How to make money with stocker cattle

It is the time of year early May when most winter pasture stockers have been, or soon will be, sold. It was a good year. Pasture and cattle performance ADG or average daily gain across much of our service area was the best in several years.

Tips to Help if you're Considering a Stocker Cattle Operation

Gains have been as high as 2. Profits may be another matter. I am continually amazed by the wide range of purchase prices paid for similar weight cattle.

Time of purchase, both month and time of day, enters into the equation. Those who purchased stockers late last summer and early last fall benefited from drought stressed markets. Prices generally increased through the fall and early winter for lightweight stockers. The exception was late at night and early in the morning at local auction barns during the fall runs of just weaned calves. Having buyer with the fortitude to work through the night can result in significant savings over mid-afternoon purchases!

Stocker cattle convert pasture to profits (Research Brief #36) | Center for Integrated Agricultural Systems

Like many previous years, saw optimism in January. The point is, cattle that were hedged or forward cash contracted in February will make more money than similar cattle sold today.

The stocker cattle business is NOT for everybody

The sale weight of cattle plays a significant role in the price received per pound. In times of relatively cheap grain, the price received for heavier feeder cattle often means the cattleman receives very little for the last pounds of gain. The table below points this out for the early May market in Oklahoma City.

Now for the test - how are profits assessed? If one purchased lb. If it was a one-time deal, maybe it did.

But if it only represents a day interval in an ongoing operation the above analysis does not account for replacing inventory. Today, similar quality lb.

What are the implications of this analysis? The first thing that should be evident is that the costs included in the 36 cents per pound of gain better reflect returns to all inputs or this enterprise probably lost money. The second thing that is readily evident to anyone who operates within a borrowed line of credit is that it will take more money to run the same number of cattle the next time around.

If one or a combination of these does not occur, then the operation will be downsized or cattle will have to be taken in on the gain. Business Development Engagement Careers Alumni Noble Foundation.

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