NUTRITION
Interest continues on cattle feeding with TrendSetter SLR
By Dr. Dan Netemeyer, MFA Director of Livestock Nutrition
I have received many phone calls and e-mails on feeding cattle, especially inquiries about how to make the decision whether to sell cattle or to finish. When you figure the price of feeders--whether you already own them or plan to purchase them--you need to use sale barn prices. Because sale barns are the most common source of cattle, their pricing will be the most accurate. If we know what the cattle are worth (whether you buy them or raise them), you can roughly calculate the break-even purchase or sale price.
For example, let's figure our feed cost per pound of gain based on corn prices and TrendSetter SLR pricing. What will be your feed cost per pound of gain? (To estimate, take 7 times the cost of feed per pound.)
Finisher 1 (F1) 700 to 1000 pounds
| Percent of ration |
Cost per ton |
Total cost |
| .75 corn |
$90 |
$67.50 |
| .25 TrendSetter SLR |
$200 |
$50.00 |
| Total cost per ton |
$117.50 |
| Total cost per pound |
$.0588 |
Finisher 2 (F2) 1000 pounds to finish
| Percent of ration |
Cost per ton |
Total cost |
| .875 corn |
$90 |
$78.75 |
| .125 TrendSetter SLR |
$200 |
$25.00 |
| Total cost per ton |
$103.75 |
| Total cost per pound |
$.052 |
*prices quoted are for purposes of illustration
Because the cattle will consume approximately half of their total feed on each ration, the blended grain cost is $0.052 + $0.059 = $0.111/2 = $0.0555 per pound.
Conservatively, consider 7 pounds corn and SLR per pound of gain and you have a cost of gain at 7 x $0.0555 = $0.3885 per pound. Add the price of 2 pounds of hay per head per day.
What is your break-even feeder price cost whether you are buying or selling? You can figure this by following this formula. Divide the finished weight by the purchased weight. Take this amount and multiply it by the fat cattle price. Then, subtract the amount of weight gained divided by the purchase weight. Multiply the total by the cost of gain. This is your breakeven.
Example: Take 700 pound feeder cattle at $0.90 pound. The finished weight is 1200 lbs at $0.75 pound. Use the feed cost of gain from previous example = $0.39. Here is the calculation:
(1200/700 x $0.75) - (500/700 x $0.39) or $1.29 - $0.28= $1.01 per pound. Breakeven is approximately $1.00 per pound
You can afford to have a $1 per pound invested in purchased cattle and breakeven or your cattle need to bring $1 per pound or else you should finish them.
To do this for your own operation, use your corn price, SLR price and hay price per pound at 2 pounds per head per day. Figure cost of gain at 7:1. Add 5 cents per pound for yardage, transportation, etc. These figures give you a farmgate estimate of breakeven. Remember that handling and transporation will cause shrink and that can affect overall profitability.
What is your break-even cost per pound of gain price? You can figure this by the following equation: Selling price minus purchase price divided by pounds of gain.
Example: Break even cost per pound of gain equals $0.54 per pound of gain. Here is the calculation: ((1200 x $0.75) - (700 x $0.90)) / 500 = (900-630) / 500 = $0.54 per pound. You must put the gain on for less than $0.54 per pound to make any money.
From this example, your break-even cost per pound of gain is $0.49 ($0.54 - $0.05 yardage), what price does your feed need to be to break even?
If we get a 7:1 conversion, then your feed cost needs to be no higher than $0.49 / 7 = $0.07 per pound or $140.00 per ton.
Summary: Though these break-even costs are rough estimates, they do get you in the ballpark and help you make some decisions. To improve on these break-even figures and make money would be to:
- Increase the average daily gain
- Lower the purchase price
- Lower the feed price
- Improve the feed conversion
- Sell at higher fat cattle price
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