Feed Cost Frenzy

Sep 6, 2022

It’s the latest in a swath of price increases troubling farmers and pilfering profits. Feed costs are squeezing livestock producers, and projections are saying… dollar bills: they’re what’s for (livestock’s) dinner.

Feed costs are the biggest cost category for livestock producers. For cow-calf producers, chow makes up a whopping 75% of operating costs.

Across the board, feed prices are expected to jump 14.9% because of higher commodity prices. You know what they say: rising commodity prices raise all feed costs.

Cows gotta eat: The feed cost to finish weight on a steer was 25% higher for cattle marketed in August and is projected at 31% higher for cattle just placed on feed last week.

Cattle feeder profits are sitting at $138 per head, up 15% from the same week a year ago.

Where’s the beef (feed)? The 2021-22 season-average farm price for corn is currently projected to be $5.95 per bushel. That price (the highest since 2012-13) is great for corn producers and not so great for cattle farmers who use it as their primary feed grain.

Turning away from the kernel isn’t an easy alternative either: prices for sorghum, oats, and barley are also projected to rise year over year. Even hay is estimated to be 16% higher than the 9-year average.

Packers paying: Beef packer margins are down 89% from the $1,100 per head estimated margins from a year ago. Pork packers saw $68 profit per head less than last year, and are running in the red.