Dr. Glynn Tonsor, a livestock market economist at Kansas State University Extension, says cattle feedlots may have tough times ahead.
He told the Radio Oklahoma Network that his most recent feedlot study doesn鈥檛 look healthy for the beef cattle industry from this fall into early next year. He warned of red ink for the feedlot business beginning in September and continuing through next spring.
鈥淭he returns are projected to be negative,鈥 he says. 鈥淭he main reason is, yes, fed cattle prices are expected to go up, but nowhere near the rate that the incoming feeder cattle prices have gone up.鈥
He says the main profit drivers for feedlots are what they pay for cattle coming in, how much it costs to feed them, and what they bring at sale time. If they pay more on incoming cattle than they make on sale day, margins get squeezed, which he predicts from September-March.
