# Live vs. Feeder cattle



## ANewman

I don't know much about cattle, but when I look at commodity prices there is a distinction made between live cattle and feeder cattle. I'm just curious, what is the difference?


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## swmnhay

Live cattle are ready for slaughter.Here are the CME specs.

http://www.cmegroup.com/trading/agricultural/livestock/live-cattle_contract_specifications.html

Feeder cattle are cattle going on feed 650-850 lbs,here are CME specs.

http://www.cmegroup.com/trading/agricultural/livestock/feeder-cattle_contract_specifications.html


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## ANewman

Why are feeders priced higher? It seems to me live cattle would be higher because they've been fed and ready for slaughter.


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## Nitram

price per pound heavier weight lower per pound price but tends to be more per head. a feeder will gain more weight bringing profit at next step. clear as mud? Martin


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## ANewman

Nitram said:


> clear as mud? Martin


Yep... not sure I follow tho

After feeders reach slaughter weight u get less $ per lb?


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## Nitram

Yes but more per head


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## swmnhay

I'll try to explain it.

Feeder at 600 lbs x $1.60 = $1060
Feed costs to fatten 600 to 1400 lbs = 800 lbs of gain @ $1.00 per lb = $800
total cost to fatten a feeder to market.$1860

Selling price 1400 lbs x $130=$1820

$40 loss

So need to pay less for the feeder
get more for the fats
or put on gain for less $

Wecome to the world of feeding cattle


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## steve in IN

Maybe this helps. The profit is made by putting the weight on the feeder to get it to slaughter. The cheaper the cost of gain the more profit. hope this helps.


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