Adding value to calves before selling this fall
August 22, 2008
I have recently gotten some questions about creep feeding this year. The first reaction is to say that with high feed costs, it’s an automatic conclusion that creep feeding won’t pay. However, further thought suggests it may not be that simple and straight forward. The signals have been quite clear that feeders want to buy heavier cattle, with the slide for lighter weight calves diminishing. This means that additional pounds on the calves at sale time have more value than they have had for a long time.
Pounds are worth more because there isn’t a penalty due to the slide. This may overcome the current cost of feeding a creep feed. It boils down to the cost of the added gain vs. the value of the added gain. Putting pencil to paper and using a partial budget to compare the benefit of creep feeding to not creep feeding becomes a valuable exercise to consider the economic value of providing the creep feed. In the partial budget, one will essentially calculate the value of the creep-fed calf vs. the non-creep-fed calf and determine whether that increased value exceeds the cost of the creep feed or not. Remember that the cost of delivering the creep feed needs to be included along with the cost of the feed itself. Even if it is farm/ranch based feedstuffs going into the creep feed, the feed still has to be valued equivalent to what it could be sold for as a cash crop when calculating the cost of creep feeding.
Some quick calculations provide the following example. Let’s assume a producer has grown some oats that could be sold for $8 per bushel. To meet protein requirements, a protein feed such as soybean meal will need to be purchased to mix with the oats. If the resulting creep feed is fed at three pounds per day for 75 days, it will cost at least $50 per calf. If feed efficiency is 10:1, this should increase ADG by about 0.3 pounds, resulting in about 25 pounds of added weight over 75 days. If this added weight increased the sale price of the calf by $30, then creep feeding doesn’t pay. However, opportunity exists to improve the probability that this will work. For example, look for cheaper feeds to lower the cost. Look for options to improve feed efficiency to increase the rate of gain. Consider a longer or shorter creep feeding period to fit the window when forage quality is low.
Alternatively, if calves are held after weaning, it may be more efficient to add the additional pounds after weaning. In locations where abundant rains have meant surplus range forage is available, it may be feasible to add growth to the calves based primarily on this forage. Supplementation of deficient nutrients, particularly protein, may be necessary to get the best value from this late-season grass.
Adding the additional weight after weaning may be more efficient than using creep feed. Negative effects due to substitution of the creep feed for gain from grass or milk could be reduced or eliminated. The situation will likely be easier to manage to ensure that the nutrient needs for the desired growth are directly met when managing weaned calves only vs. calves at the side of cows.
Again, a partial budgeting exercise will be invaluable in considering whether the value of the added growth will exceed the cost of providing the feeds to support it. In this case, improved feed efficiency or simplified management may change the cost/benefit so that the added gain is more profitable.
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If we consider using the feeds from the previous creep feeding example in this post-weaning scenario, and assume that feed efficiency improves to 4:1, then we might expect to add 55 pounds to the sale weight of the calf, and this might add $65 to their value. The cost of providing the feed would stay the same at $50.
Each producer that considers these scenarios should run these calculations to fit the costs, forage resources, and characteristics of their ranch and cattle. This example may or may not apply to any real-life situation, but it demonstrates how the potential can change depending on the situation.
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