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Midwest Cattle Feeders in Positive Position

January 18, 2011
By: Kim Watson Potts, Beef Today
2010 KWP  090
No one anticipates a major shift in where cattle are fed out, but some analysts expect growth in the number of cattle on feed in the Midwest to continue.  
 
 

Strong beef, cattle and corn prices put farmer Dale Pfundstein in the position of seeing positive returns for the majority of his farm enterprises this past year. The Sterling, Ill., farmer and

cattle feeder runs 900 head of fed cattle in a covered monoslope facility on his farm, where his family also raises corn and other crops.

Like many farmers in the Midwest, Pfundstein is taking advantage of strong cattle prices to market his grain "on the hoof" to increase his return on investment.

Jeff Pastoor, senior cattle consultant for Land O’Lakes Purina Feed, says that during the past several years there have been numerous changes with a positive impact on cattle feeding in the Midwest. "Key among these have been a growing ethanol industry and a rising corn basis between the Corn Belt and the Southern Plains," he says.

Pastoor points to USDA–National Agricultural Statistics Service data that shows cattle placements in feedyards in the Corn Belt have grown from a little more than 25% in 2004 to more than 30% in 2010, while the Southern Plains has seen relatively flat placement percentages during the same time period.

A major shift in cattle feeding regions is unlikely, but some analysts expect growth in the number of cattle on feed in the Midwest to continue in the next few years.

Growth in the Midwest can be linked to cost-of-gain advantages, Pastoor points out. "During the past 10 years, there’s been an average 15¢ per pound advantage on cost of gain," he says.

Accessibility to byproduct feed sources offers advantages as well.

Weber Beef, a 5,000-head cattle feeding facility in Illinois, has been feeding cattle since 1986. Justin Weber helps manage the feedyard with his father, David, and says that while being able to produce their own feed is beneficial, it also helps to have access to less expensive byproduct  feeds.

The Webers are close to a number of ethanol plants as well as a Tyson beef slaughter plant, which helps keep their feed costs lower. They receive regular deliveries of modified wet distillers’ grains, gluten and paunch (a byproduct from the rumen of slaughter animals) to use in rations.

While growth in ethanol production has increased corn prices and squeezed margins for cattle feeders, those in the Corn Belt benefit from producing their own corn and mixing it with less

expensive byproduct feeds to create a ration that improves the cost of gain.

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FEATURED IN: Farm Journal - January 2011

 

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