High feed costs warrant better management in feedlots
By Jennifer Carrico
When feed costs are high, cattle producers must determine what their options are for better management of input costs, according to Iowa Beef Center Director Dan Loy.
"Cattle producers always want to get the best feed for the price, but feed cost management is even important when corn costs are above $5," said Loy during a session at the Iowa Cattlemen's Convention in Altoona, recently.
He said producers looked at their nutrition program differently when corn was cheaper and now there is also increased competition for the use of corn.
"The average price of corn has increased $2 to $3 over the past 20 years and even more than that since 2007," said Loy. "There are also more corn co-products available now, at a lower cost than corn, which can help alleviate some of the high corn prices."
While the increase in corn prices has also made an increase in the price of distillers products, there is a variation in the relationship of the two. Loy said feeding programs will need to adapt to the cost environment.
"Cattle feeding has been built as a way to feed corn as a low-cost energy source. There are a few exceptions to the corn rule, however, and even more showing up because of the high corn prices," he said.
Cattle producers in Idaho have used potatoes as a low-cost energy sources and producers in Alberta, Canada, have used barley as a low-cost energy source, as both of those feedstuffs are readily available in those areas.
In Iowa, cheap corn and the competitive nature of cattle feeding has led to rations having the highest level of grain that is biologically tolerable and manageable. In the past, this system has worked best with groups of spring-born calves being put in the feedlot in the fall. However, corn is no longer the low-cost energy source and producers must now determine all the options they have available and compare prices to feed the most economical feed.
Loy said finding the most economical feed can change based on season, demand, availability and nutritional value.
"Being efficient when feed costs are high is very important," he added. "It's important to not only know what the feed stuffs cost, but also account for storage and feeding losses. You need to know your differences in shrinkage and then decide if you should continue to feed that particular feed stuff."
Loy said when feed costs are high, cattle producers should also consider adding technologies to their management system to improve efficiency. These technologies ant techniques would include feed additives, implants, beta agonists, health management and timely marketing.
Along with these technologies and management techniques, he said there can be trade-offs that must be recognized, such as the difference in quality grade. These trade-offs should be looked at when making marketing decisions.
"When there is a low choice/select spread, the difference in cost of gain isn't enough to not implant cattle in the feedlot, but with a high choice/select spread, there can be a larger decrease in carcass value with the use of implants," he said. "Each producer needs to know how they plan to market their animals and what the price differences are in order to decide if adding implants to the management scheme is economical. With high feed costs, an implant could make a difference."
Loy suggested producers search for the best feed available locally to keep feed costs down. Sometimes a neighbor is feeding a unique by-product or different feed to keep costs down.
"Sometimes keeping feed costs down means thinking outside the box when it comes to feed sources," he said. "I've heard of people feeding fruit peelings, crushed cookies or candy to their cattle as a high-energy source. Consider doing a feed analysis first, but there's no reason some of those things wouldn't work."
Looking for seasonal bargains, such as wet corn co-products, can be an option as long as storage length is taken into account.
When taking advantage of local commodity prices, Loy suggested to be sure to talk to a nutritionist about how much to feed if it's a different feedstuff than is normally fed in your feedlot.
"It's important to meet the nutrient requirements for the feedlot animals and also meet the carcass value at the same time. There are so many parts to the equation that need to be analyzed when making serious feeding decisions," he said.
Changes in management can mean taking advantage of opportunities for lower feed costs. He also suggested backgrounding cattle to a heavier weight before putting them in the feedlot.
Weather conditions in other parts of the country have had an affect on feed costs also. The drought in the southern states has increased the value of hay in the northern states.
"When feed costs are high, it is very important to have a good nutritionist to help make decisions in ration changes," said Loy. "The best scenario would be to find a good contract price for feed ingredients, but if that's not possible then producers have to know what they can afford to feed to still see a profit in the end."
For more information about calculating feed costs and a feed energy index, visit www.iowabeefcenter.org.
Jennifer Carrico can be reached by phone at 515-833-2120, or by email at firstname.lastname@example.org.