University Daily Kansan
Wednesday. March 20. 1974
5
Beef...
From Page One
and some backgrounders will finish cattle in a feedlot on their own farms.
The cowardner hasn't felt the pinch that backgrounders and finishers are feeling now, according to Virgil Huseman of the Kansas Livestock Association.
HUSEMAN SAID THESE farmers fed primarily grass and more economical roughages and they didn't have to contend with the weather, as risen about 40 per cent since last summer.
But the cow herd operation requires a higher initial investment for stock and real
Huseman estimated the current cost of raising a calf to weaning at $490, which includes $250 for the mother, $10 for breeding, $3 for death loss, $5 for veterinary care, $100 for adult and $200 for feeding the cow and calf through two summers and one winter.
Ice, who has a herd of about 70 head, said good calves were selling for 55 cents a pound. Thus, the price for a 400-pound calf was $328. The price for a 300-pound calf were selling for 70 cents a pound.
IT TAKES ABOUT a year and a half from the time the cow is bred until the calf is ready to sell. If the cow is bred in May, she will be grazed during the summer and fed silage with some protein during the winter. The calf will be born in March and then the summer until the calf will be grazed during the summer until the calf is ready to sell in November.
Gene Nenumaker, a local farmer who backgrounds cattle and full feeds some, broke down the cost of raising 17 head of cattle that he bought in October.
HE SAID THEY cost him 68 cents a pound and weighed an average of 280 pounds. Including 8 per cent interest, 2 per cent death less, 42 cents a pound gain during the winter and $25 head for grazing during the winter. They also vested in a 750-pound steer by next fall.
However, the cost of gain, or the cost of adding a pound of weight to a steer, increases with weight.
The backrounder follows almost the same pattern, grazing cattle during the summer and feeding them silage and rotein during the winter.
If prices for live cattle continue as they are now, he said, he could get only about 42 tons a year.
That price doesn't allow for labor, taxes, or profits, he said.
Nunemaker said he could exisl with a 46 cant a pound price for his background
"IF I CAN make a living, that's good enough," he said.
Bruce Berns has about 600 head of cattle on his farm that he backgrounds and feeds for slaughter. He said the only way he was working in business was by raising his own grain.
But he said he could get a better return on brains by selling it instead of feeding it to cattle.
"You've got to be fairly independent and not too much of a warrier to feed cattle,"
He said the people who got in and out of producing cattle always lost. In order to be there when money is being made, he said, he must be to that here when it isn't so profitable.
THE BEEF PRODUCER can hedge by selling contracts ahead on the commodities market for his beef back on the contract. When he sells back on the contract the price goes above what he contracted for and he receives the difference if the price for his cattle is lower than the contract
The commodities market is a "guaranteed hedge". Nunakermade is a tool that keeps the commodity prices under control.
Berns said that every time he had hedged on the commodities market he had lost money. This was because the profit he realized by hedging was lower than what he could have gotten if he hadn't been locked into a price by contract.
AS BAD AS the current picture is for backgrounded cattle it's that much worse than a regular dog.
"IN ORDER TO have any reason for existence, we have to gamble on an up move."
back on its operations because of the losses but that it wasn't closing down.
Vice Munsey, manager or the Hays Land Cattle Co. estimated that his feedlot was leasing about $100 a head on the present market.
Feeder cattle are costing the feedlot about 40 to 45 cents a pound, he said, and they are selling fat cattle to the packers for $7.99 per lb. The prices averages between 47 and 53 cents a pound.
Thus, if the feedlot员 a 700-pound steer for $315 it will cost about $159 to add 300 pounds to it and the lot will get only $410 to $420 for a full feeder, a loss of $64 without including operating costs, commissions or transportation.
Grain prices are high right now, he said, and feed cattle prices are high in relation to fat cattle. If feed prices come down the market will be better for the feedlots, he said.
Munsey said that the feedlot was cutting
Berns said that when the market was low for fat cattle he could afford to wait only a week or two before he had to sell them to a packer.
ONCE THE CATTLE have reached about 1,000 pounds at the feedlot, they are sold to farmers.
As the cattle get heavier, he said, they lose their efficiency. Heavier cattle aren't as desirable as beef because they have too much fat.
After four to five months on the feedlot, the cattle are dome, Berna said, and they have been spayed.
George Gorman, manager of Sambol Packing Co. in Kansas City, Kan., said his company made almost no profit at all on beef.
Including this 40 per cent reduction in weight, he said, the beef actually costs Sambol 70.8 cents a pound. He said sides of beef were now selling for 71.5 cents a pound for choice grade beef and less for the lower grades.
Live cattle cost Sambol about 43 cents a pound, he said, and by the time it is slaughtered and hanging as sides there is only about 600 pounds of meat left.
THE PACKER'S PROFIT is traditionally one per cent of cost, Gorman said.
This profit is realized from sale of the
The money received for these credits, he said, pays for operating the packing plant and it is from the credits that the packer realizes his profit.
credits, unable by-products such as the hives, liver hearts, intigrate cells and bones
Another spokesman for the packing industry said the packing plant was just the fourth in the state.
The operations of the packer are designed to maximize the use of the animal, he said. The hides are sold to tanners, the inedible portions are refined into protein to be used for feeding, and some of the meat that is processed for consumption are sold to make dogfood.
DAVID SCHAFER, MEATS retail specialist at Kansas State University, related the current low prices for live cattle and raised poultry, issued demand for beef at the supermarkets.
He said many people had associated ground beef with lower prices so they bought more ground beef. This brings the meat down, then down, be said, to make them sell faster.
meat is a perishable product and it can't stay in the display over three days without losing its eye appeal. For this reason the supermarket ban to price all cuts to move at
He said the demand had dropped for beef, always considered a high priced commodity, because of the increase in fuel prices and the decrease in employment during the last year.
DICK CAYWOOD, MEAT supervisor for the Dillon Stores Co. said the meat department needed to make a 15 per cent margin to break even.
He said Dillon's had implemented a discount beef program in April 1972 and actually received only about a 5 per cent gross肉 on beef.
The supermarket loses about 30 per cent of a side of beef when it is cut and trimmed.
Caywood said this discount beef program as used to draw people into the stores as a way to get them to eat.
The profit margins are very narrow at every level, Gorman said, and they always
Retail prices are set by comparing history, what the competition is asking, and the per cent of the carcass that will be cut into specific cuts, he said.
If current trends in the high cost of feed grains and other inflated costs confronting the industry continue, Gorman said, it could be almost impossible in the future to provide the consumer with choice cattle at prices he is willing and able to pay.
SCHAFER SAID THE demand for certain cuts in areas of different income levels could also influence the prices, reducing their value. The managers to keep them moving at an even pace.
Watch the want ads in the Kansan.
But Caywood this factor wasn't incorporated into Dillons' pricing because of statewide price advertising. He said the use of a 10-inch slow down or speed up sales of certain cuts.
Kansas Staff Photo by DAVE REGIER
Stores Find That Ground Beef Is in Great Demand
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