Up management intensity, keep profit
Think back a few years. If someone had predicted that fed-cattle prices would pass $1 a pound, that the national cow herd would keep shrinking despite feeder prices being more than $1.25 a pound and that we’d still be facing beef shortages, you’d think they were “short a few bricks.”
• Today’s market situation was unbelievable just a few years ago.
• Managing intensity will help capture profit in today’s markets.
• Upgrade your management intensity in 17 areas.
Yet that scenario is playing out right now. Our cow herd is at a 40- to 50-year low. Imported beef is declining. And there’s no clear indication that producers are in the mood to expand in the near future.
So, even a lax manager can make money feeding cattle now, right? Nope!
Despite attractive fed prices, feed and feeder prices will put a lot of pressure on the bottom line for the foreseeable future. Certainly, there’s profit potential out there. But you may have to intensify your feedlot management to capture it.
Convert from lax to intense
Iowa State University Extension’s Iowa Beef Center provides a lot of commonsense advice. Check out the following list of selected aspects of feedlot management. Try to convert from “lax” to “intense” in as many of these areas as possible.
Optimal rations. Lax: Follow general recommendations. Intense: Separate ration for each pen with all available feedstuffs evaluated.
Feed analysis. Lax: Use average or “book” values. Intense: Test all feeds quarterly.
Alternative or byproduct feeds. Lax: Follow general recommendations. Intense: Evaluate all potential byproducts, including specific storage, transport costs and ration effects.
Weather adjustments to rations. Lax: No adjustments. Intense: Monitor cattle as weather changes and make adjustments as needed.
Water quality. Lax: No sampling. Intense: Evaluate periodically for minerals and bacteria.
Receiving program. Lax: No clear program. Intense: Develop a defined receiving and step-up program, with guidelines spelled out for ration changes by intake level, cattle type and target market date.
Ration mixing. Lax: Ration mixed, but never checked. Intense: Analyze bunk samples for consistency.
Bunk feed waste. Lax: Not observed. Intense: Measure waste and take steps to control it.
Feed additive factors. Lax: Not considered or monitored. Intense: Consider, evaluate and use at profitable timing and levels for meeting target weight.
Feed storage. Lax: Inventories not monitored. Intense: Monitor constantly and do weekly summaries.
Feed shrink. Lax: Ignored. Intense: Track and take steps to minimize.
Storage costs. Lax: Ignored. Intense: Consider fixed and variable costs.
Rodent control. Lax: Not considered. Intense: Control pests at all times.
Implants. Lax: Not used. Intense: Define an implant protocol that matches cattle type, proper administration and market considerations.
Records. Lax: No records kept on closeouts, performance, costs, feed inventories, health, nonfeed costs or benchmark comparisons. Intense: Keep complete
records and constantly evaluate them.
Cattle comfort. Lax: Little consideration for windbreaks, shelter, shade, sprinklers, bedding, mud, pen density. Intense: Observe constantly as weather and conditions change.
Marketing. Lax: No organized marketing plan; take to sale barn and accept what’s bid. Intense: Evaluate all interacting factors such as cost of gain, breakevens, grid marketing potential, endpoint sorting and bid procurement.
There are no real “secrets” to profitability in the feedlot enterprise. Those who make money every year are those who pay attention to the details and aren’t afraid to change management as conditions change.
Harpster is a Penn State animal scientist and a beef cow-calf producer.
BUNK BUCKS: High feed and feeder costs spell a lot of money at the feed bunk. Even so, intense management still can turn a profit.
This article published in the February, 2010 edition of AMERICAN AGRICULTURIST.
All rights reserved. Copyright Farm Progress Cos. 2010.