Iowa Farmer Feeder Cites Favorable Corn and Cattle Basis As Competitive Advantages

The cattle feeding business is unique in Iowa. Instead of the large feedlots spanning tens of thousands of head, Iowa is made up of many smaller farmer feeders.

Northern farmer feeders like Lauritsen Cattle Company of Exira, Iowa, have distinct advantages versus feed lots in the South, including their favorable corn and cattle basis as well as their attention to detail.

The family owned custom yard feeds 4,000 calves and yearlings year-round.

Ty Lauritsen runs the operation with his sister and father and says they feed cattle from all over the U.S. in part due to the attractive corn prices found in western Iowa.

"Especially over the last couple of drought years, our corn basis has been significantly better, more favorable to the cattle feeder up here than it has been down South," he explains.

Plus, he says the availability of DDGs and corn they buy from local farmers enhances their closeouts.

"We grow a lot of silage, then purchase all of our grains and feed byproduct from the local ethanol plants around. There's a handful in this area that makes it fairly easy to get a good buy on that, so that's also one of our advantages in the Midwest," he adds.

Lauritsens market cattle primarily on a negotiated basis which he says often helps the northern cattle basis to run premium to the South.

"We've been able to sell our fat cattle higher, several dollars higher at certain weeks," Lauritsen says. "It just seems like a lot of times we do have higher quality cattle up here. They get fed more corn. The packers like those. I guess it all relates."

One of the obvious headwinds is climate, especially wintertime in Iowa.

"Besides the markets, the weather is our biggest challenge. You never know what it's going to bring," he says.