new to them) things could get completely wild.

 

[katrina]

I wouldn't touch it with a ten foot pole.

 

[Big Swede]

I think it sounds like a good idea. We are in a stage of the beef industry that I think is here to stay. I truly believe we are past the cycles. When we deliver bulls across the country, anything that can be farmed, is, and the grass is gone. The restocking will not happen to the extent as some say it will happen as it isn't possible since it is all farmed up. You can't make a pasture in a year, and I don't think it will ever get planted back to grass in the highly productive farming areas as the corrals are now gone, and the feedlots are farmed.

Now look at the population. Take China alone, who is now the #1 beef importing nation in the world. They may not import beef for the U.S., but whatever they buy from some other country will now make a country that we do sell to in short supply on beef, which helps us. China has 1.4 billion people, and the US processed 25 billion lbs of beef. That means the average Chinese person only needs to eat 18 lbs of beef in an entire year to use our entire yearling production. Now that they got the tastes of beef(which is relatively new to them) things could get completely wild.

It's hard to believe how the mindset of the American farmer changed so quickly. From the frenzy of breaking ground and selling $7 corn to considering buying and feeding cattle in the space of two years. But can you blame them? We are a diversified operation but if we were strictly grain it would be pretty bleak for the foreseeable future. Cattlemen know as well as anyone that selling your product and breaking even or even losing money isn't sustainable for very long.

 

[Red Barn Angus]

I wouldn't touch it. In any market whether it be cattle, grain or the stock market you can tell when it is reaching the top when lots of folks who have limited experience in the field want to spend big bucks to get into it. Many times they will lose their shirt. You admit you lack experience and facilities and you have to stock the feedlot. If I were your banker I know what I'd tell you and I was one for 30 years. If you want to feed a couple hundred head with the tools you now have then maybe so but it's no time to be spending big bucks to get into something at the very top of the market. Any time prices get this high everybody wants a piece of the action but when it falls....and it will fall...you need to be prepared, not in debt up to your ears. Look at the grain farmers squirming now that bought big fancy machinery based on $7 corn. Right now the cattle market is in the perfect storm...low numbers, cheap feed and still decent demand. This corn crop is only 20% harvested nationwide. A spell of bad weather could damage a lot of the anticipated record corn crop. If corn went up a buck what would cattle prices do? This is not the time to gamble 7 figure money on something you lack experience in. Just my two cents.

 

[katrina]

I wouldn't touch it. In any market whether it be cattle, grain or the stock market you can tell when it is reaching the top when lots of folks who have limited experience in the field want to spend big bucks to get into it. Many times they will lose their shirt. You admit you lack experience and facilities and you have to stock the feedlot. If I were your banker I know what I'd tell you and I was one for 30 years. If you want to feed a couple hundred head with the tools you now have then maybe so but it's no time to be spending big bucks to get into something at the very top of the market. Any time prices get this high everybody wants a piece of the action but when it falls....and it will fall...you need to be prepared, not in debt up to your ears. Look at the grain farmers squirming now that bought big fancy machinery based on $7 corn. Right now the cattle market is in the perfect storm...low numbers, cheap feed and still decent demand. This corn crop is only 20% harvested nationwide. A spell of bad weather could damage a lot of the anticipated record corn crop. If corn went up a buck what would cattle prices do? This is not the time to gamble 7 figure money on something you lack experience in. Just my two cents.

:agree:

Wheat is on the climb and they are paying for protien.

 

[3 M L & C]

From what I see around here. Feeding cattle is more about being in it and staying in it. Instead of cattle high and corn low. Now a good time. Every time corn goes down a little the price of feeders goes up. The one outfit that I know that feeds a lot of cattle will tell you the most money they ever made on cattle was when corn was 6 dollars. They just keep their feedlot full 100% of the time and must be doing alright cause their still doing it.

 

[Mike]

The money made in a feedlot comes from selling the feed. You might feed a few of your own, but the overwhelming majority should be owned by others.

It's also become a science. You'd have to hire a good manager.

 

[3 M L & C]

The money made in a feedlot comes from selling the feed. You might feed a few of your own, but the overwhelming majority should be owned by others.

It's also become a science. You'd have to hire a good manager.

Not the feedlots I know. Including the one you said your cattle were fed at.

 

[Faster horses]

I wouldn't touch it. In any market whether it be cattle, grain or the stock market you can tell when it is reaching the top when lots of folks who have limited experience in the field want to spend big bucks to get into it. Many times they will lose their shirt. You admit you lack experience and facilities and you have to stock the feedlot. If I were your banker I know what I'd tell you and I was one for 30 years. If you want to feed a couple hundred head with the tools you now have then maybe so but it's no time to be spending big bucks to get into something at the very top of the market. Any time prices get this high everybody wants a piece of the action but when it falls....and it will fall...you need to be prepared, not in debt up to your ears. Look at the grain farmers squirming now that bought big fancy machinery based on $7 corn. Right now the cattle market is in the perfect storm...low numbers, cheap feed and still decent demand. This corn crop is only 20% harvested nationwide. A spell of bad weather could damage a lot of the anticipated record corn crop. If corn went up a buck what would cattle prices do? This is not the time to gamble 7 figure money on something you lack experience in. Just my two cents.

I'd say that was excellent advice.

We have friends and customers that feed some cattle to run as yearlings. They do it every year. This year they are playing a waiting game to see what happens before they jump in and buy.

Good luck whatever you decide.

 

[Red Barn Angus]

FH, I'd say if they can hedge a profit in them then go ahead and buy them. If not sell the corn and buy puts. If corn should increase a little then they would gain. If not they only lost their futures money and they can sit in front of the fireplace in January and take a nap. Sometimes it is cheaper to do nothing.

