Feedlots to Add Wheat to Rations

US - Decreasing wheat prices and increasing corn prices are bringing the two grains into an alignment that is causing cattle feeders to sit up and take notice.
calendar icon 17 February 2007
clock icon 2 minute read
"It's something a feedlot can't ignore," said Paul Engler, chairman of Cactus Feeders, which has large-scale feedyards throughout the Texas High Plains and southwest Kansas.

Wheat is usually too expensive to use as cattle feed, but prices have fallen to the point where some feedyards have started to incorporate it into rations, replacing corn, he said.

Corn usually composes 80 percent to 85 percent of a feedlot ration. Roughage, such as hay, accounts for another 15 percent, and a protein supplement fills in the last 5 percent.

"Right now it is attractive to feed wheat here in the Panhandle area," Engler said. "If that price relationship continues, you will probably see more (wheat being fed)," though probably not a lot until new crop wheat is available, he added.

If more feedlots opt to add wheat to rations, wheat demand could increase while the demand for corn could decline, at least on local levels.

"Historically, wheat prices within 25 to 50 cents of corn are where feeding starts to occur, and we are dropping into this area this week," said DTN Contributing Analyst David Fiala.

Chicago Board of Trade March corn futures closed Thursday at $4.07 per bushel, while Kansas City wheat futures ended the day 9 cents higher at $4.86 per bushel. Chicago wheat markets followed the lead of the Kansas City market, closing at $4.53 per bushel, up 2 1/4 cents.

Source: Journal
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