5 – Feeding Industry

Question 1

How does the cow know that it is her calf in first 24hrs

Answer 1

• Location: where she had it
• Smell
• Eventually: will learn what it sounds and looks like

Question 2

What might a 24hr calf have if it is breathing rapidly?

Answer 2

• Fractured ribs
• Aspiration pneumonia
• Metabolic acidosis

Question 3

What is part of feedlot management (3)?

Answer 3

1. Fiscal strategy
2. Livestock inventory control
3. Technical aspects of feeding cattle

Question 4

Fiscal strategy

Answer 4

• Building facility: landscaping=major expense
  o Most have compacted concrete like stuff now
  o Access to lang necessary for spreading manure
  o Most feedlots own land for silage production only
• Livestock financing: buying cattle
  o Need to have at least 25% down
• Operating capital
  o Feed, bedding, fuel
  o employee

Question 5

Describe the factors affecting the price of weaned calves coming into the feedlot

Answer 5

• demand!
• Gender
• Weight
• Quality
• Size of group

Question 6

Gender: weaned calf price

Answer 6

• Male calves cost more
  o Due to feed efficiency advantage

Question 7

Weight: weaned calf price

Answer 7

• Lighter calves tend to cost more $/cwt
• *but heavier calves still worth more $$

Question 8

Quality: weaned calf price

Answer 8

• Castration status: steers>bulls
• Horns, frozen ears, BCS, previous vaccinations
• Breed type?

Question 9

Size of group: weaned calf price

Answer 9

• If get a large uniform calves=sold together as a large group will be HIGHER price/cwt than smaller groups
• Small groups (2-10)=very COMMON=tend to sell for lower prices compared to larger groups at same quality
  o Small calf producer=not many in each ‘weight’ range

Question 10

What is the cost of buying a weaned calf? (current prices)

Answer 10

• 550lb/100 x $471.54 = $2600
• If 30,000 head feedlot=$778M in cattle inventory
• **need to have DEEP POCKETS

Question 11

What are the costs associated with feed the calf until it reaches slaughter weight?

Answer 11

• Cost of feeder cattle
• COST OF GAIN
  o Feed costs
  o Health costs
  o Yardage
  o Freight
  o Bedding
  o Interest to bank

Question 12

Yardage

Answer 12

• Daily non-feed costs not associated with ownership of cattle
• Fixed: taxes, insurance, depreciation on facilities
• Non-feed operating costs: fuel, utilities, office, repairs, labor
• *hotel charges for a feedlot to operate

Question 13

What is cost of gain?

Answer 13

• How much to put 1lb of weight=$1.30/lb
• Pretty much everything but the initial cost of the feeder cattle

Question 14

What is the target slaughter weight?

Answer 14

• 1400-1550lb (live) for steers

Question 15

What are 2 options in feeding industry?

Answer 15

1. Investing or owning a group of cattle
2. Feeding a group of cattle for other investors/customers

Question 16

Who might the ‘investors’ be?

Answer 16

• Cow-calf producer who wants to retain ownership of cattle
• Another feedlot owner or feeding operation
• An ‘investor’ looking to speculate in the cattle industry

Question 17

Custom feeding positive

Answer 17

• Provides ‘guaranteed’ cash flow for feedlot owner
• Lowers risk compared to ownership

Question 18

What does the customer do/is responsible for in custom feeding?

Answer 18

• Owns the cattle
• Pays interest on loans
• Takes risk on market
• Risk on morbidity, mortality, performance
• *when marketed to packer=customer gets the cheque

Question 19

What would the feedlot charges to the customer include?

Answer 19

• ‘yardage’: cost of running the hotel
• Bedding
• Feed
• Processing and drugs

Question 20

What do order buyers do?

Answer 20

• purchase specific types of cattle at a ‘specific’ price
  o type will depend on expertise of feedlot
  o performance and cost of gain must be predicted so purchase price can be projected

Question 21

what are the types of cattle available for purchase?

Answer 21

• Recently weaned calves
• Preconditioned
• Backgrounded
• Dairy
• Stocker calves or yearlings
• Grass yearlings
• Fed yearlings
• Short keeps
• Cull cows or heifers

Question 22

Sale of finished cattle to packer

Answer 22

• liveweight basis
  o feedlot ‘sort’ cattle into attractive packages
  o yield and grade will be predicted by feedlot
  o may accept bids from several packers before selling cattle
• ‘on the rail’ (GRID PRICING)
• *need to consider price, freight, discounts, value of Canadian $

Question 23

What is ‘on the rail’? What is an advantage?

Answer 23

• Price paid on carcass basis
• Advantage: can do GRIDS=bonuses or deductions based on carcass quality

Question 24

Feedlot needs to continue to operate even when profit can’t be project or very good. What are some strategies available to mitigate risk of losses?

Answer 24

1. Increasing the custom feeding proportion of cattle
2. Forward contracting to packer
3. Forward contracting grain prices
4. Hedging: use commodity futures on Chicago Mercantile Exchange

Question 25

What is hedging?

Answer 25

• use commodity futures on Chicago Mercantile Exchange
• place a bet that market price will drop and if it does=you get money, but lose money on your cattle

Question 26

Technical operations of feedlot

Answer 26

• office
• feed mill
• feed trucks
• farming operations
• shop
• processing cattle
• pen checking
• hospital operations

Question 27

Employees

Answer 27

• compete with other industries (ex. potash and oil)
• pension plans, incentive bonuses, etc
• specialized skills needed
  o reading feed bunks
  o detecting sick cattle
  o sorting fat cattle

Question 28

What is the primary energy source for a feedlot ration in Western Canada

Answer 28

• Barley
• Wheat occasionally used

Question 29

What is the primary energy source for a feedlot ration in the rest of North America?

Answer 29

• Corn
• Sometimes used in western Canadian feedlots
• *some use byproduct feeds
  o Brewers/distillers grains=common
  o Cull potatoes
  o Potato chips/chocolate bars, etc.

Question 30

Starting cattle on feed

Answer 30

• Encourage intake ASAP after arrival
• Intakes may be <1.5% body weight
• Once intake reach 2.5-2.7% can take off starter rations
• Good quality long stem hay for 3-5 days
• Introduce starter ration by day 2 (top dress)
• Increased mineral levels

Question 31

Step up rations

Answer 31

• Series of rations (4-5) formulated to specific nutrient requirements
• Consistent increase in energy content
• Each step up=approximate substitution of 10% grain for 10% silage

Question 32

What are some advantages of step-up rations?

Answer 32

• Natural progression of energy levels
• Allows adaptation of rumen organisms
• 3-5 days minimum
• Progress to 85% concentrate finishing ration
• Can predict performance based on energy/protein level
• Can accommodate least cost formulation
• Simple enough for day-to-day application

Question 33

How do you manage step-up rations?

Answer 33

• Fed ‘ad-libitum’
• Get cattle on full feed, keep them there and avoid rumen acidosis
• Individual at feedlot designated as ‘bunk-reader’
  o Evaluates amount of feed consumed and gives instructions for daily feeding
  o Looks at each bunk early in morning
  o Makes decision regarding what should be fed (amount and which ration)

Question 34

What is a ‘slick bunk’?

Answer 34

• No feed left over at all