Feed Is the Big Check: Where Cost of Gain Really Comes From

If you feed cattle, you already know where the money goes. Feed is the biggest bill in the yard, and it is the one you have the most say over. I will not quote you a percentage, because the share changes with grain prices and cattle prices and every man's books are different. What does not change is the rule: you make or lose money on feed, so manage it like it matters.

Know your cost of gain

Cost of gain is what it costs in feed to put one pound on an animal. Take the ration cost per head per day and divide by pounds gained. In the examples NDSU Extension ran on feeding profits, feed cost of gain landed somewhere between about 62 and 81 cents a pound. Your number will differ. What matters is that you know it, by pen, and compare it to what the cattle will bring.

Fast is not always cheap

This one surprises people. In the NDSU numbers, the ration that put on 3.6 pounds a day cost more per pound of gain than the one that put on 2.8, because it leaned harder on corn grain at a time when corn was expensive next to silage. Their rule of thumb is that a ton of corn silage is worth about 8 to 9 times what a bushel of corn is worth. If your silage costs less than that, it might be the cheaper way to put weight on. If it costs more, grain wins. Check it each season.

Prices will move on you

Do not build next year's budget on this year's feed bill. NDSU reported that the USDA index of livestock and poultry feed prices rose 26.6 percent from September 2020 to September 2022. The USDA's Economic Research Service put beef cattle feed prices up 16 percent from May 2021 to May 2022 and pointed to drought and fertilizer costs, in its chart of note. Those are different measures, so do not add them together. Both say the same thing: prices swing, so keep a cushion.

Where the money leaks

• Waste. Spoiled silage, wet bunks, wind-blown feed. Cover it, pack it, clean it.
• Overfeeding days. Another week on feed costs real money, and fat cattle can get docked at the scale.
• Guessing on ingredients. A cheap ton of feed with low energy is not cheap. Price by the pound of energy and protein.
• Wrong cattle for the ration. Match the calf to the feed, and the feed to the market.
• Letting the loan do the thinking. If you do not know your break-even, you cannot tell a good pen from a bad one.

Buy right

Buying feed is a job. Compare quotes. Think about what you can store and what you must buy by the load. A contract can lock in a price, but it ties up money and it hurts if the market drops. Pick the risk you can live with.

Get the cattle right first

No ration fixes cattle that do not gain. Angus-based feeders chosen on data, such as those with AngusLink scorecards, can help you pick groups likely to feed well, though no tag guarantees anything. Our piece on cutting cost per cow covers the same ideas on the cow side, where feed is also the largest cost. The Angus Journal has described feed as often 40 to 70 percent of annual cow costs in cow-calf herds. Treat that as a range.

A routine that works

1. Test the feed and get the nutrients on paper.
2. Price each ingredient per pound of energy and protein once a month.
3. Weigh and track gain by pen.
4. Figure cost of gain and compare to the market.
5. Change one thing at a time, then check again.

A quick way to compare two rations

Say you are picking between a corn-heavy ration and a silage-heavy one. Price each per head per day. Estimate gain on each. Divide cost by gain and you have a cost of gain for both. Then add what the extra days on feed cost you in yardage, interest and risk, because a slower ration is not free just because the feed is cheap. If the numbers land close, think about labor and storage, which never show up on the ration sheet. It takes an evening with a calculator, and it beats finding out at the scale that you picked wrong.

Do it again every time the corn market moves enough to notice. Last season's winner can be this season's loser.

One more thing

Talk to a nutritionist before big changes, because ration mistakes cost more than the consultant. The beef program at the University of Nebraska has budgets and calculators worth bookmarking, and farm.fm's page on financial planning for Angus producers covers the money side. agriculture.directory can help you find local extension help. Prices and programs change, so check current numbers.