Lot feeding margins uncertain despite low grain prices

摘要

Lotfeeders remain a major driver of young cattle prices in eastern Australia, as they buy on average around 30% of cattle yarded in Eastern Young Cattle Indicator (EYCI) saleyards. In this article we talk about the 'margin' for lotfeeding cattle. Thismargin is not a profit, but an estimate of the return on feeding cattle after feed costs and cattle trading margins are covered. This margin is required to cover all overheads and labour and, depending on the size of the feedlot, needs to be greater than 100 dollar per head for feeding to be profitable for a medium sized feedlot. At the time of writing (early April) the margin# for cattle being turned off from a 100 day feeding program in southern Queensland was about 100 dollar/head, while for feedlots in the Riverina the estimated margin was 183 dollar/hd, having been above 200 dollar /hd in March. The reason for the difference in margins is basically down to the lower feed grain prices in southern Australia, relative to southern Queensland, where a shortage in feed supply means it needs to be brought in.