This Week In Grass Cattle

A fairly strong week in the cash market. As we look forward, the grass window has closed for the most part. However, I do see some opportunities to capitalize on the 75 days remaining in the grazing season season and a 60 backgrounding period.

The keys will be to get the right kind of cattle bought right. Poor converting cattle and cattle that are too big aren't going to work. The heavies should probably go straight to feed as even with our good growing season, grass quality is declining rapidly and performance on grass just isn't going to suppport the financials.

Let's look at how some of this pencils:

Buy steers, medium 1, 622# @ $122.25
Lock in a NOV 11 @ $111.22
Grass for 75 days @ $0.72/day
Background for 60 days with a cost of gain of $0.70/lb.
Weight out: 884#
Breakeven: $106.20
Profit $44.40/head less basis and commissions

Buy steers, medium 1, 781# @ $115.17
Lock in a NOV 11 @ $111.22
Grass for 75 days @ $0.72/day
Background for 60 days with a cost of gain of $0.70/lb.
Weight out: 1020#
Breakeven: $105.62
Profit $57.17/head less basis and commissions

Buy heifers, medium 1, 665# @ $114.11
Lock in a NOV 11 @ $111.22
Grass for 75 days @ $0.72/day
Background for 60 days with a cost of gain of $0.70/lb.
Weight out: 900#
Breakeven: $103.20
Profit $72.16/head less basis and commissions

Buy heifers, medium 1, 742# @ $110.00
Lock in a NOV 11 @ $111.22
Grass for 75 days @ $0.72/day
Background for 60 days with a cost of gain of $0.70/lb.
Weight out: 959#
Breakeven: $103.70
Profit $72.07/head less basis and commissions

At this stage of the game, grass alone isn't going to pencil, however, grass and 60 days on a grow diet can result in some significant black ink.

As has been the case for the last month, heifers are really undervalued. This is a definate advantage to those that are paying attention.

I would still stay away from the heavier cattle unless you are going to go straight to feed with them.