CONTROL FEED COSTS TO MAXIMIZE PROFITS

by: Rick Machen
Associate Professor & Extension Livestock Specialist, The Texas A & M University System

Review the production expenses for commercial cow/calf operations and you'll find supplementation expense among the top five; feed costs often occupy the #1 position on the out-of-pocket (variable cost) expense list. Large expense categories are always examined during tough economic times like these. Following is a prioritized list of suggestions for getting a grasp on feed costs. The first three warrant consideration by all producers, regardless of the size of their operations. The last four suggestions may not be applicable to all producers.

1. An appropriate stocking rate is essential if efficiency and economy are expected of the supplementation program.

The purpose of supplementing grazing cattle is to correct a nutrient deficiency of the diet. The quantity and quality of available forage have as much or more to do with the success or failure of a feeding program as the characteristics of the supplement.

2. Nutrient requirements of the cow must be matched with productivity of the environment.

Genotype x environment interaction is a critical management consideration with significant impact on the success of a supplementation program. Results of a Nebraska study indicated that with abundant feed and/or a stress-free environment, cows that were larger at maturity and were heavier milker were more efficient than moderate size cows. However, when feed supply was restricted and/or animals were otherwise stressed, moderate-size and moderate milking cows were more efficient producers. Cows with smaller nutrient demands have a greater chance of achieving their biological production potential in any given environment.

3. For the commercial cow/calf producer, the production period with the greatest nutrient demand (calving, lactation) should coincide with the period of greatest expected nutrient availability.

Normally, forage maturity and quality are inversely related, while maturity and quantity are directly related. Warm-season native range forages are of highest quality during the spring and early summer; one of the reasons a large portion of the cows in the Southwest calve during that time of year. Management decisions that ignore this nutrient supply demand relationship may result in less efficient supplementation programs. Production and/or marketing objectives for summer, fall or early winter calving programs may compensate for this loss of efficiency.

4. Cows should be sorted by physiological condition to improve supplementation efficiency and reduce costs.

During the first 60-80 days post calving a cow's nutrient demand is the greatest it will be during the production year. During this period, cows are trying to recover from calving, reach and maintain peak lactation cycle and rebreed. They deserve more attention at this time. Heifers with their first calf at demand special consideration if high conception rates for second calves are a priority. Body condition adjustments are most efficiently made during the second and third trimesters of pregnancy.

Under today's production parameters (narrow profit margins), open cows are a liability. Therefore, if possible, sort cows by age and expected calving date. Implementing a 90-110 day breeding season greatly facilitates this sorting process.

5. Deciding when to begin and end the supplementation program is critical.

A frequently asked question is “When should I start feeding?" The theoretical answer is as soon as the cows begin to experience a nutrient deficiency. Maintaining body weight is tough enough -- attempting to replace lost weight/condition and subsequently improve condition is economically inefficient. In reality, if cows are in "better than necessary" condition, some weight loss is tolerable and will result in feed savings. Tardy initiation and/or an unwarranted continuation of supplementation increase costs.

Relatively new computer modeling technology developed at Texas A&M University helps cattlemen estimate the nutritional status of grazing cattle. The program, called NUTBAL (Nutritional Balance Analyzer), uses fecal analysis to predict nutrient intake and compares this intake with calculated requirements to yield an estimate of the nutrient balance of the grazing animal.

6. Nutrient content of the supplement has a significant impact on the response observed.

Protein is often the most limiting nutrient for cattle grazing dormant forages or consuming poor quality hay. When compared to energy, protein is often the more expensive component of a supplement. Feed purchasing decisions should be based on the cost per pound of nutrient (usually protein), not simply on the cost per hundredweight or ton. Comparing two feeds of differing nutrient content strictly on the basis of price per unit weight is like comparing apples and oranges.

High protein supplements (more than 30 percent crude protein), fed at 0.1 to 0.3 percent of body weight per day stimulate forage intake. Research indicates the intake improvement can be as large as 60 percent. Increases in forage intake provide a large boost in energy and demonstrate why correcting a protein deficiency is usually the first priority in supplementation programs.

Generally, as percent crude protein ( CP) in a feed increases, the cost per unit of protein decreases. Comparing extremes on a cost per unit of protein basis, the difference between whole shelled corn (10 percent CP, $180 per ton) and cottonseed meal ( 44 percent CP, $300 per ton) can be as large as 260 percent (the cost per pound of CP in corn can be as much as 2.6 times higher than for cottonseed meal) .

In contrast, starchy, high energy supplements (e.g. cereal grains) tend to reduce forage intake and digestibility, a phenomenon referred to as negative associative effect. The net effect can be a reduction in performance. Energy supplements (10 to 18 percent crude protein), when fed at 0.7 to 1.0 percent of body weight daily, can be used to extend a limited forage supply without reducing performance. In between the high protein and energy supplements are the "general purpose" feeds, of which the 20 percent crude protein formulation is perhaps the most popular. Feeds of this type are an excellent choice when attempting to maintain forage intake and improve performance (body condition).

Recommended feeding rates are 0.3 to 0.5 percent of body weight per day.

7. Good decisions about purchasing and providing supplements also can reduce costs.

Forward contracting -Traditionally, feed prices are the lowest in mid to late summer and highest in the winter. Contracting feed in late summer for use the following winter can result in substantial savings. A review of feed prices during a typical feeding season would indicate increases of $40 to $50 per ton from late summer to the following spring. Forward contracts usually are available only for large volumes of feed and may not be appropriate for smaller operations. In addition, cash flow restrictions may prohibit some cattlemen from forward contracting.

Bulk feed -Handling feed in bulk reduces labor and may reduce costs $5 to $20 per ton over sacked prices. Again, bulk handling may not be applicable to smaller operations and does require some up-front investment in storage and feeding equipment.

Reduce feeding frequency -Research from several universities indicate little or no difference in performance of cows supplemented two or three times per week compared to those fed daily. Recent studies indicate that feeding even once a week may have the same results as feeding more frequently. Feeding less frequently saves labor, fuel and equipment wear.

High protein supplements (more than 30 percent CP) perform well when offered infrequently. However, high- energy supplements (10 to 18 percent CP) perform best when offered frequently and in small amounts. Infrequent feeding of large amounts of grain or other high energy feeds can cause serious illness.

Reproductive performance (percent calf crop weaned) is the key to survival during tough times. The profit margin (if any) per cow is small; therefore, it takes the production of several cows to pay the expenses associated with non productive cows. A cow can generate income in one of two ways: wean a marketable calf or go to market as a cull cow.

As previously mentioned, large expense categories often draw the most attention when it comes time to tighten the belt. However, those expense that directly influence productivity must be evaluated with care. Cost effective supplementation, when combined with a sound herd health program, is a requirement for achieving performance goals and surviving economically.

Calculating $/lb of crude protein:

1. % crude protein x volume of feed ( cwt., ton) = lb. crude protein

2. Feed cost $/volume of feed/lb. crude protein = $/lb. crude protein

Ex: .What is the $/lb CP of a 20% CP feed costing $200/ton.

1. 20% x 20001b. = 4001bs. crude protein

2. $200/400 = $0.50 lb. crude protein







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