Cost of Gain: Backgrounding 2013

Karl Hoppe, PhD Area Extension livestock Specialist

NDSU Carrington Research Extension Center

Cost of gain

Affected by the animal • Size and age of the animal • Previous feeding history - ‘green’, ‘fleshy’, ‘stunted’ • Sickness • Implants • Exposure to wind, snow, mud, bedding

Affected by the feed • Energy density of the feed - grain vs hay • Feed additives – monensin & lasolocid improve feed conversions • Processing and mixing • Waste/feed loss

Potential for Gain *tremendous individual differences*

Dakota Feeder Calf Show data

Project begins its 15th year on October 19, 2013 in Turtle Lake, ND

Top pen of calves • Gained 3.13 # per day of age • Feeding profit per head - $102.49

Bottom pen of calves • Gained 2.73 # per day of age • Feeding loss per head - $(105.36)

All pens of calves – 41 pens • Gained 3.02 # per day of age • Feeding loss per head - $(13.84)

Nutritionist’s view of Cost of gain components

Feed – biggest expense, determines gain

Veterinary • Small cost per pound of gain but a few deads will profoundly hurt the cost of

gain

Yardage • Usually on a per head per day charge but can be put into feed cost per ton • Wide range $0.10 to $1.00 per hd daily • Covers cost of water, feeding, machinery, insurance, labor, etc

Interest – usually a relatively small cost

Price protection • also a small cost depending on level of protection

“CalfWeb” http://www.chaps2000.org/calfweb/breakeven.asp

Breakeven Calculator

Feed Cost of Gain

Feeding Concept: maintenance cost

An animal requires energy, protein, vitamins, minerals, water, & air to stay alive, healthy, and maintain its weight.

This requires feed at a cost or ‘maintenance cost’

Simplified:

• Today - a 600# calf eats 11# of feed • Tomorrow – the calf weighs 600# -- no gain • 11# feed @ 9 cents per # = 99 cents to maintain the weight • Feed Cost for no gain $.99

Energy for gain

As an example: Corn – energy content

• Net Energy for Maintenance, NEm = 1.02 Mcal per pound • Net Energy for Gain, NEg = 0.70 Mcal per pound

The animal is actually more efficient in putting on weight than maintaining it

Simplified:

• Today - a 600# calf eats 15# of feed • Tomorrow – the calf weighs 602.5# -- 2.5# gain • 15# feed @ 9 cents per # = $1.35 to gain 2.5# • Feed Cost per pound of gain = $0.54

What if we use a feed that costs more but provides more gain?

Feed cost was 9 cents per pound. Now its 12 cents per pound

The energy content went from a 44 Mcal/lb to a 60 Mcal/lb (67% TDN vs 81% TDN) • Was 2.5 lbs gain and COG of $0.54 • Today - a 600# calf eats 15# of feed • Tomorrow – the calf weighs 603.75# -- 3.75# gain • 15# feed @ 12 cents per # = $1.80 to gain 3.75# • Feed Cost per pound of gain = $0.48

As Rate of gain increases; the cost of gain usually goes down

But… what if the feed cost was $0.15 per pound? • Today - a 600# calf eats 15# of feed • Tomorrow – the calf weighs 603.75# -- 3.75# gain • 15# feed @ 15 cents per # = $2.25 to gain 3.75# • Feed Cost per pound of gain = $0.60

Feed - TDN (energy) & prices

Oct 2012 TDN, DM basis Price • Corn 88 % $6.58/bushel • Alfalfa Hay 58 % $140 /Ton • Grass Hay 52 % $80 /T • Wheat Midds 83 % $250 /T • Barley Malt Sprouts 74 % $260 /T • Corn Silage 72 % $70 /T • Canola meal 70 % $300 /T • Dried Distiller Grains 93 % $255 /T

Feed - TDN (energy) & prices

Oct 2013 TDN, DM basis Price • Corn 88 % $4.20/bushel • Alfalfa Hay 58 % $100 /Ton • Grass Hay 52 % $80 /T • Wheat Midds 83 % $145 /T • Barley Malt Sprouts 74 % $160 /T • Corn Silage 72 % $40 /T • Canola meal 70 % $270 /T • Dried Distiller Grains 93 % $165 /T

Feed Value (Cost per pound nutrient)

As Fed

Dry Matter

Crude Protein

TDN - Energy

Cost per ton

Cost per lb

Cost per lb

CP

Cost per LB

TDN

Canola Meal

As fed (90%DM)

