In this edition of the Beef Buzz, we are featuring comments from Kansas State’s Dr. Glynn Tonsor, who talked at the start of this week with Shelby Varner on the K-State Radio Network. Click on the listen bar above to listen to Dr. Tonsor explain the feedlot closeouts as well as recap domestic beef demand from the latest USDA data.
Tonsor has been saying for awhile that feedlot profitability was going to be a problem for many months ahead- and this week- he has the latest figures here in September that show we have hit red ink and will likely stay there through next April.
Back in July of this year- closeouts suggested a net return for slaughter steers in Kansas feedlots averaged $73.43 per head while slaughter heifers had a positive net return of $86.6 per head.
Fast forward to the August numbers which are the latest available and just released in that September report we referenced above- and it shows a negative $17.63 for steers and a negative $21.16 for heifers as the net return for August in Kansas feedlots.
The projections for September of this year through April of 2025 is solid red- with the peak in red ink expected to come in January 2025 when steers are expected to have a negative net return of $326.57 and heifers $286.91. The next chance for a net return that is positive comes in May 2025- $40.12 for steers and $31.46 for heifers.
Tonsor offers one observation that will lessen the pain. All of these figures are cash to cash transactions- and there is no risk management associated with the figures shown in the charts above. That means no locking in feeder cattle, fed cattle or grain risk management that could help lessen the amount of red ink being seen in the next eight months.
Tonsor also talked about the latest USDA numbers for beef, pork and chicken- saying the index numbers for all three showed better demand in July of this year versus a month ago and versus a year ago. For choice beef- the July index was 14.8% better than June, 2024. Check out the full demand table by clicking on the link below.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
