Continued declines in prices to keep returns negative

Continued declines in prices to keep returns negative

Returns expected to improve by mid-2017.

Kansas State University livestock economist Glynn Tonsor recently released the estimated net returns of Kansas cattle finishing operations, suggesting upcoming closeout months will remain negative.

The most recent Focus on Feedlots survey provides information on lots closed out in August of 2016 in which steers and heifers were estimated to be sold in August at losses of $108.68/head (hd) and $75.87/hd, respectively (Figures 1 and 2).

Currently, the net returns projected for closeouts in September are losses of $229.43/hd for steers and $204.16/hd for heifers.

"The projections reflect continued declines in expected fed cattle prices since early September suggesting upcoming closeout months in 2016 will exceed $200/hd losses," noted Tonsor. "Current placements targeting March to June closeouts are more positive reflecting substantially lower feeder cattle placement prices."

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