Low milk prices and tighter margins have dairy producers and those exiting the dairy industry looking for alternative sources of income. Feeding dairy steers can be a viable and profitable option to supplement farm income.

Wuertz lisa
Lisa Wuertz

Dairy operations already possess several assets that make up a successful dairy steer feedlot: a source of bull calves, a supply of feed, cattle facilities, on-farm labor source and a working knowledge of cattle.

Shorty and Tom Crosby of River Valley Dairy LLC in Shell Lake, Wisconsin, have been raising steers since 1994. They milk about 100 cows and feed out their own calves as well as buying feeder cattle to build the numbers to fill a contract.

“We feel we have more control for risk management with the steers,” Tom says. They feed the Holsteins a high-grain diet and recently started buying beef steers and feeding them a traditional diet in order to better utilize an existing facility.

“Feeding steers is a marketing opportunity for some of our excess corn,” Tom says. “We feed the corn at 18 percent moisture from an air-dry system, and we benefit from having lower drying costs.” Shorty adds, “We like that the steers offer a diverse revenue source.”

Advertisement

Another dairy operation that has seen success raising steers is Highland Dairy of Kewaskum, Wisconsin, run by Mike and Corey Enright. They have been raising steers for 20 years and milk 300 cows with robotic milkers. They send the bulls to a calf raiser until about 350 pounds and finish them at the farm.

They use a whole corn/pellet program because it is easy. Mike states, “There is less manure to deal with, and the labor needed for the steers doesn’t interfere with the labor for our cropping and dairy cattle.” The Enrights said that when the dairy economy has been good, the steers have provided “fun money.” Corey says, “The steers have benefited us financially in the long run, and it’s important to stick with it.”

There are some key considerations to look at when deciding to feed out steers. By taking these factors into account, you will be able to develop a strategy and business plan that will work best for your operation.

  • Labor – Will you be able to provide all the necessary labor, or will you be hiring additional employees? If you will be hiring labor, you need to consider the availability in your area. Is labor easy to find in your locale?

    This may depend on the time of day you require the work to be done and how flexible you and/or your employees are. What type of labor is needed: working cattle, feeding, handling manure or caring for baby calves? Finding employees who can take initiative and are willing to learn can be a valuable asset to your operation.

  • Facilities – Assess the facilities currently available to you, whether you own or rent. Different types of facilities will have different labor requirements. Are the buildings open-front sheds or enclosed with end doors? Will additional ventilation (fans, curtains, etc.) need to be added?

    Is it a cement lot or a dirt lot? What is the cost to maintain the current facility versus the cost to build new? By evaluating your current facilities, you can determine whether to utilize what you have, build new or look for a facility to rent.

  • Manure handling – The average cost for manure handling in a bedded pack facility at 85 percent capacity is $3.65 per steer space on a conventional roughage ration. This figure includes pen scraping, manure removal and maintenance cost.

    A high-energy, low-roughage program produces 45 to 50 percent less manure, thus reducing the cost about $150 for every 100 steers per year. You will have to incorporate the additional manure into your farm’s current manure and soil management plan. Also, consider the type of bedding you have available and how it will work in your facility.

  • Feeding program and feed supply – The type of diet you plan to feed your cattle is a major consideration. If you are currently dairying, you will need to decide how to best allocate the feed sources you have on hand to maximize the nutrients available. The two main feeding options for dairy steers are: a traditional, forage-based TMR diet and a whole-shell corn, high-energy diet.

o A traditional, forage-based diet can utilize feedstuffs already present on your farm. Often, these diets are based on corn silage and balanced with a protein source, vitamins and minerals for each age and/or weight of cattle. Diets can be balanced and adjusted to utilize byproducts and lower-cost feedstuffs to lower feed costs.

o High-energy, low-roughage feeding programs are based on feeding whole-shelled corn with a pelleted protein and mineral supplement to provide all the required nutrients for growing and finishing steers.

These types of programs offer a complete birth-to-market feeding program where each stage of feeding (starter, grower, finisher) is designed to improve gains. The corn/pellet mixture can be supplied with self-feeders or bunk-fed.

o Both options offer opportunities for raising healthy and profitable market steers, but also differ in the amount and type of feed required, as well as labor requirements. One item to note is that steers and heifers may be raised together until they reach 350 pounds. After 350 pounds, a different diet is needed for optimum performance of each group. Feed a steer like a steer and a heifer like a heifer.

  • Marketing options – How you market dairy steers can have a significant impact on profit. There are several different avenues that can be utilized for marketing dairy steers. Local auction markets, private sale to individuals, forward cash contracting, hedging, and options are all ways for producers to market steers.

    Some research and running projections can help you determine which marketing option is most profitable for you.

Summary

Feeding dairy steers offers a relatively quick return on investment, depending on the feeding program and management. While there may be some initial capital investment, you can manage your costs and reduce your risk by focusing on the purchase price, overall feed costs and the selling price. Run projections at several different prices to evaluate what it does to your breakeven.

Check current market prices. Even if you are feeding out bull calves born on your farm, be sure to assign a value to the bull calf when figuring your costs. Having a reliable market for dairy steers, reasonable feed costs and the facilities and labor to accommodate the additional cattle will be key factors in deciding if this is a viable enterprise for your operation.  end mark

Lisa Wuertz is a marketing administrator at Form-A-Feed Inc. She, her husband and three children own a 55-cow dairy farm in central Minnesota and raise 75 to 80 steers. Don Cleaver is a nutrition and production specialist with Form-A-Feed.

Lisa Wuertz