Considerations for Improving Profitability in the Beef Cattle Business: Reducing Feed Cost

by Gordon Jones, WKU Animal Science Professor (Retired)

Cattle market fluctuations during the last 3 to 4 years have been difficult to understand and explain. Even the most competent agricultural economists have difficulty explaining recent market trends. Until recent years, most economists used the concept of “supply and demand” to explain market trends. For example, in December, 2003 and during the first half of 2004 when the first cases of “mad cow disease” were identified in the US, many countries banned US beef products for several months. Consequently, the supply of beef quickly became greater than the demand resulting in a major decline in live cattle prices.

The purpose of this series of articles is not an attempt to explain the recent cattle market fluctuations, but to address concepts that producers could potentially use to improve profitability in both the short and long term. Every producer is acutely aware of the profitability equation:

Profit = Income or Revenue-Production costs

During the last 20 to 25 years, most seedstock suppliers as well as commercial producers have concentrated on the income or revenue side of the equation by selecting to increase growth rate, milk production, and to improve carcass traits. The first 2 articles of this series will address the cost or expense side of the equation. The third article will address sustaining high levels of revenue.

Feed costs represent a major portion of the cost of beef production. Most experts agree that roughly 70% of the total feed used in beef production is for body maintenance and only 30% for production. The following are areas that producers may consider as a means of saving on feed costs.

Cow Size – maintenance requirements increase at the 0.75 power of body weight which means that an 1100 pound cow should require 7.5% more feed for body maintenance than a 1000 pound cow. A cow weighting 1500 pounds should require 37.5% more feed for body maintenance than a 1000 pound cow. As selection for growth rate has steadily increased in the US, cow size has increased at approximately the same rate. Because there is NOT a direct correlation between growth rate and cow size, it is possible to have both excellent growth and moderate cow size. There are herds that have reported a steady increase in growth rate for 30 years while cow weights have remained the same. Selection strategies based on EPDs are available in various breeds to allow producers to continually improve or maintain growth potential while holding cow size in check.

Milk Production Potential – the conversion of milk to growth is NOT an efficient process. There is NO argument about the need for plenty of high quality colostrum for the newborn calf, but excessive milk production requires high levels of feed input. If extra feed input is not available, fertility of high milk producers will likely be compromised. Based on research data from the USDA Meat Animal Research Center, it is clear that heavy milk producers not only have greater nutrient requirements during lactation, but that extra nutrient requirement continues during the dry period. Producers need to focus on matching milk production potential with available feed resources. Recent research by Dr. Dave Lalman at Oklahoma State University shows that cows with high milk production potential may actually produce less milk than cows with lower milk production potential when feed resources are limited.

Net Result of Smaller Cows with Lower Milk Production Potential

Running more cows on the same acreage should decrease production costs per pound of calf sold. By having smaller cows with lower milk production potential, it is possible to run more total cows on a given acreage. Also, the reproductive efficiency of smaller cows with lower milk production potential is likely to be much better than for larger cows with more milk production potential, particularly during times of limited feed resources such as during a drought. Table 1 prepared by Dr. Bob Weaber shows the effect of weight and milk on cow counts with fixed resources. Data from this table show clearly the feed savings that are possible by having smaller cows with lower milk production.

Table 1: Effect of Weight and Milk on Cow Counts with Fixed Resources

Weaber, 2009

Heifer Development – The recommendation that heifers should reach 65% of mature weight at first breeding has been recently challenged by Dr. Rick Funston at the University of Nebraska. His research data shows that heifers developed to 55 to 60% of mature weight perform as well or better than heifers developed on a higher level of nutrient intake. Lifetime studies are being conducted to determine if there is also a difference in the years that heifers, developed on this lower plane of nutrition, will continue in production. Many theorize that heifers developed on the lower level of intake will last longer. It certainly stands to reason that heifers developed on a lower plane of nutrition should more likely maintain condition and rebreed when feed resources are limited.

Summary

Based on research findings, there appears to be tremendous potential to reduce the cost of production per pound of calf produced. By using smaller cows with lower milk production potential, it should be possible to increase the number of cows for a given acreage of land. Also, those smaller, less productive cows should logically be more efficient reproducers to result in a higher % calf crop each year. By developing heifers to lighter weights prior to breeding, there can be significant feed savings while producing cows that are likely to be more adaptable when feed resources are limited. Consequently, reducing feed requirements can contribute to more profitable beef cattle operations.