38.7% (43%)

62.1% (69%)

$270 $.135 $.348 $0.217

Wheat Midds

As fed (90%DM)

17.1% (19.1%)

74.7% (83%)

$145 $.0725 $.423 $0.097

Corn Grain

As fed (85%DM)

8.5% (10%)

76.5% (90%)

$150 $.075 $.882 $0.098

DDGs As fed (92%DM)

26.6% (29%)

86% (93.5%)

$165

$.081

$.304

$0.094

Rations and Gain: 700# steers Increasing gain: better feed efficiency

Rations TDN DM basis

Gain, lb/d Feed/Gain %TDN NEg FeedCost

of Gain

Grass hay -10# Barley Malt Sprout -10#

1.99 10:1 63 .37 $.600

Grass hay - 6# Alfalfa hay - 4# Wheat Midds -10#

2.71 7.4:1 70 .45 $.439

Grass hay -8# Wheat Midds -12# Limestone - .15#

2.88 7:1 71 .46 $.420

Rations and Gain: 700# steers Increasing gain: better feed efficiency

Rations TDN DM basis

Gain, lb/d Feed/Gain %TDN NEg FeedCost

of Gain

Grass hay -6# Alfalfa hay -4# Corn Grain – 2# Wheat Midds – 8#

2.68 7.46:1 70 .45 $.436

Alfalfa hay -8# Corn Silage -31#

2.32 16.8:1 66 .42 $.439

Grass hay - 4# Alfalfa hay - 4# Wheat Midds -6# Corn Grain -6#

3.13 6.38:1 74 .50 $.399

Rations and Gain: 700# steers Increasing gain: better feed efficiency

Rations TDN DM basis

Gain, lb/d Feed/Gain %TDN NEg FeedCost

of Gain

Alfalfa hay -13# Corn Grain – 7#

2.51 8.0:1 69 .44 $.47

Alfalfa hay -7# Corn Grain -11.5# 38% protein Suppl -1.5#

3.35 6:1 77 .54 $.468

Alfalfa hay -5.5# Corn Grain -13# 38% protein Suppl -1.5#

3.61 5.5:1 79 .57 $.445

Rations and Gain: 700# steers Increasing gain: better feed efficiency

Rations TDN DM basis

Gain, lb/d Feed/Gain %TDN NEg Cost of

Gain Grass hay -15# DDGS – 5#

1.80 11.1:1 62 .35 $.561

Grass hay -10# Corn grain – 4# DDGS -6#

2.84 7:1 72 .47 $.422

Grass hay -7# Corn grain – 7# DDGS -6#

3.46 5.8:1 78 .54 $.375

Cost of Gain/ Breakeven/ Profit comparisons – using Calf Web

Calves - 575# fed to 750# Backgrounded at 4 average daily gains

1.8 ADG – 15# Grass hay, 5# DDGS 2.32 ADG – 8# Alfalfa hay, 31# Corn silage 2.88 ADG – 8# Grass hay,12# midds,limestone 3.46 ADG – 7# Grass hay, 7# corn, 6# DDGS * Rations need trace mineral,vitamin, ionophore, coccidiostat added

Grass,DDGS Alfalfa, Corn Gr.hay,midds hay,corn,DDGS In-weight, lb 570 570 570 570 In-cost, $/ lb 1.75 1.75 1.75 1.75 Out weight, lb 750 750 750 750 Out price, $/ lb 1.65 1.65 1.65 1.65 ADG 1.8 2.32 2.88 3.46 Ration cost/T $101 $52 $120 $130 Feed/Gain 11.1 16.8 7 5.8 Yardage/hd day $.35 $.35 $.35 $.35 Other expenses $29 $29 $29 $29 Price protection $20 $20 $20 $20 Pounds gained 180 180 180 180 Days on feed 100 78 63 52 Feed cost/gain $.560 $.436 $.420 $.377 Feed&yard/gain $.755 $.587 $.541 $.478 Total cost gain $1.145 $.963 $.907 $.837 Breakeven $1.61 $1.56 $1.55 $1.53 Profit / head $29.62 $63.35 $73.92 $86.94

Summary

Feed Cost of gain depends on: - Animal’s ability to gain - Cost of feed - Energy content of the ration Trend – Feed cost per gain decreases as rate of gain increases

However, in backgrounding cattle , avoid getting cattle too overconditioned (fat, fleshy). This can result in lower subsequent feedlot gain and possibly lower market prices.

Feed prices follow Corn price