Cheap grain prices are the silver lining on the cloud of a depressed agricultural economy. And, the opportunity exists not only for feedyards but stocker operators and cow/calf operators as well.

"Cheap grain presents an opportunity for producers who are willing to manage their cattle differently," says David Lalman, beef cattle specialist with Oklahoma State University (OSU).

Last fall's chance to buy lightweight calves for $75/cwt., then hedge them for the same money on the April and May board disappeared quickly. But, the cost of feed still offers plenty of opportunity.

Cheap Gains From Grains In late November, Lalman calculated the value of weight gain at $65/cwt. "Assuming you can buy healthy calves with the genetics and condition to grow, we can pencil in a 28- to 35-cent-per-pound cost of gain for feed, using corn, milo or different feed by-products like corn gluten feed, wheat midds and soybean hulls," he says.

Although taking full advantage of the equation in a drylot situation requires more management and equipment for feed storage and delivery, Lalman says "the most efficient management technique is program (limit) feeding."

Depending on the gain target, he says producers can limit-feed a grain ration at 1.7-2% of an animal's body weight each day and achieve cattle gains of 1.75-2.25 lb./day. Rations are typically 80-85% corn, with the remainder a commercial supplement, either top-dressed or blended with the corn. "The nice thing about feeding whole shelled corn in these rations to calves is that no forage is required," Lalman adds.

This same opportunity exists for stockers to get more mileage out of dry forage and wheat pasture cut short by the Southwest's extreme heat and drought last summer.

"When I ordered feed for winter cattle, I had a range cube made that is mostly grain, so I can extend the grass I have for winterwith the energy in the cube," says Jim Link of Link Cattle Co. at Crowley, TX. Besides running stockers for 35 years, Link is also director of the ranch management program at Texas Christian University.

Link estimates his dry forage supply heading into winter was half of normal, but using the grain cubes means he may only have to run 25% fewer stockers. "The cubes will raise the cost of gain a little over what it was, but I've got to fill my grass since I'm committed to it," says Link, echoing the fixed-cost challenge faced by others in the same situation.

"They have to keep feed costs down to where they can do it for the same cost of standing forage," says Lalman. While feed costs per pound of gain increase with supplementation, he explains increased stocking rate and extra gains per acre make the total cost of gain similar or less than normal.

For perspective, Lalman says a blend of high protein soybean meal and corn fed at 1% of body weight per day, in addition to dry pasture or hay, should offer gains of 1.25-1.50 lbs./day (Table 1). Feeding the same mix at 1.5% of body weight should coax gains of 1.75-2 lbs./day.

Economics require producers look beyond the reality that feeding cereal grains decreases the digestibility of forage, according to Lalman. "We can make these cattle gain 1.5 pounds per day by feeding 1 percent of their body weight. The key is to add enough protein to minimize the reduction in forage digestion." Some producers in southern Oklahoma are utilizing this strategy with rations that are 25% protein.

Likewise, supplements can help extend wheat pasture opportunity. That's especially important in Oklahoma - normally the nation's Mecca of green gold - where Lalman estimates there is only enough wheat pasture for half as many stocker cattle as normal.

One-Third More Stocking Rate In an OSU study conducted several years ago, researchers were able to increase stocking rates on wheat pasture by roughly a third by feeding wheat pasture cattle approximately 4-6 lbs. (0.75-1% of body weight) per day of a concentrate supplement. The supplement, comprised of wheat midds and soybean hulls, was tested against a grain-based one.

"Although results indicate no difference in performance, the high-fiber supplement was consumed more readily. Consequently, supplement type should be based on the lowest cost ingredients. And, a key component in these supplements is an ionophore such as Bovatec or Rumensin, which boosts gain another 0.2 lbs./day, while reducing the risk of bloat," Lalman says.

Besides the opportunity for cheap gains, Link says anyone who can warehouse cattle now should be in a good situation headed into 1999. "We can't keep liquidating females at the rate we have been without coming up with a supply shortage," he says.

Moreover, Link points out that the dog-eared rules of the cattle business still apply, whether or not producers agree with them. "There will be some people who didn't do a good job of risk management this year that will lose leases or ranches. Historically, when it's bad for someone, it's good for someone else."