This Week in Grass Cattle

I think most guys are realizing they have way more grass than they have cattle this year and I have gotten five calls today from guys wondering if it is too late for grass cattle.

As I stated last week, for grass cattle alone, the answer is yes, it is too late. I can't find any steers or heifers right now that would pencil with only 65 days or so left in the grazing season.

A lot of this is due to the fact that there very light runs at the sale barns this time of year, so any cattle that are available are pretty spendy. On top of that, the SEP 10 did rally 250 pts. very breifly last week, as I expected but it wasn't sustained, also as I expected.

We are sitting about 92 points higher than we were last weeka t this time, but that's not enough to make these cattle pencil right now.

So to make cattle work on grass is going to require some time in the background yard and a sell on the NOV 10 to stay out of the red.

Let's look at some cattle that work:

Buy steers, medium 1, 748# @ $116.00
Sell NOV 10 @ $113.20
Grass for 65 days @ $0.72/day
Background 60 days at $0.70/lb. gain
Sell 957#
Breakeven = $107.91
Profit = $50.60 per head less basis and commissions

Buy steers, medium 1, 808# @ $112.50
Sell NOV 10 @ $113.20
Grass for 65 days @ $0.72/day
Background 60 days at $0.70/lb. gain
Sell 992#
Breakeven = $107.19
Profit = $59.54 per head less basis and commissions

Buy heifers, medium 1, 623# @ $117.33
Sell NOV 10 @ $113.20
Grass for 65 days @ $0.72/day
Background 60 days at $0.70/lb. gain
Sell 832#
Breakeven = $107.41
Profit = $48.09 per head less basis and commissions

Buy heifers, medium 1, 708# @ $110.63
Sell NOV 10 @ $113.20
Grass for 65 days @ $0.72/day
Background 60 days at $0.70/lb. gain
Sell 892#
Breakeven = $105.12
Profit = $72.05 per head less basis and commissions

Buy heifers, medium 1, 831# @ $101.25
Sell NOV 10 @ $113.20
Grass for 65 days @ $0.72/day
Background 60 days at $0.70/lb. gain
Sell 990#
Breakeven = $99.73
Profit = $133.25 per head less basis and commissions

Again, the heavier cattle are working pretty nicely in this arrangement as they are grossly undervalued. The mid-weights are working well too, and may work even better if you can feed them a bit longer on a JAN 11 contract with a cheap cost fo gain.

The heifers are still amazingly undervalued in this cash market. It's really unbelievable. If any of you have any mid-8 heifers you want to get rid of, let me know.