Higher marketing costs in the Northern Plains have offset this difference, but NPPB offers an opportunity to offset these higher marketing costs and help Northern Plains producers capitalize on favorable feeding economics. Northern Plains beef producers now have the opportunity to feed the cattle at home, in custom feedlots or in cooperative feedlots. To date, five cattle finishing cooperatives are being proposed for North Dakota alone. Feeding the calves at home adds value to farm or ranch resources. Many commercial feedlots have consulting nutritionists, marketing and risk management specialists, and other professionals whose sole objective is profitable cattle feeding.
Cooperative feedlots can provide similar professional services to their members.
John Lawrence, an extension economist at Iowa State University, has compiled one of several sets of data that provide insight into the past profits from retained ownership. Lawrence's data, covering 1983 until 1995 with fed cattle sold in 1984 to 1996, compares profits from different marketing strategies for beef farmers. Let's review his study of five beef cow market strategies. Calves are weaned and sold on Nov. 1. This strategy produced a lower average and a lower maximum annual net return than did the feedlot strategies.