Feed Lot

APR-MAY 2017

Feedlots and cow/calf operations in the beef industry who feed 500 or more has annually on grains and concentrates; maintain 500 or more beef cows; backgrounder, stocker/grower, preconditioner; veterinarian, nutritionist, consultant

Issue link: http://feedlotmagazine.epubxp.com/i/810519

Contents of this Issue

Navigation

Page 14 of 31

CalfWEB provides a breakeven cal- c ulator and a closeout analyzer. CowBytes is an easy to use beef ra- tion balancing software package. Dhuyvetter says if the feeder can average $30 per head eight out of nine years, they can consider their business marginally positive. To help with long-term deci- sions, young producers need to ac- quaint themselves with the industry and various options. What markets are available? Is it better for a c ow/calf operation to feed their own or buy? Is it more important to buy calves with feeder calf ver- ification, or to be sure and get them from a known source? "Be imaginative and always keep an eye out for better options," says Dhuyvetter. "Then, with the numbers in front of you, you can make good decisions and realize profits." FL FEED•LOT  April/May 2017 15 producers are often able to raise s ome of the needed feed. The area has ample supply of corn, distiller's by-product, soy meal, and beet pulp. Still, ration is crucial, and the number one concern he hears from producers as an extension agent. He advises feeders not to wait for ideal purchasing circumstances. "If corn is $3 and you can afford that, buy now," he says. "Don't wait for $2.50, or $4." He stresses feed prices, like sell- ing price, "won't be the same a month from now. So, when you can lock something in, do it." The third major expense for any feedlot operation is yardage. "Utilities, labor, and long term expenses like repair and replacement of fix- tures and equipment can take its toll on the budget," says Dhuyvet- ter, who adds fuel and debt service to the list. "Most new producers just going in don't know the full cost of all these things," he says. Labor may be mostly family but is that enough? Can a fuel contract lock in prices? Is Livestock Risk Protection (LRP) worth the cost? "LRP might be worth it to secure your position with your banker," says Dhuyvetter. "Lenders in this part of the country are conserva- tive." Unlike areas where lenders look to cattle feeding as a way to preserve feed equity, northern bankers tend to rely on land and a young producer's family to provide the stability and equity for feedyard financing. "It can be challenging for the young producer," he adds. "It's important to have a good business plan that outlines how you intend to use the bank's money." Dhuyvetter makes the case that anyone can buy cattle, but feeding and selling them at a profit requires a long-term vision and exact calcu- lation, and possibly a large-scale approach to make any real money. "You need to know your cost of gain, value of gain, feed cost of gain, total cost of gain – and know the difference." Dhuyvetter and his team at North Dakota State have developed software that helps.

Articles in this issue

Links on this page

Archives of this issue

view archives of Feed Lot - APR-MAY 2017