July 20, 2012

High wheat prices boost up feedlot costs

Due to high wheat prices, the grain bills for cattle feedlotters are increasing by thousands of dollars.

The US heat wave and problems with the wheat and barley crops in Russia have pushed the price above US$300 a tonne. Market analyst Angus Brown says that's expensive for any farmer who's feeding grain to livestock.

"If you're feeding a 100-day steer, you'd put 1-1.5 tonnes of grain into it, so your cost of production's gone up on that particular animal US$70, US$80, US$90 or US$100 for the three months they're in the feedlot," he said.

"Poultry and pig producers have less scope to move around their other input costs rather than cattle feedlotters, who can put a bit of pressure on the feed price."