Profit in the feedlot.

What is most important factor in profitability in feedlot cattle? Is it feed effiency? The conversion ratio? Is ipossible to get cattle down in the 4 to 1 ratio? Is it average daily gain? Is it better to have cattle gain 4.4 pounds aday with a 6 to feed effiency ratio or a 5.3 conversion with say 3.7 daily gain. What about carcass premiums. Are choice cattle even rewarded over select now adays? Are feedlot rations changing? Have they changed over the last 30 years? Didn't the corn belt used to be where the cattle were fed. Then they moved cattle more out to say Kansas and Texas because of climate and water situations. Isn't it now cheaper to haul corn than cattle down the road. The weaning weight generally is used for cow people whereas the yearling weight may be used more in a feedlot concern. Is the us premium beef deal paying off not as far as premiums to feeders are concerned. With this drought and the high price of feed isn't the industry really at a monumental point? What about the locker beef deal. Is there potential for a 50 head cow herd to put in some freezers and then market beef year round? What are liability issues? Is tenderness scores more important than marbling? What about hanging carcass length? Branded beef. etc.

AJ... the guy that helps me with AI and stuff is a cowboy in a feedyard... last year we took the "low end" to the yard in dec or  jan...These were calves that didn't cut it as show calves or replacement prospects... the calf in my avatar was one of them...he sold them on the grid and we got about 60 dollars per head over market for them.. my steers paid 950 to me in may and I think they were probably 600 or 650 in january when we sent them... my impression was that they fed and converted better than you'd anticipate... some finished at a smaller weight... they graded very well as a group... a few things I learned

they can sure finish cattle cheaper than I can when I am hand feeding them at home, turns out these calves were usually in a separate pen just because it was easier for the feedyard at the time

with him working in the yard he was very aware of the best time to sell

our calves weren't shipped more than 10 miles in their life until they went to slaughter... they were healthy calves.. any crips or chronics were put down or taken to the sale barn as appropriate

Sounds good jbzdad. I honestly don't know. The average daily gain was really pushed hard but I got to wondering if feed effiency is as least as important.If you are paying for feed seems like pounds consumed per pound gained might actually be just as important. Maybe the the good average daily gain cattle are more effiecient. That was the case in the 70's but what about now?

OK.. just for fun pencil this... I just weaned some of this years calves and started them on grain and hay

did something similar last year and finally fed out 2 little heifers for locker beef... prolly avg 10 pounds apiece per day for entire year... they were on grain awhile then hay and grass then finished out.. my cost feed is about 14 cents per pound... heifers were dinks.. dressed out 660 and I  am gonna charge 1.85  and they pay locker plant... are you sure you want to try to sell home grown beef ?

they also ate some hay and grass

wonder if I could sold those 500 pound heifers a year ago for 608 dollars?

aj said:

. Is the us premium beef deal paying off not as far as premiums to feeders are concerned.

Click to expand...

For quality cattle it has and is still paying off!  We are close to 600 miles away from us premium and we haul cattle out there, and there are several guys around us that do the same, for some reason we can haul finished cattle that far and make more money with them than hauling them 15 miles down the road to the sale barn.  We buy some protein and mineral from ADM, outside of that our cattle get home raised feed, I guess that is a big advantage of being in the row crop industry and the cattle industry.  We don't have to buy corn, although the corn price is getting a little harder to ignore especially when feeder calves are still bringing pretty good money, we just sold 80 hd. of fall calves at the sale barn and they did very good, I'm not sure if we could have made more money by feeding them out or not?  If anyone  has a crystal ball on here let me know! 
But the U.S. Premium deal has been a very good program for us through the years and they are making good money.  $35 per head for ASV, choice - select spread is between 3 and 4 dollars per hundred right now, which is better than .80 cents, prime is still worth it $20 something per hundred.  CAB seems to be a dirty word on here but it's just a brand name that gets a premium.  Choice is not what it used to be, there is too much choice beef out there to be much of a premium.  So if your breeding cattle for the grid, choice is not good enough anymore ( it should be the bottom of your program not the top), shoot for prime.  Is marbling or tenderness more important, you need both, as well as functional cows!  JMO

I think Nate has it right... the way to realize the value of genetics is likely maintaining ownership  thru slaughter but only if you have the numbers to be able to segregate your own feeding costs and the ability to feed at a reasonable cost... not a game for low numbers