ST. PAUL, MINN. (7/25/2011) —Based on current feed prices and December cattle markets, cattle placed in feedlots right now may not lose money, but may not turn a large profit either.
High corn prices are making it hard to turn a profit feeding cattle. Modified distillers' grains are currently a much better value than corn. Other regionally or seasonally available feedstuffs can also be utilized.
Here are the calculations: Use current feed prices of $6.25/bushel for corn and $90/ton for modified distillers' grains. Then a contemporary feedlot ration containing 60 percent corn, 25 percent modified distillers' grains, 10 percent corn stalks, and 5 percent supplement (Dry Matter, or DM, basis) would cost approximately $235/ton DM.
Let's say you place 900-pound yearlings in the feedlot in July at $1.30/pound. Assume a 3.5-pound average daily gain and 23-pound dry matter intake with a $235/ton ration cost. The feed and total costs of gain would be $0.77 and $0.96/pound, respectively, and the breakeven fed cattle price would be about $1.18/pound. That translates to slim profits at best.
However, other feedstuff options can reduce corn in cattle rations, and reduce the impact that high corn prices have on cattle feeding returns. When comparing these feedstuffs to corn, it is important to know the energy content (in mega calories of net energy for gain/pound, or Mcal NEg/pound) of each feedstuff to put them on a price/unit of energy basis. This means that if modified distillers' grains can be purchased and delivered to the feedlot for less than $119/ton, they are a better value than corn. Current modified distillers' grains prices range from $85-100/ton.
Wet beet pulp, for another example, is generally available in sugar-beet producing areas from October to April. Based on current prices, a feedlot operator could pay up to $37.50/ton for wet beet pulp in place of corn. Wet beet pulp can often be acquired for free or less than $10/ton at sugar beet processing plants.
The bottom line is that there are many options to lower cattle feed costs. It is very rare to completely replace corn with an alternative feedstuff, but doing some calculations will help establish a baseline for partial replacement of corn to lower ration costs and increase returns to cattle feeding.
For more information, including a table on calculating values of alternatives to corn, visit the University of Minnesota Extension Beef Team website at www.extension.umn.edu/beef.
Any use of this article must include the byline or following credit line: Grant Crawford is a beef educator with University of Minnesota Extension.
Media Contact: Catherine Dehdashti, U of M Extension, (612) 625-0237, firstname.lastname@example.org