Some feedlots report better profits despite increase in feed costs
By CAROL RYAN DUMAS
Cattle on feed for slaughter in Idaho feedlots totaled 230,000 head on May 1 -- 10 percent higher than the previous year and 5 percent higher than April 1.
April placements into feedlots also rose, 7,000 from last April to total 34,000 head, according to the USDA National Agricultural Statistics Service. The agency's report tracks feedlots with the capacity for 1,000 or more cattle.
Healthy cattle prices are likely behind the increase, said Vern France, customer service representative with Intermountain Beef in Eden.
"Feedlots have been a little bit profitable, and they're more willing to place cattle when they're making a little money," he said.
Fat cattle live prices of $135 to $140 a hundredweight and dressed prices at $170 a hundredweight offer good incentives, he said.
"It's hard for me to get used to these high prices," he said.
Historically, prices have been closer to $80 to $100 a hundredweight on a live weight basis, but they were $118 a hundredweight in March and April, he said. Prices are even higher now.
"They've come up considerably from the highs back then," he said.
Idaho's cattle inventory is up. At 446,000 head, the Jan. 1 breeding herd is up for the first time since 2004, said Wilson Gray, extension livestock economist at the University of Idaho's Twin Falls Research and Extension Center.
That number declined year over year to 440,000 animals in 2010 from 488,000 in 2004.
With high prices across the board, producers may have decided to let go of replacement heifers, he said.
"Maybe they're taking advantage of prices," he said. "'Is it going to pay to keep them or should I take the money now?'"
The concern with animals going into a background program is the cost of grain, he said.
"So far, prices through the system are holding up, and feedlots feel they can still make some money even with the high cost of feed," he said.
Nationwide, cattle on feed for slaughter is also up. At 11.2 million head, it's up 7 percent from the previous year. Placements in April were up 10 percent from a year ago to 1.8 million head and the second highest for April since reports began in 1996.
Contributing to the higher national numbers is the worst drought in Texas in 45 years, Gray said.
"There's no feed there; they're pretty much moving everything to feedlots," he said.
But it's going to get harder to find cattle to place as producers hold back to build herds, he added.