 

[Big Muddy rancher]

I wouldn't touch it. In any market whether it be cattle, grain or the stock market you can tell when it is reaching the top when lots of folks who have limited experience in the field want to spend big bucks to get into it. Many times they will lose their shirt. You admit you lack experience and facilities and you have to stock the feedlot. If I were your banker I know what I'd tell you and I was one for 30 years. If you want to feed a couple hundred head with the tools you now have then maybe so but it's no time to be spending big bucks to get into something at the very top of the market. Any time prices get this high everybody wants a piece of the action but when it falls....and it will fall...you need to be prepared, not in debt up to your ears. Look at the grain farmers squirming now that bought big fancy machinery based on $7 corn. Right now the cattle market is in the perfect storm...low numbers, cheap feed and still decent demand. This corn crop is only 20% harvested nationwide. A spell of bad weather could damage a lot of the anticipated record corn crop. If corn went up a buck what would cattle prices do? This is not the time to gamble 7 figure money on something you lack experience in. Just my two cents.

I'd say that was excellent advice.

We have friends and customers that feed some cattle to run as yearlings. They do it every year. This year they are playing a waiting game to see what happens before they jump in and buy.

Good luck whatever you decide.

I agree that I don't think this is the time to jump in after 20 years away. Could be an expensive lesson learning how to feed cattle again.
I know some that bought grassers in the spring still making $500/hd but I don't see that margins being that good with these $1500 calves. Different if your reinvesting back in cattle but it will still hurt to lose.

 

[Mike]

The money made in a feedlot comes from selling the feed. You might feed a few of your own, but the overwhelming majority should be owned by others.

It's also become a science. You'd have to hire a good manager.

Not the feedlots I know. Including the one you said your cattle were fed at.

All the big lots, and even some small ones, are in touch with investors that can own a pen or two or three. And there are many producers that feed their own.

 

[redrobin]

I wouldn't touch it. In any market whether it be cattle, grain or the stock market you can tell when it is reaching the top when lots of folks who have limited experience in the field want to spend big bucks to get into it. Many times they will lose their shirt. You admit you lack experience and facilities and you have to stock the feedlot. If I were your banker I know what I'd tell you and I was one for 30 years. If you want to feed a couple hundred head with the tools you now have then maybe so but it's no time to be spending big bucks to get into something at the very top of the market. Any time prices get this high everybody wants a piece of the action but when it falls....and it will fall...you need to be prepared, not in debt up to your ears. Look at the grain farmers squirming now that bought big fancy machinery based on $7 corn. Right now the cattle market is in the perfect storm...low numbers, cheap feed and still decent demand. This corn crop is only 20% harvested nationwide. A spell of bad weather could damage a lot of the anticipated record corn crop. If corn went up a buck what would cattle prices do? This is not the time to gamble 7 figure money on something you lack experience in. Just my two cents.

I'd say that was excellent advice.

We have friends and customers that feed some cattle to run as yearlings. They do it every year. This year they are playing a waiting game to see what happens before they jump in and buy.

Good luck whatever you decide.

I agree that I don't think this is the time to jump in after 20 years away. Could be an expensive lesson learning how to feed cattle again.
I know some that bought grassers in the spring still making $500/hd but I don't see that margins being that good with these $1500 calves. Different if your reinvesting back in cattle but it will still hurt to lose.

You didn't see the 500 dollars per head in the spring either or the 500 dollars before that. No one can predict the future.

 

[3 M L & C]

The money made in a feedlot comes from selling the feed. You might feed a few of your own, but the overwhelming majority should be owned by others.

It's also become a science. You'd have to hire a good manager.

Not the feedlots I know. Including the one you said your cattle were fed at.

All the big lots, and even some small ones, are in touch with investors that can own a pen or two or three. And there are many producers that feed their own.

Feedcattle.com very few cattle in these feedlots are fed for others. They also just bought Decatur county Feedyard.

I'm not saying I would do it but it can be done. The problem is getting started. Can you afford to borrow money for equipment to get started fill it up with cattle loose $200 a head pay all the interest and then fill it up again?

 

[Big Swede]

The money made in a feedlot comes from selling the feed. You might feed a few of your own, but the overwhelming majority should be owned by others.

It's also become a science. You'd have to hire a good manager.

I think this is the most important post of this whole thread, the guy never said he was going to own all the cattle in the feedlot, he just said he was interested in feeding cattle. What a great opportunity to sell his grain and diversify.

 

[Joes3406]

Thanks for all the opinions and advice. I should of made my self clear on cattle experience. We have fed our own cattle for 20+ years. Had 4 pots goin hauling our own cattle. I say lack of experience because it's been 10 years and in any business things change fast. Like I said in my previous post we farm and have a small trucking business. I surely didn't mean to affend anybody by saying the yard holds 1200/hd and that I was gonna fill it with cattle and be a no it all big shot. We have guys cut our rates in the trucking industry that come and go because they can't make ends meet. If we start feeding cattle again it would be for the long haul. Like farming we have our good years and bad. I'm just wondering if this is a good time to start back up again. Basically no overheoad as we have most of the equipment and the yard is there. Just gonna need sum updating with waters, bunks, etc. Our trucks haul ag commodities so far as feed ingredients goes. We have the equipment to haul it ourselves. I just see the lot sit there empty and think it's a shame. Im not Lookin to buy a million bucks worth of cattle. Like everything else Id start with what a guy can and see what happens. Maybe custom feed. Or dig a hole.. Tear up the concrete and farm it. Thanks for everyone's advice!