Cost of Gain vs Value of Gain

1. Cost of Gain vs Value of Gain Darrell Rankins, Jr.

2. 2011 – New Rules Input costs – up, up, up volatility is high • Fuel • Everything is transported by truck • On farm usage as well

3. 2011 – New Rules • Prices received – also up, up, up • Quite volatile as well • We cannot change this so we must determine the value of the gain and manage the cost of gain

4. Value of Weight Gain • Wean 580-pound calves • Background for 45 days • Assumptions • ADG of 2.25 lb/day • 8:1 feed conversion • Now have 680-pound calves

5. Value of Weight Gain • 680-pound at $121.18/cwt • $824.02 • 580-pound at $130.94/cwt • $759.45 • $824.02 - $759.45 = $64.57/100 pounds • Value of gain = $64.57/cwt • Based on AL prices 4-22-2011

6. Cost of Weight Gain • Fixed Costs • Variable Costs • Vaccines • Deworming • Chute charge • $10-$15/head – 45, 60 or 75 days no different • Feed changes by day

7. Cost of Weight Gain • Max is $0.65/pound of gain • 10:1 conversion • 100 pounds of gain requires 1,000 pounds feed • Feed must be <$130/ton • 8:1 conversion • 100 pounds of gain requires 800 pounds of feed • Feed must be <$162.50/ton • 6:1 conversion • 100 pounds of gain requires 600 pounds of feed • Feed must be <$216.67/ton

8. Cost of Weight Gain • Rankins AAES projects • 6.2 to 9.7 on free-choice single feed + hay • 9.6 to 11.8 on diets containing low-cost roughage • 4-weight calves much more efficient than 8-weight calves • Ionophores improve feed conversion • Rumensin, Bovatec

10. Final Thoughts • Performance of calves is extremely important in determining cost of gain • ADG for 45 days is HIGHLY dependent on weighing conditions • Longer periods to higher weights need to be considered

11. Questions??