We’re going through some very challenging times in the cattle feeding industry. Losses have been sustained now for well over a year. I believe the reason for this is an over capacity in the industry of roughly 20% to 25%. This is usually the way the market weeds out the companies that will discontinue feeding.
Here at High Choice, we have made the decision to let pens remain empty, unless we can find feeder cattle that give us a realistic expectation of being profitable. The industry mentality is that you need to keep all pens full all the time. In my view, it is just not smart business. Patience is the key to being financially successful for the long term in this Industry. If the margins are not working for us today, then we will let somebody else own cattle and wait for a better opportunity down the road. Cattle feeding margins will turn around; they always do.