5 – Feeding Industry Flashcards
How does the cow know that it is her calf in first 24hrs
- Location: where she had it
- Smell
- Eventually: will learn what it sounds and looks like
What might a 24hr calf have if it is breathing rapidly?
- Fractured ribs
- Aspiration pneumonia
- Metabolic acidosis
What is part of feedlot management (3)?
- Fiscal strategy
- Livestock inventory control
- Technical aspects of feeding cattle
Fiscal strategy
- 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
Describe the factors affecting the price of weaned calves coming into the feedlot
- demand!
- Gender
- Weight
- Quality
- Size of group
Gender: weaned calf price
- Male calves cost more
o Due to feed efficiency advantage
Weight: weaned calf price
- Lighter calves tend to cost more $/cwt
- *but heavier calves still worth more $$
Quality: weaned calf price
- Castration status: steers>bulls
- Horns, frozen ears, BCS, previous vaccinations
- Breed type?
Size of group: weaned calf price
- 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
What is the cost of buying a weaned calf? (current prices)
- 550lb/100 x $471.54 = $2600
- If 30,000 head feedlot=$778M in cattle inventory
- **need to have DEEP POCKETS
What are the costs associated with feed the calf until it reaches slaughter weight?
- Cost of feeder cattle
- COST OF GAIN
o Feed costs
o Health costs
o Yardage
o Freight
o Bedding
o Interest to bank
Yardage
- 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
What is cost of gain?
- How much to put 1lb of weight=$1.30/lb
- Pretty much everything but the initial cost of the feeder cattle
What is the target slaughter weight?
- 1400-1550lb (live) for steers
What are 2 options in feeding industry?
- Investing or owning a group of cattle
- Feeding a group of cattle for other investors/customers
Who might the ‘investors’ be?
- 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
Custom feeding positive
- Provides ‘guaranteed’ cash flow for feedlot owner
- Lowers risk compared to ownership
What does the customer do/is responsible for in custom feeding?
- Owns the cattle
- Pays interest on loans
- Takes risk on market
- Risk on morbidity, mortality, performance
- *when marketed to packer=customer gets the cheque
What would the feedlot charges to the customer include?
- ‘yardage’: cost of running the hotel
- Bedding
- Feed
- Processing and drugs
What do order buyers do?
- 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
what are the types of cattle available for purchase?
- Recently weaned calves
- Preconditioned
- Backgrounded
- Dairy
- Stocker calves or yearlings
- Grass yearlings
- Fed yearlings
- Short keeps
- Cull cows or heifers
Sale of finished cattle to packer
- 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 $
What is ‘on the rail’? What is an advantage?
- Price paid on carcass basis
- Advantage: can do GRIDS=bonuses or deductions based on carcass quality
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?
- Increasing the custom feeding proportion of cattle
- Forward contracting to packer
- Forward contracting grain prices
- Hedging: use commodity futures on Chicago Mercantile Exchange
What is hedging?
- 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
Technical operations of feedlot
- office
- feed mill
- feed trucks
- farming operations
- shop
- processing cattle
- pen checking
- hospital operations
Employees
- 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
What is the primary energy source for a feedlot ration in Western Canada
- Barley
- Wheat occasionally used
What is the primary energy source for a feedlot ration in the rest of North America?
- 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.
Starting cattle on feed
- 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
Step up rations
- 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
What are some advantages of step-up rations?
- 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
How do you manage step-up rations?
- 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)
What is a ‘slick bunk’?
- No feed left over at all
