Managing cattle feeding operations during tough times

News
Jun 12, 2009
by WLJ
Managing cattle feeding operations during tough times

Once again, cattle feeders are in an extended period of economic challenges and need to take advantage of every opportunity to survive in these tough economic times, a University of Nebraska-Lincoln (UNL) beef cattle specialist said. “The problems cattle feeders face today are not much different from other years,” said Terry Mader, UNL beef cattle specialist at the Haskell Agricultural Laboratory near Concord. “However, today’s economic conditions magnify the problems faced, and fluctuating feed costs and volatile markets force a greater sense of urgency.”

To head off economic downturn at the feedlot, Mader offers feedlot management tips, including: managing feed resources, assessing alternative feedstuffs, using current technology including equipment and pharmaceuticals, improving cattle comfort to reduce environmental risk, capturing value in manure, and marketing.

Feed management, if done properly, minimizes waste both at the pen and in feed storage systems, Mader said. Establish a normal daily routine for reading the bunk and feeding cattle. Reduce feeding losses by keeping bunks clean, delivering feed the entire length of the bunk, and allowing adequate space for animals to access feed. All spaces need to be compatible with what the cattle want, Mader said. In addition, take a second look at storage systems to minimize waste, especially for ingredients that are processed outside and/or those that are stored on the ground. Good management can amount to as much as a 10 percent savings in total feed costs.

“Even when the amounts are small, they do add up,” he said. Alternative feedstuffs, such as distillers grains, in the past decade have given cattle feeders an alternative to corn. Although the price of ethanol co-products has increased, the enhanced ration value associated with including these components into a ration still make them viable feed ingredients.

Relative to the amount in a ration, distillers grains offer higher feed value at 10 to 20 percent of the ration, as opposed to 30 to 40 percent.

However, even at current prices, distillers grains are typically economical to feed at 30 to 40 percent of the ration when compared to corn. Other alternative feeds include seed corn refuse, grain screenings, soy hulls, wheat byproducts, and food byproducts.

Technology that improves efficiency—whether mechanical or pharmaceutical—has greater value when the feeder’s bottom line is complicated by higher feed costs. During difficult economic conditions when the producer can’t purchase new equipment, it’s essential to put time and effort into maintaining equipment, such as mixers and scales.

“If operating with subpar equipment, it’s difficult to maintain adequate levels of reduced yield lowers this year’s crop to 11.9 billion bushels, a number which efficiency,” Mader said. In addition, Mader stresses the importance of effectively using existing growthpromoting products; maintaining regular re-implant schedules are important.

When it comes to growth promotion and an implant program, programs should be tailored for each cattle feeding system to maximize return.

Cattle comfort is of extreme importance. The more predictable the environment is, the easier it is to maintain stable feed intake and keep cattle performing efficiently.

“Therefore, anything the cattle feeder can do to minimize the effects of variable climatic conditions is useful,” he said. Conditions that contribute to heat stress, brought about by over-finished or other cattle close to slaughter, need to be closely monitored on hot summer days. Taking the edge off the heat by wetting pen surfaces is a simple, economical method to cool cattle for getting them through difficult times, Mader says. The cattle themselves can be wetted in emergency conditions.

In the winter, good pen management revolves around keeping the pens clean, with old manure deposits removed prior to winter setting in. Good pen management in a bad winter can mean a cost-of-gain savings of 10 to 20 percent.

Capturing manure value can be a bonus for cattle feeding operations, as $15 to $30 per ton can be realized from manure in the form of nitrogen and phosphorus.

“At one time, cattle feeders thought of manure only as something they needed to haul away,” he said. “Today they look for alternatives for manure management and ways to capitalize on the product, keeping in mind the high levels of phosphorus associated with cattle being fed distillers products.”

Marketing alternatives typically focus on two primary routes: contracts and hedging strategies. To capture the best in those markets, Mader said feeders need to know their breakeven price and keep accurate and current records that not only record cost of gain, but also track information on the cattle.

Background information and origin of the cattle, pharmaceuticals they’ve been given, and breed specifics for each group of cattle are needed to obtain premiums at the marketplace and take advantage of valued added opportunities. There are about 50 premium-based, breed and non-breed specific, alliances.

“Be familiar with the premiums that fit the requirements for alliances and fit the type of cattle you are feeding,” Mader said. In addition, records are more essential during the bad times than the good, he said. “You need a good foundation to build a good case for borrowing money during down times,” he said. “Projected gains and close-outs are very important.”

A marketing and management plan are important aspects of those projections. Cattle rarely are capable of being hedged at the time of initial purchase. But knowing what potential costs of gain will be and what marketing alternatives are available puts the feeder in position to take advantage of profit opportunities when they arise. — WLJ

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