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Cost of Gain vs Value of Gain
Darrell Rankins, Jr.
2011 – New Rules
Input costs – up, up, upvolatility is high
Fuel Everything is transported by truck On farm usage as well
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
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
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
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
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
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
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
Questions??
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