Happy Tuesday evening to one and all.  Today, a wee lesson in personal responsibility and decision-making - feedyard style.  Average feedlot profitability is not a pretty sight to behold right now, but the operative word there is AVERAGE.  I tend to deal with the ABOVE AVERAGE cattlemen, so naturally, my guys tend to see ABOVE AVERAGE P&Ls.  I was visitng with a feedyard manager and friend in Illinois this afternoon, and that conversation inspires today's post.

Illinois isn't thought of as prime cattle feeding country these days, but I beg to differ.  Illinois has abundant corn with a substantially weaker basis than the central US.  It also has the huge advantage of its proximity to the fabulous cattle markets of KENTUCKY.  I love Kentucky.  God bless Kentucky.  As I was discussing with Mr. Illinois feedlot man this afternoon, we always have a CHOICE in our profitability.  Here is what most feedlots in Illinois are doing right now:

SELL 1250# fat heifers @ $85.00
BUY 827# top-quality steers @ $96.39 out of Kentucky
Return on the Gain = $0.63 per pound
LOSS per head with an $0.80 cost of gain = ($71.91)

UGLY.  But, it was a CHOICE.  Why a choice you ask?  Because, a guy could have chosen this instead:

SELL 1250# fat heifers @ $85.00
BUY 896# Med-Lrg 1-2 heifers @ $75.84
Return on the Gain = $1.08 per pound
PROFIT per head with a $0.95 cost of gain = $46.02 per head

Beautiful.  Please note that I kicked the gain cost up to $0.95 to cover all manner of excuse-making that one could throw at me.  Heifers have a lower feed conversion?  It's priced in.  A percentage might be bred?  It's priced in.  Females are generally more taxing and difficult to be around than males?  Agreed, and priced in, baby. 

Whether you feed cattle in Illinois, Nebraska, Idaho, Alberta or the Texas Panhandle, profitability is available.  We just have to learn to intelligently and rigorously CHOOSE it.

Forecasters are killing the North American Cattle Industry.
"Global warming" is a complete fraud designed to advance the cause of socialism and enslave humanity.
Abortion is the murder of an innocent human being and is never justified under any circumstance whatsoever.
Every human being is a question, to which the ONLY answer is Jesus Christ.   

Ann Barnhardt
Barnhardt Capital Management, Inc.
www.Barnhardt.biz
888-799-4577
Ann@Barnhardt.biz

Bud Williams Marketing, Inc.
www.BudWilliamsMarketing.com
877-799-4577
Ann@BudWilliamsMarketing.com