High calf prices and relatively low feed prices make 2014 a year to seriously consider adding pounds and profit.
With today’s stellar feeder-calf prices, is this a good year to “take the money and run” at weaning time, or can you increase your profit by adding weight to your calves before sale day? Let’s look at an example in which I have 526-lb. steers at weaning.
The typical shrink on unweaned calves is 5%, so you would garner a check for 500-lb. steers at the feeder auction. Using prices in Missouri at the time of this writing (June 27), a 500-lb. steer was worth $264.79/cwt., or a total animal value of $1,323.80/head.
If you feed that steer for 56 days to gain 2.66 lbs./day, you would have a 675-lb. steer (a 658-lb. sale weight with 2.5% shrink) with a value of $1,544.13. The question is, can you add 158 lbs. on a calf for less than the $220.33 price difference?
Shown below is the ration I balanced for the 56-day feeding period: The dry gluten was valued at the average price reported at by University of Missouri Extension, which was $177.50/ton in this example, while corn was priced at $4.22/bu. ($150.71/ton), and hay at $150/ton. By the way, every beef producer should bookmark this website to check feed prices. Due to supply, demand and geographic location, a feedstuff can cost double for the same product elsewhere. To assist our clients in finding better “deals” on feedstuffs, many of them use brokers, who often can save buyers thousands of dollars on product.
The feed cost of gain was only $56/cwt., while total feed cost was $84/calf. If we add interest cost (7%, or $14.57) and death loss (0.05%, or $6.83), we have a net return to labor and management of backgrounding the calves of $114.93. Part of this figure is the difference in shrink of an unweaned calf (5%, or 26 lbs.) vs. 2.5%, or 17 lbs. for a calf already on feed. Those 9 lbs. are worth nearly $21!
As I examined various feedstuffs for this exercise, it was remarkable how different 2014 is compared to 2013. Corn is actually one of the cheapest sources of energy this year. Who foresaw that a year ago? This is why it is so important to look at feedstuffs on a nutrient basis. I have updated my nutrient calculator, so feel free to download the most recent copy. Go to www.mwbeefcattle.com, click on “Total Beef Herd Health,” and then “spreadsheets” to find the nutrient calculator.
Current prices show corn at $197.01/ton on a dry matter (DM) of total digestible nutrients (TDN) basis. In comparison, soybean hulls are $256.89/ton on a DM of TDN basis. This is a great year to have a beef nutritionist, Extension specialist or veterinarian formulate a cost-effective ration for your calves. What you used last year will not be the best option this year.
Trials show implanted calves achieve an additional gain of about 0.2 lb./day vs. non-implanted calves. Over a 56-day period, that’s another 11 lbs., or about $25, for a $1 investment. High calf prices and relatively low feed prices make 2014 a year to seriously consider adding pounds and profit. You can potentially gain up to $188/calf in added value using these tools, while also improving your calves’ chances for a healthy, profitable feedlot experience.
W. Mark Hilton, DVM, is a clinical professor of beef production medicine at Purdue University in West Lafayette, IN. His opinions are not necessarily those of beefmagazine.com or the Penton Farm Progress Group.
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