The feeding world can be a foreign one for many cattlemen to navigate, but that doesn’t mean they must journey it alone. Rather than selling calves or backgrounded feeders for a commodity price, partnering or retaining ownership with a feedlot sometimes allows for additional profit opportunities.
This video shares more tips for finding the right feedlot.
Finished cattle may be sold through value-based, “grid” markets that pay on animals’ individual carcass merit while tracking calf performance. Feedyards can report progress on rates of gain and feed efficiency.
“For cow-calf producers who want information to take back to the ranch for their sire selection and cull-cow programs, this data is so critical,” says Mark Sebranek, manager of Irsik and Doll Feed Yard near Garden City, Kansas. “That carcass information tells a lot of stories producers can’t get any other way.”
Fifty-fifty is the most popular partnering arrangement, but some feedyards will consider any percentage.
Dan Loy, Iowa State University feedlot management professor, says, “Partnering on a pen of cattle gives producers confidence that the feedlot is willing to share in both the risks and rewards of a retained ownership relationship.”
Some feedlots also take on banking functions, financing cattle, feed, transportation and other expenses at competitive interest rates with no payments until cattle are sold.
It’s important to determine your expectations first.
“A feedyard must provide the services a producer thinks are important, and they have to do it in a cost-effective way,” Loy says. Managers should provide detailed performance reports, closeouts that explain yardage and feed charges, chute fees, typical medical costs and any other financial obligations.
The bottom line, Sebranek says, is who do you trust? “If you’re not comfortable with a feedyard, then it’s not going to work, no matter if they do a great job for you or not.”
By Miranda Reiman, assistant director of industry information for Certified Angus Beef.