The feedlot returns calculated by the Livestock Marketing Information Center have climbed higher as live cattle prices have hit records.
“April cattle feeding returns calculated by LMIC soared over $300 per head in April as live steers in the 5-area recorded record-breaking highs at mid-month,” the marketing center said. “Live steer prices hit a new daily high of $182.86, more than $10 higher than the previous daily high of $172.08 per cwt that was recorded back in late November 2014.”
April was a month of record prices and strong feedlot profits.
“Nearly all of April recorded prices above that previous record,” the LMIC said. “The monthly simple average calculated in Dodge City (price used in the LMIC calculation) for Choice fed steers was $173.43 per cwt, equivalent to what feedlots were paying for 700-800-pound steers seven months prior. LMIC calculates a breakeven price at time of placement, which was estimated at $149.96 per cwt.”
These numbers show the continuation of a trend over the last few months, the marketing center said.
“Cattle feeders are enjoying a hot run, seeing profitability exceed $100 per head in the last three months,” the LMIC said. “Higher fed-cattle prices are contributing significantly to that bottom line, but additionally feed costs have come down slightly, and April’s calculation is based off a feeder steer price that dipped $6 from the month before. Dodge City 700-800-pound steers averaged $195.26 per cwt in April, exceeding breakeven projections to just under $160 per cwt. Current prices are still over that value but have faded more than $10 from the high in mid-April.”
Analysts are watching these developments in the context of seasonal trends and the overall supply.
“Seasonally, fed cattle prices should be hitting a bottom, and with higher placements than the industry expected, this fall live cattle market may not be as tight as originally expected,” the LMIC said.
However, the marketing center is expecting a good year overall for cattle feeders, with estimated profits in every month and good returns per head for the year.
“Still, cattle feeders are expected to have an excellent year, with no month currently projected to be negative in 2023,” the Livestock Marketing Information Center said. “LMIC estimates the average returns for cattle feeders will be over $200 per head in 2023. Through April, cattle feeding returns have averaged $175 per head monthly.”