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Cattle feeding profit outlook brightens

Photo courtesy Kansas Livestock Association

Photo courtesy Kansas Livestock Association

Many cattle feeders have not seen a profit since December of 2014. But Purdue University ag economist Michael Langemeier says the picture is looking brighter.

“For May and the next few months, if we don’t see further price declines or if prices are close to the forecasted prices, we’re looking at a situation that’s a lot closer to breakeven—with possibly even some small profits per head,” Langemeier says. “That’s certainly good news after this long period of losses.”

Langemeier says breakeven prices for May and June are expected to range from 125 to 127 dollars per hundredweight. He says current projected fed cattle prices from the Livestock Marketing Information Center for the second quarter range from 130 to 132 dollars.

“Again, the caveat there is what happens to fed cattle prices,” he says. “If they stay within what we’re currently forecasting them to be, it’s certainly looks like a pretty good period to feed cattle compared to where we’ve been the last 15 months.”

Langemeier says continued reductions in feed costs are contributing to the improved outlook. He says feeding cost of gain is expected to range from 75 to 80 dollars per hundredweight for the rest of 2016.  That compares to an average feeding cost of gain of 85 dollars in 2015.

AUDIO: Michael Langemeier

Link to Langemeier’s article on farmdocdaily web site

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