By Andrew Griffith
A question was asked a couple of weeks ago concerning if now was a good time to put cattle in the feedlot. This is a question that should be asked frequently, because it is a difficult question to answer with a general statement.
The most general statement to answer this question would be to send cattle to the feedlot if one thinks feeder cattle are seriously undervalued and finished cattle prices are expected to increase. The alternative is also true. If feeder cattle appear to be overvalued and there does not appear to be any upside potential in the finished cattle market then the cattle should be sold as feeders.
These scenarios may seem obvious, but many times the answer to this question is not obvious. It generally takes pen and paper to run the math if feeding cattle is going to be profitable or not. This still does not provide a guarantee, but knowing there is a chance at a profit at least provides an opportunity to make a decision. Another factor that plays into the decision is how efficient the cattle are and how they are expected to grade.
Source : osu.edu