Guidelines for bidding on feeder cattle in a volatile corn market
“What price can I afford to pay for alternative types and weights of feeder cattle and cover my costs?”
The uncertain and highly volatile corn market and short supply of feeder cattle supply both contribute to challenging decisions facing cattle feeders in the coming year. One tool cattle feeders use to assist in their procurement and pricing decisions is break-even analysis: “What price can I afford to pay for alternative types and weights of feeder cattle and cover my costs?”
A series of breakeven analyses are presented to assist Michigan cattle feeders in making the decision on prices to bid for alternative types and weights feeder cattle at alternative corn prices and finished cattle sale prices. These are based on representative Michigan feedlot performance budgets and an estimate of current yardage (ownership and operating) costs.