... Maybe Sometimes, But Not This Year
From time to time, I am asked a question that is both relevant and eye opening. I like to incorporate some of these questions into an article if I feel it is timely and would be of interest to our readers. I had such a question a few weeks back I would like to address at this time. I was at a recent cattle production sale and I was talking with several producers about the market outlook for cattle as well as recent cattle prices at board sales. One of the producers, attending the sale just to see cattle prices, made the following statement, "With feed so high, I can’t afford to feed my calves." When the statement was made, a few other producers seemed to agree with it, leading me to the point of this month’s article. Is feed too expensive to feed?
The normal answer you would get from someone who is in the feed business is "no, it’s never too expensive to feed." While that may not always be true, this year is very much a year it is not too expensive to feed calves.
The whole key to determining if it’s too expensive to feed calves is based on the selling price of the calf itself. While some years the price of feed may be low, but if the price of calves is low as well, then it may not pay to feed the calves and to just let your momma cow put the weight on the calves. Other years, the price spread between a lighter-weight calf and a heavier-weight calf may be so large that again it’s not as feasible to feed a calf to add extra pounds. There are years like this year where feed is moderately priced, calves are at record levels and the price spread between lighter calves and heavier calves is less than normal, making this the perfect year to feed your calves.
Let’s look at the cost of feed and the cost of calves to determine how much additional money a producer can make by the added weight on calves this fall. If we look at the current Alabama cattle market on number one quality steer calves, 600-weight steers are bringing an average of $1.55 per pound. Once we see what the value of the calf is, then we just need to determine what the cost of feed is and what it will cost to put a pound of gain on the calf.
The biggest consideration is selecting the feed that will put the lowest cost of gain on your calves. To determine this, you cannot look at the ton price of the feed but you will need to look at the cost per pound of gain of the feed. I am proud to say, at Alabama Farmers Cooperative, we have researched and collected data on thousands of calves over the past several years, and we are confident we know the conversion rates of the feeds we offer to producers.
The conversion rate is the amount of feed it will take to put a pound of gain on a calf. Knowing the conversion rates of the feeds are very important because this is what will give you the actual cost to put a pound of gain on a calf. If you are using a feed from another dealer, I would suggest you question that dealer about conversion rates and cost per pound of gain. If the dealer cannot answer these questions, I would suggest you consider another feed dealer or talk to a nutritionist, who can help you figure the conversion rates based upon the nutrient value of the feed.
I would like to give you the information on three different products we offer through your local Quality Co-op. The first is CPC Grower 13, the second is 13% pellets with Bovatec and the third is a soyhull/corn gluten blend. All three of the feeds are palatable and will add weight to your calves. The question is how efficiently do they add the gain and at what cost can a pound be put on my steer calves. We have data over several years that makes us confident the CPC Grower 13 will add a pound of gain to your calf for every 6 pounds of feed the calf consumes, 13% pellets will add a pound of gain for every 7.5 pounds of feed consumed and a soyhull/gluten blend will add a pound of gain for every 9.5 pounds of feed consumed.
With these numbers, let’s now look to see what you can give for each of these three feeds and still make money by feeding your calves. Again, a 600-pound number one steer is worth $1.55 a pound, so as long as we are putting a pound of gain on for a cost of less than $1.55 a pound then we are making money by feeding the calves. If you look at the CPC Grower 13% feed that converts at a rate of 6:1, you could pay up to $516 per ton for the feed to break even on adding weight to your calves; the 13% pellets, you can pay up to $413 per ton; and the soyhulls/gluten blend, you can pay up to $326 per ton. I assure you, in today’s market, all three of these feeds will cost less and in the case of the CPC Grower 13% Feed, much less than the break-even cost on the feed.
I hope you can see from this example that you can make a lot of additional profits this year by feeding your calves. I also hope you can see that while all three feeds will make you money, the two complete feeds will help you realize much more profit over the commodity-blended feed. I would encourage you to look at the opportunity this fall with record calf prices to realize even greater profits for your operation.
In addition, I would encourage you to consider products for your brood cow herd to help improve forage digestibility. With the rainfall we have experienced, most pastures have an abundance of standing forage that cows can consume and digest. There are products available to help them do this in a very efficient and profitable manner.